Latest / Real State / An Inside Look at Tennessee’s Patient First Act, with Rep. Dan Howell

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An Inside Look at Tennessee’s Patient First Act, with Rep. Dan Howell · Real State

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  Family health insurance premiums have risen 342% since 1999.
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  You contrast that with the rate of inflation, which has risen 64% in that same 27-year span.
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  That's a differential of 278%. So I begin to ask myself the question, where is that money going?
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  This is Real State, a podcast from CSG South. Join us as we talk with policymakers and public
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  leaders shaping state-level decisions across the South and explore how ideas move from policy to
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  real impact.
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  Hello and welcome to Real State. I'm your host, Lindsey Gray. Across the country, states are taking
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  a closer look at how health insurance policies affect patients, providers, and access to care,
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  particularly as technology, administrative processes, and health care delivery continue to evolve.
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  In Tennessee, that conversation has included a comprehensive proposal this legislative session
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  known as the Patient First Act that addresses everything from claims, processing, and provider
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  reimbursement to the role of artificial intelligence and patient data protections. Our guest today,
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  Representative Dan Howell, has served in the Tennessee House since 2013, and for the last several
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  years he served on the CSG South Executive Committee, all while actively engaging on a wide range of
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  policies. Representative Howell, thank you for being with us today.
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  It is a pleasure to be with you, Lindsey. Thanks for asking. Thanks so much. So before we get into the
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  details of the legislation, I want to start with what led you to take this issue on since many
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  pieces of legislation are often shaped by real life experiences. Yeah, you've shared with me that
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  this effort was tied to a personal experience with the health care system. Can you tell us about that
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  and how it influenced your decision to pursue this legislation? It is amazing how things that
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  happen to us in real time have a ripple effect that later in life becomes legislation. It's happened
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  in a couple of times, not to be personally, but things that happen to some of my constituents that
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  turned into legislation. But in this case, it happened to me about two years ago, my wife asked me
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  to plant a crate mercury in my front yard. Of course, I loved my wife and I was glad to do it. So
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  it's about an hour digging and shoveling. And after I put the tools away about an hour later,
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  I noticed that I had some severe sharp pain in my right knee. And it wouldn't go away. It kept
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  getting worse. And I noticed by the time I was late evening, I couldn't hardly walk. So the very
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  next morning, I called my doctor, explained the situation to him and he said, "Well, come in right
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  away. I want to take a look at it." So he said, "I think you've torn a meniscus in your right knee."
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  So he did an x-ray, not one but two meniscuses were torn in my right knee, one on each side of the knee.
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  And he said, "Well, I think just to confirm, we better do an MRI." So the MRI, the x-ray and the doctor,
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  who has 25 years of experience as a sports doctor, sports medicine, or the BDX surgeon,
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  they all three said, "Yes, you have two torn meniscus in your right knee and you need surgery."
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  So as the case is today in medicine, you have to get approval from your insurance company
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  to get surgery. So he said, "It should be just routine." Well, this one wasn't. My insurance
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  company denied it, not once, but twice. And so that really affected my quality of life for about
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  six weeks until the vice president of Blue Cross and I had some very candid conversations.
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  Finally, I was able to get the surgery, but not before Blue Cross suggested that rather than
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  surgery, they suggested I have nine weeks of physical therapy. I'm not a doctor, but I knew that
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  wouldn't work because my kneecap, because of the tear, my kneecap was twisted and tilted.
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  And physical therapy would have made it worse, but thankfully I was able to get the surgery done
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  and today both the tree and my knee are doing fine. Good, I'm glad that both have grown back together
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  and everything is going well. When you step back from that experience, what did it reveal to you
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  about how the system is working or not working for patients and providers? Not everybody gets to
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  call the VP and get this involved or knows how to advocate for themselves. Yeah, well, I had never
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  had an experience like that. I've been blessed all my life with good health and I think the only time
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  I've been in the hospital several years ago, I had an emergency, I have a neck to me,
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  an emergency, you don't have to get permission to have your appendix taken out when it's in flight.
