By ANDY MARSO

Gov. Sam Brownback signed a bill Monday that will allow insurance companies to avoid paying a privilege fee when they sell health plans that cover only in-network care.

The state already allowed insurers to sell network-only plans if they registered with the Kansas Insurance Department as health maintenance organizations, or HMOs, and paid the fee.

Legislators raised the fee substantially last year to help balance the state budget. Their intent was to collect more money from the three managed care organizations that administer Kansas Medicaid, or KanCare, that also pay the fee.

That would in turn draw down more federal Medicaid dollars, which would be used to reimburse the KanCare companies.

But insurers also had to pay the fee on private-sector plans — and they received no reimbursement. Aetna was hit particularly hard by the fee increase and lobbied this year for House Bill 2454, along with Blue Cross and Blue Shield of Kansas City and United HealthGroup.

The bill allows insurers to sell “exclusive provider organization,” or EPO, plans. Generally, HMOs differ from EPOs in that EPOs do not require a referral from a specific primary care physician for other care as long as that care occurs in network.

But HB 2454 allows insurance companies to include referral, or “gatekeeper,” requirements in their EPO plans, which would make them functionally no different than an HMO plan — although the insurance company would not have to pay the privilege fee.

Representatives of Aetna and Blue Cross and Blue Shield of Kansas City said the bill will allow them to sell cheaper insurance plans. During a committee hearings, legislators and a representative from the Kansas Insurance Department raised concerns about ensuring consumers know when they consider purchasing the plans that the doctors they currently see may not be in the plans’ networks.

Rep. Willie Dove, a Republican from Bonner Springs who sells insurance, said that after talking with the insurers, he’s satisfied that their company policies as well as the insurance department regulations will ensure that’s the case. “They do have the capacity to find out if the doctor is in network or not,” Dove said.

The state’s budget director did not provide an estimate of how much revenue might be lost due to the bill but did provide a fiscal note stating that the HMO privilege fee is estimated to bring in about $106 million in the current fiscal year and $111 million in the next. The majority of that comes from the KanCare companies.

Andy Marso is a reporter for KHI News Service in Topeka, a partner in the Heartland Health Monitor team. You can reach him on Twitter @andymarso