STATE LEGISLATIVE UPDATEJune, 2002 STATE LEGISLATIVE UPDATEThe end of June was the end of the fiscal year for most states. It could not come any sooner for the great majority of states that have been battling severe budget deficits. Illinois, for example, ended the month, and the fiscal year, with 9 cents in the general revenue fund. Tennessee furloughed all non-essential government employees when the legislature couldn't come to an agreement on the budget. California had not passed a budget by June 30th and is facing a $23.4 billion deficit. As of the end of the month, the following state legislatures were in regular session or in recess: CA, MA, MI, NC, NJ, NY, OH, PA, and TN. During June sessions adjourned in DE, IL, LA, RI, SC, and VT. Through June there have been 91,523 new bills introduced in the states (this does not include carry-over bills from last year) and 21,960 have become law. Some of the bills the Department of Health Policy is tracking are outlined below. If you have any questions please give Jay Fisher a call at 800-346-2267, x4336. PATIENT PROTECTIONS The biggest news concerning patient protection legislation in the states in June came from the United States Supreme Court. In Rush Prudential HMO, Inc. v. Moran et al the Court, by a narrow 5-4 vote, held that the forty-two state external review laws are not preempted by the Employee Retirement Income Security Act (ERISA). The insurance industry had argued that state laws allowing patients to obtain independent external reviews of treatment denials violated federal law. Under ERISA all state laws that "relate to" an employer sponsored plan are unenforceable. The Court held that external review laws "regulate insurance" and therefore fall under an exception in ERISA and can be enforced. Unfortunately, the ruling doesn't apply to the 47% of employees that are covered under "self-insured" plans. Under ERISA "self-insured" plans do not have to comply with state insurance laws. The Moran decision may decrease the incentive for the U.S. Congress to reach agreement on a federal patients' bill of rights that has been in negotiation for some time. What this decision will mean in the long term for the applicability of state right to sue laws, any willing provider laws or prompt payment laws to ERISA plans is still unclear, but the outlook is certainly brighter than if the case had been decided in favor of Rush Prudential HMO, Inc. PATIENT SAFETY A physician profiling bill passed the Senate in New Jersey. The bill was amended so that the dollar amount of liability judgments and settlements is not included in the profile, only the number of settlements and judgments and whether that number is below average, average or above average for the specialty. JOINT NEGOTIATION In June Governor Knowles of Alaska signed the joint negotiation bill into law. The bill was opposed by two different Departments in the state government as well as by the Federal Trade Commission. The law does not allow for joint negotiations over reimbursement terms. TORT REFORM Physicians in New Jersey held a rally at the Capitol in Trenton to raise awareness of the professional liability insurance crisis in the state. More than twenty-five tort reform bills have been introduced in the last few months in New Jersey. Physicians in Cleveland rallied for tort reform on June 10th. A broad-based tort reform bill was introduced in Ohio on June 18th. The bill:
Legislation in Pennsylvania was signed in June amending the joint and several liability law. The amended law provides that defendants who are less than 60% at fault only have to pay for the damages caused by their negligence. Joint and several liability still applies if one is liable for an intentional tort, intentional misrepresentation, and for injuries caused by drunk driving or by release of hazardous materials. The bill to cap non-economic damages in Delaware failed to pass before adjournment. SCOPE OF PRACTICE The bill in Hawaii that would have expanded the scope of chiropractic beyond the human spine, allow chiropractors to call themselves chiropractic physicians and send specimens for lab tests (see April 2002 Update for more on this bill) was vetoed by the Governor. Bills were introduced in New Jersey to eliminate the physician referral requirement for physical therapy patients. The bills provide no limits on the physical therapist's ability to treat without a referral, such as a time limit or years in practice. The direct access bill in New York passed out of the Assembly and heads to the Senate. The bill limits direct access to physical therapists with three years of practice, it requires PTs to advise every patient that their insurer may not reimburse for treatment without a referral, the PT must provide the patient's physician written notice at the commencement of unreferred treatment, and must consult with the patient's physician about the patient's condition and the recommended course of treatment. If there is a dispute about the proper course of treatment then the diagnosis of the physician prevails. A bill to allow podiatrists to be certified as acupuncturists passed the Senate in New York and now goes to the Assembly.
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