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  So this was a new experience for me, but it really revealed to me why so many of my constituents and
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  so many of the people in Tennessee and things that I hear in nationwide complaining about their
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  insurance companies. In fact, some recent polling in Tennessee during the process of running this
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  bill, there was some polling done and it showed that while 81% of voters trust their doctors to make
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  the decisions for their health care, unfortunately 67% of voters have an unfavorable opinion
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  of their health insurance companies, 53% of Tennessee's blame insurance companies for the
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  exorbitant health care costs and rising premiums. And well, I mentioned premiums, let me touch on that
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  for just a minute, Lindsey, since 1999 and I found out all of this while doing the research of the
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  last two years for my bill, family health insurance premiums have risen 342% since 1999.
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  You contrast that with the rate of inflation, which has risen 64% in that same 27 year span,
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  that's a differential of 278%. So I began to ask myself the question, where is that money going?
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  And so when I took a deep dive into the situation of where we are now, that's where the patient's first
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  act actually came from. So it looks like you used a series of data, your perspective,
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  and it clearly informed the structure of the patient first act. So at a high level, what problem
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  is the patient first act trying to solve? Well, in simple terms, I want to put medical decisions
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  back into the hands of the patients and their doctors. It's not there now. Health insurance only works
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  when the promise is made in the policy, which is actually a contract, are honored in the practice.
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  So in reality, health insurance companies have turned their claims division since 1999 into a
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  profit center, and there's data for that as well, research for that as well, which I don't have time to
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  go into here, but it's real. And when they use a process called delay, deny, and defend, and when
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  the insurer denies a claim, and only 1% of the policyholders really understand that they can
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  appeal a denial, then it's a huge profit for the insurance companies. Well, the bill that you put
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  forward is fairly comprehensive. It establishes state level review commission, set standards for
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  insurance practices, and creates new protections. So can you walk us through a few of the key components
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  you believe are most important in this bill? Absolutely. I learned through the process that some of
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  these health insurance companies are making unbelievable profits. I believe that's one reason we need
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  a commission of insurance review, and it was actually Speaker Sexton, Speaker of the House in
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  Tennessee, was actually his idea to include that in the bill. And like most states, Tennessee has a
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  cabinet level appointment of Commissioner of Commerce and Insurance, which by the way, didn't like my bill,
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  but that's okay. That's another story. But also like most states, the main focus of that department is
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  to make sure that all insurance companies have the necessary reserves to pay the claims that are filed.
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  But when it comes to regulation and following up on complaints and investigating fraud,
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  that type of thing, they do very little if any enforcement or complaint investigation.
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  I can give you some examples. A hospital near my district is owed $64 million by a major health
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  insurance company. Another hospital in East Tennessee is owed $65 million by that same health
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  insurance company. And the only way to collect those funds is to sue. Unfortunately, the insurance
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  companies have all the money, most of it, and they have a bankable lawyers, and it's very expensive for
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  a hospital or a medical provider to fight back because of the extreme costs. So to me, it's no mystery why
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  so many hospitals and health care providers across the state, across the country are struggling to
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  survive, especially in the rural areas. And that's where the focus is today is providing quality
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  health insurance in rural areas of our state as well as across the country.
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  The health insurance company is unporesfully controlled by care. They control the provider pricing,
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  the pharmaceutical pricing, they have their own PBMs, and they often refuse to pay what is owed
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  to the provider. And so that's why I believe that a review commission is necessary in Tennessee.
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  Well, thank you for explaining the role of what the review commission would be charged with.
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  One notable provision addresses downcoding where claims are adjusted to lower cost procedures.
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  Why was that an issue you felt needed to be addressed?
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  Well, downcoding is a huge issue. It simply means that an insurance company refuses to
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  pay what is on the client. That's basically what it means. The service provider provided by the doctor
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  or the hospital is downcoded to a lesser scale, lesser pay scale, and the insurance company says
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  basically take it a leave. That's wrong. And we need to fix it. For example, I have lots of examples
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  going to have time for them all, but hospital in Tennessee was told by a patient's insurance company
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  to keep that patient for two extra days because of some complications in the patient's health.
