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March 23, 2009
The Ohio Healthcare Simplification Act: Impact on Contracting Process
Thomas D. Anthony

The Ohio Healthcare Simplification Act (HB 125) was signed into Ohio law on March 25, 2008 as ORC Section 3963 and was enacted to achieve two main goals: (1) to improve the contracting process between healthcare providers and insurers and (2) to standardize the credentialing process that insurers require of healthcare providers.

The Act requires insurers to give healthcare providers a copy of a full fee schedule that includes information about the manner of payment and procedure codes.

The Act requires insurers to provide in plain language:
  1. important terms including compensation terms;
  2. categories of coverage;
  3. the duration of the contract;
  4. the entity responsible for processing claims; and
  5. the method of dispute resolution.

The Act requires insurance companies to notify healthcare providers 90 days in advance of material amendments, including changes that:
  1. decrease payment;
  2. increase administrative expenses; or
  3. adds a new product.

Written notice must also be provided 15 days in advance for non‑material amendments. However, the advance notice requirement for material and non-material amendments does not apply to changes in payment or compensation that result solely from changes made to the Medicaid or Medicare physician fee schedules or to routine changes or updates to healthcare contracts made in response to changes made to service, procedure, or reporting codes or to price changes made by a third party source.

The Act restricts the selling or renting of a healthcare provider’s contract to another company except to the following third parties under specified circumstances:
  1. healthcare providing employers who have contracts with the insurers;
  2. affiliates or subsidiaries of insurers; or
  3. parties, such as third-party administrators or preferred provider networks that provide electronic claims transport when the contract specifically provides that it applies to network rental arrangements.
If you have any questions about the implication of this recent legislation, please contact Tom Anthony (513-651-6191) or , Marisa Schroder (513-651-6804) or or any other attorney in our Corporate/Business Practice Group.