STATE LEGISLATIVE UPDATE

MAY 2002 STATE LEGISLATIVE UPDATE

May provided little relief for state legislators seeking relief from the revenue shortfalls that are striking the states. States are still hoping for help from on high, i.e. the United States Congress. U.S. Senator Susan Collins (R-ME) and U.S. Sen. Ben Nelson (D-NE) have introduced legislation championed by the National Governors Association that would provide $8.9 billion to help states with Medicaid and other spending. The aggregate budget deficit in the states has reached $40 billion.

As of the end of the month, the following state legislatures were in regular session or in recess: CA, DE, IL, LA, MA, MI, NC, NJ, NY, OH, PA, RI, SC, TN and VT. During May sessions adjourned in AK, AZ, CO, CT, HI, KS, MN, MO, NH, OK and WI. Through May there have been 84,421 new bills introduced in the states (this does not include carry-over bills from last year) and 19,609 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/ INSURER LIABILITY

A bill passed the Assembly in New York in May protecting providers from being dismissed from a plan for advocating for a patient or for providing care obligated under the contract. The bill also includes a ban on financial incentives to physicians to limit or deny care.

Lastly, the bill contains provisions creating liability for any health care organization that "delays, fails or refuses to approve, provide, arrange for, or pay for, in a timely manner, any health care service to a person to the extent it is contractually or legally obligated to do so."

A bill passed both houses in Illinois requiring insurers to print a disclosure, if appropriate, warning insureds that reduced benefits will apply if they use non-participating providers. A bill was introduced in New Jersey to allow standing referrals to specialists.

PATIENT SAFETY

Legislation was signed by the Governor in Connecticut requiring hospitals and surgical centers to report to the state verbally within 24 hours certain "adverse events." A written report must be filed within 72 hours and a corrective action plan within one week.

The bill to reform the Board of Medical Practice in Vermont passed the Senate in May and now goes to Presidential aspirant, physician and Governor, Howard Dean. The bill contains a physician profile that would be available to the public. The profile will contain disciplinary actions, suspensions of hospital privileges and malpractice settlements and judgments.

JOINT NEGOTIATION

In May a joint negotiation bill passed both houses in Alaska. If the Governor signs the bill Alaska will become the fourth state to allow physicians the power to jointly bargain with health plans, joining Washington, Texas and New Jersey. The bill does not allow bargaining over fees.

TORT REFORM

A bill was introduced in Delaware to limit non-economic damages in medical liability lawsuits to $250,000. A bill was introduced in Michigan to expand the $280,000 cap on non-economic damages in medical liability cases to include personal injury and wrongful death cases.

A package of tort reform bills was introduced in May in New Jersey. The bills would:

• Limit a physician's liability to the amount of insurance he or she is required to carry;
• Eliminate tolling of the statute of limitations in medical liability cases so almost all cases must be brought within four years of date of treatment; and
• Cap non-economic damages at $500,000.

A bill to allow tolling of the statute of limitations in medical liability actions until the plaintiff knew or should have known of the injury was introduced in New York.

REIMBURSEMENT

A bill passed the Assembly in California that "would prohibit a contract between a health care service plan and a physician from (1) allowing the plan to unilaterally change the terms of the contract or rate of payment for services, (2) requiring a physician to accept additional patients if, in the judgment of the physician, doing so would endanger patient care, and (3) failing to fully disclose the rate of payment for services." The bill now moves to the Senate.

PROMPT PAYMENT

A bill passed the Assembly in California to limit when plans can contest claims. The bill would limit health plans and HMOs to contesting claims within the timeframe they have to pay the claim, 30 days for health plans and 45 days for HMOs. Payers would also be forbidden from deducting interest they have to pay for late claims from future claims.

Governor Owens in Colorado signed into law a bill that limits the time frame that payers can retroactively deny claims. Adjustments to claims must be made within the time period specified in the provider contract, provided that the time period is not longer than 12 months. If there is no contract then claim payments are final after 12 months. Adjustments related to coordination of benefits with Medicare and Medicaid can be made up to 36 months after submittal.

In Florida Governor Bush signed the bill amending the prompt payment law. The bill requires payers to pay, deny, or contest claims within 20 days for electronic claims and 40 days for paper claims. The bill also raises interest for late payments from 10% to 12%. Claims must be submitted within 6 months of service and requests for adjustments by payers must be made within 30 months from payment.

The prompt payment bills in Michigan were signed into law by the Lt. Governor. The bills require commercial insurers to pay claims within 45 days or face late interest of 12%. It took three years to get a prompt payment law passed in Michigan.