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  And so the hospital did that. But when it was time for the insurance company to settle the claim,
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  they refused to pay for the extra two days. They just said, no, we're not going to pay for those extra
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  two days. They downcoded them to a lesser pay scale, and the hospital actually had to eat those costs.
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  And this is why we're seeing more and more lawsuits against insurance companies and more and
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  more investigations against insurance companies. And downcoding is extremely difficult for the
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  hospitals and providers because it makes it hard for them to survive. They have to pay their staff.
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  They have to pay for the medication, their time. And currently the health insurance companies
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  hold all the leverage because they set the prices in. We're trying to change that in Tennessee.
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  You were the first one to educate me on downcoding. So I definitely wanted to ask you that question.
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  And since then, I've kind of seen and researched a little more states that have done some policies
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  recently on downcoding, which I'll reference a little bit later. But it's a fascinating strategy.
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  And so the bill also addresses how modern tools and systems are being used in healthcare.
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  The legislation includes a provision around the use of artificial intelligence and claims review,
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  requiring human oversight before the final decisions are made. Why was it important to include
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  guardrails around AI in this context? I was stunned, Lindsay, in my research while preparing
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  this bill to discover that health insurance companies use an artificial intelligence algorithm
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  to approve or deny, mostly deny claims when a patient or a doctor falls a claim.
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  Now, I'm not against artificial intelligence. In fact, I use it in my office on certain things,
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  but I never use AI unless I review it afterward. AI is not foolproof.
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  But they're using this AI algorithm to deny claims and the insurance companies don't deny it. One
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  exec recently, well, a few weeks ago before Congress testified that we love AI. We can deny a claim
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  in four seconds. That's just stunning to me that they would admit that. And some researchers estimate
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  as much as 81% of first time claims, like my knee, are denied 81%. The first time claims are
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  denied. AI is nothing more than a tool. So my bill just simply says you can use AI to flag certain
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  things when it comes through. You can maybe flag what you might think is some prod, or you can approve
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  a claim that you might think be a good claim, but you cannot use AI without putting some medical
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  eyeballs on it. You have to have a medical professional review of the AI when you use it. And they
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  have to have that medical professional to look at it before a final decision is made.
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  We cannot forget our critical thinking skills as AI evolved. Exactly.
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  Again, a comprehensive bill. So there are also provisions related to patient data,
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  particularly limiting the transfer of medical information outside of the United States.
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  Yes. So how does that fit into the broader conversation about trust and transparency in healthcare?
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  This was another stunning example of information that came across my desk as I was researching all of
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  this. It's just amazing to me that our health insurance companies, who we really up until recently
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  have trusted with having the best interest at heart for the patients, are sending up to 61%
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  of claims according to some researchers to be reviewed by AI outside of the United States.
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  I just find that incomprehensible. I see all kinds of issues with that. HIPPO laws,
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  violations, reviewers unable to properly read and understand English.
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  The bill simply says, let's keep the reviews inside the United States. I'd like to keep them inside
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  Tennessee, but I was told by legal that you may not be possible. Maybe a step too far.
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  Maybe so. So another theme in the bill is the relationship between insurers and providers.
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  The bill includes provisions requiring notice and negotiation before changes are made to
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  provider contracts or reimbursement structures, which I think we touched on just a little bit.
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  What challenges were you hearing from providers that led to this approach?
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  Oh, the stories I can tell. But the complaints I hear most are denials. People who have had
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  been taking a certain type of medicine for years are suddenly sent notice that we're not going to
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  pay for that medication anymore. Denials. They have to appeal. So many people do not know that they can
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  appeal. Insurance companies practicing medicine without a license. You say, oh, that's a that's a
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  reach. No, it's I've heard this from medical provider after medical provider who tell me my
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  insurance company is telling me what to do in my practice. They even prescribe what medicine I
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  should give to my patients. That is practicing medicine with a license. Another example I read
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  recently about a doctor, a pulmonologist who had a young patient. He prescribed an inhaler. He had
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  some kind of respiratory problem to a little 11 year old boy. And the doctor prescribed a specific
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  inhaler because of his age, his condition and the type of issue that he had. The insurance company
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  came back and said, no, you can't use that. We won't pay for that. We want you to use this inhaler.
