Enactment of legislation intended to improve patient access to quality health care could jack up employers' health insurance premiums, according to a new analysis of the proposal.

An analysis of the Patient Access to Responsible Care Act, H.R. 1415, found that premiums could increase 7% to 39%, according to actuarial consultants Milliman & Robertson Inc.

The wide range is due in part to differing assumed interpretations of some loosely worded provisions in the bill.

"The legislation is extremely ambiguous. Sometimes, we would have three people read a provision and we would have three different interpretations," said Mark Litow, a consulting actuary in Milliman & Robertson's Milwaukee office.

In addition, the impact of some of the provisions would vary by plan design, according to the analysis, which the firm conducted for a major national retailer that opposes the PARCA legislation. Almost half of the members of the House of Representatives back the bill. PARCA, or H.R. 1415, which was introduced earlier this year by Rep. Charlie Norwood, R-Ga., has been the subject of several congressional panel hearings this year.

Business groups have begun to strongly lobby against the bill, which they worry could in some version be enacted next year as a congressional response to what members see as a growing public backlash to managed care practices.

However, a vote on the bill, which several congressional panels would have jurisdiction over, has not been set yet. No formal action has been taken on a similar bill introduced in the Senate by Sen. Alfonse D'Amato, R-N.Y.

Because of time and budget constraints, the analysis did not examine all provisions that could affect employers' health care-related expenses, including one that would allow patients to sue employers for malpractice if network providers injured them.

Still, even though the analysis did not analyze all provisions, the costs of provisions it did identify are "devastating," says Michael Cannon, a health care policy analyst at Citizens for a Sound Economy, a Washington-based group that describes itself as a free market consumer organization.

"We are glad to see that someone has put a cost that PARCA will impose on consumers," Mr. Cannon added.

One of the most potentially costly provisions in the legislation -- depending upon its interpretation -- involves reimbursement rates for services in and outside a managed care network.

The legislation says reimbursement rates for services of providers not in a network cannot be less than the rates paid for services from network providers.

If the provision means health care plans cannot pay out-of-network providers less than network providers for the same services, there would be little, if any, impact on health plan costs of such a requirement, according to M&R.

On the other hand, the impact on plan costs would be significant if the provision is interpreted to mean health care plans must set the same deductibles and copayment levels on enrollees for services received in or out of a network. Under that interpretation, employers' costs would increase by an average of 11%, according to Milliman & Robertson.

Another PARCA provision whose costs vary widely depending on interpretation says: "No specific payment is made directly or indirectly under the plan to a professional or provider or group of professionals or providers as an inducement to reduce or limit medically necessary services."

This provision, according to the Milliman & Robertson analysis, could be interpreted to disallow risk-sharing arrangements with providers or capitated reimbursement for medical services. Under that interpretation, Milliman & Robertson estimates costs would rise an average of 2% if the bill became law.

However, that provision -- if read in conjunction with other PARCA provisions that interfere with the ability of health plans to limit the number of providers in their networks -- also could be interpreted as "resulting in the elimination of provider discounts in the marketplace, as well as not allowing capitation or risk-sharing agreements," the consultant's analysis says.

Under the latter interpretation, Milliman & Robertson estimates employer premiums could rise an average of 17%.

The cost impact of a PARCA non-discrimination provision also would vary considerably based on plan design. That provision says: "A health insurance issuer shall not discriminate in participation, reimbursement or indemnification against a health professional" acting within the scope of his or her "license or certification under applicable state law" based on state licensing or certification.

The provision, according to the analysis, could be interpreted to mean health plans would have to cover services of many health care professionals, such as chiropractors and acupuncturists, that some plans now exclude. In addition, the provision also might mean benefit levels for employees cannot differ, regardless of whether an employee receives a service from a dentist or a physician.

For plans with rich benefit levels, the average cost increase resulting from the non-discrimination provision would be only about 1%, but the cost increase could be at least 10% for plans that limit benefits based on type of provider, according to the analysis.

Other provisions in the PARCA measure, though, only would have a slight -- less than 1% increase -- on costs. Those provisions include those mandating a point-of-service option and barring prior authorization for emergency room treatment if a patient had symptoms that would "reasonably suggest" to a prudent lay person an emergency room condition.

For additional information about "Actuarial Analysis of the Patient Access to Responsible Care Act," contact Marjorie Taylor at Milliman & Robertson, 8000 Towers Crescent Drive, Suite 1000, Vienna, Va. 22182; 703-917-0143.