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  Now, why do we need doctors if we just call the insurance company and say, I'm got a cold,
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  would you prescribe? That to me is prescribing medicine, practicing medicine without a license.
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  And we need to stop that. And there are also provisions addressing issues like
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  lasering and ownership structures between insurers and providers. And you might have to explain
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  kind of what that is. But from your perspective, why is it important to look at these structural
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  dynamics in the healthcare system? Sure. We need to do it to avoid monopolies. Monopolies drive
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  up costs and they drive out competition. We recently had a bill here in Tennessee in the legislature
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  concerning CVS, pharmaceuticals. It had to do with PBMs. CVS owns insurance. They own the health
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  clinics. They own the PBMs, which set the drug prices for their competition. That's just unbelievable
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  that we have gotten to the point that we allow that to happen. I'm old enough to remember
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  years ago when we broke up AT&T because it was a monopoly, but we seem to be fine with the health
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  cares companies being monopolies and owning all of these things. But CVS alone is credited by some
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  of forcing at least 600 independent pharmacies out of tennis out of business in my state, Tennessee.
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  So it's a great concern and we need to put stop to it.
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  While this bill did not advance out of the committee this session, I believe it died in the Senate,
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  the conversation around these issues continue. So what feedback did you receive during this legislative
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  process this year to maybe revise this or just further education? Just what are you hearing? And
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  what's that that the next steps kind of look like? Well, it wasn't bipartisan bill.
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  I had 45 co-sponsors from both parties, from both sides of the aisle in the House.
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  And the reason is because we all recognize the system is broken. It favors the insurance companies
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  and the stockholders and not the patients, not the doctors. And I don't believe a fix will come
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  from the federal government. I believe the break about change is going to take a grassroots effort
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  from states like Tennessee and hopefully others will join in a coalition to rise up and do what's
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  best for our patients, for our constituents and for the citizens of this country. But in the House
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  side of the General Assembly in Tennessee, my entire bill moved forward because he'd had a lot
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  of support with the exception of what's called the equity reimbursement. That means equal pay for
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  equal medical service, which is just common sense. Another example if I could share one with you
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  real quick, I happen to be able to glance at the reimbursement schedule for one of the larger insurance
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  companies. That schedule a lot of payment of $1,000 for an emergency visit to one of the hospitals near
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  close by my district. That same payment schedule allowed $3,000, three times as much for another hospital,
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  a large hospital owned by a huge nationwide company, 40 miles away in a larger city. So $1,000 versus
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  $3,000 for the same service. That's why our rural hospitals and medical providers in the state of Tennessee
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  and nationwide are suffering because they're not getting equal pay for equal service and we need to
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  change that. As you said, unfortunately, the bill was defeated, but just one vote. Yeah.
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  Defeated by one vote about the time that it came out of finance subcommittee on the House side,
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  that same day was defeated by one vote in the Senate Commerce Committee, but I'm not discouraged.
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  We have momentum. The bill is being rewritten and it will be refiled come January at the next session,
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  and I'm looking forward to running it again and moving this issue forward.
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  Is it okay if you don't want to share this, but looking ahead, what aspects of the bill do you think
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  have the strongest potential to move forward? Are you going to make any tweaks or revisions based on
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  feedback you got from this year? Yes, I think the Commission on Health Insurance Review,
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  very popular in the legislature, not from some in the executive branch, is very popular. That
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  will also coincide with the AI algorithm at making sure we have medical professionals looking at
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  the actual records. The part about 60-day notice, another example of that, I had a hospital near me,
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  which impacted about 8,000 of my constituents. They were notified overnight that they were no longer
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  in the network with United Health Care for Medicaid advantage. Well, that was a tremendous issue
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  for about 8,000 of my constituents. Thankfully, we got that word out when my bill says that you have
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  to give at least 60 days notice before you put such a burden on the policyholders in Tennessee.
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  These health insurance questions and issues are not unique to Tennessee. Across the country,
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  states are examining similar issues. We're seeing a number of states take action on various pieces of
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  this legislation. We've been hearing about PBM reform for a couple of years. Whether it's
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  downcoding in Indiana, New York, or transparency bills, particularly around downcoding in Arkansas
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  and Virginia, or AI oversight in states like Texas and Maryland. But Tennessee's proposal brings
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  those issues together in one comprehensive framework. I think that's what makes this a little
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  bit different and why I wanted to talk to you about it on this platform. So for other states,
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  considering similar reforms, what lessons from Tennessee's experience would you highlight?
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  Good question. I would say be prepared for an onslaught of opposition from the health insurance
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  industry. I'm told I didn't bother to look into it, but I was told that there were 10 high-powered
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  lobbying firms hired to defeat the Himaya Bill. But you can't be discouraged. You know, opposition is
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  a fact of life. If you're doing anything right, you're going to have opposition. If you're doing
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  anything good, you're going to have opposition. And the reason you shouldn't be discouraged is
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  the issue resonates with the people, not just of Tennessee, but across the nation. People are
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  concerned about good quality health care that they can depend upon. And something that
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  affects the patient and helps the patient and the doctor relationship rather than the shareholders
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  of these four-profit insurance companies. This is an issue that resonates with constituents.
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  And it's the right thing to do. And I believe you'll be surprised if someone decides to run a
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  similar bill. They'll be surprised by the support they receive from their constituents, as well as
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  the medical provider community. We had hospitals, TMA, the medical association, hospital association,
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  doctors who came to our press conference and asked to speak on the bill. We had a crowd. And the
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  the issue is important. It has a lot of grassroots support. And I believe that we'll take another
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  run at it. We might have it if we're out. Well, I know this is a layered topic, particularly with
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  the bill, that comprehensive and having both sides of this issue voices come forward. I'm sure
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  is a very tricky place to be. I am not in the use of your role as a legislator in this one.
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  But I have no doubt you'll take another run at it and see what can come forward in Tennessee.
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  So before we close, I'd like to end with a question we ask all of our guests. So what is the best
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  piece of professional advice you've ever received? And how does it shape the way your approach or work
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  today? I have been blessed along the way with some wonderful mentors in my life, more than one,
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  several. And each one has contributed in some way to any success that I may have enjoyed.
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  But especially as a freshman legislator some years ago, it was impressed upon me that being a
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  legislator is all about relationships and in reality, that's true in life. I'm just one vote
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  out of 99 in the house. And to get anything done, I get amused when it comes election season and
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  I see people campaigning. And when I get to the Capitol, I'm going to, when I get to the legislature,
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  and I have to smile because you're not going to do anything without some help from the team of
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  legislatures, legislators that you work with. You have to build relationships, you have to build trust.
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  You have to have credibility. You have to keep your word. And if you don't do that, credibility
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  and trust is something that's extremely hard to regain once you've lost it. So I've tried to
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  follow that advice. And so far, it seems to have served me pretty well in the House of Representatives.
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  And I hope to continue to do that. It's been fun to watch you with those relationships and
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  particularly on our executive committees. So thank you for putting that forward as your
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  piece of advice to our audience. So representative, how thank you for joining us and for sharing your
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  perspective on an issue that impacts patients, providers and health care systems across Tennessee,
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  and the South and the country, really. So we appreciate your time and appreciate you educating
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  anybody that decides to listen. Good to be with you, Lindsey. Thank you so much.
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  Thank you. And to our listeners, thank you for tuning in to real estate. For more conversations
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  like this, visit CHGSouth.org. I'm Lindsey Gray. Let's keep it real.
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