STATE LEGISLATIVE UPDATE

November, 2002 STATE LEGISLATIVE UPDATE

The elections are over. The victors have put down the champagne and cleaned up the confetti and have awakened to an extremely serious hangover. Now that they have the privilege to serve they are going to have to do something to stem the tidal wave of red ink flooding the states. One of the most serious trouble spots in most states is Medicaid. Legislatures will be grappling in 2003 with how to cut costs without hurting service to the state's poor. It is not an easy solution and I am certain that in many places cutting physician reimbursement levels will be looking very attractive.

As of the end of the month, the following state legislatures were in regular session or in recess: IL, MA, MI, NJ, NY, and OH. Through November there have been 102,202 new bills introduced in the states (this does not include carry-over bills from last year) and 28,296 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.

STATE LEGISLATIVE ELECTIONS

As at the federal level the Republicans had a surprisingly good showing at the state level this month. Historically Republicans have lost 350 state legislative seats in the mid-term election of a new Republican President. In fact the President's party has lost seats in every mid-term election since 1938. This year, however, the Republicans picked up about 200 seats and for the first time since 1952 there are more Republican state legislators than Democrats, 3,667 to 3,642.

The Republicans gained control of eight legislative chambers: Arizona Senate, Colorado Senate, Georgia Senate (via post-election defections), Missouri House, North Carolina House, Texas House, Washington Senate and the Wisconsin Senate. Democrats gained control of one chamber, the Illinois Senate, and created a tie in the previously Republican-controlled Oregon Senate. In the Vermont House the Republicans lost their majority, but still have a plurality due to the seven independent members.

Prior to the election the Republicans controlled both chambers in 17 states, Democrats controlled both chambers in 18 states and 14 states had divided control (Nebraska has a unicameral, non-partisan legislature that in reality has more Republicans). After the election, Republicans control both chambers in 21 states (AK, AZ, CO, FL, IA, ID, KS, MI, MO, MT, ND, NH, OH, PA, SC, SD, TX, UT, VA, WI, and WY), Democrats control both in 16 (AL, AR, CA, CT, HI, IL, LA, MA, MD, ME, MS, NM, OK, RI, TN, and WV) and 12 states have split control (DE, GA, IN, KY, MN, NC, NJ, NV, NY, OR, VT, and WA).

The surprising success of the Republicans continued at the Governor level as well. Entering the election the lineup was 27 Governors for the Republicans, 21 for the Democrats and 2 Independents. Now it is 26 for the Republicans and 24 for the Democrats. This statistic hides the amount of actual change that resulted on the 5th. The Democrats gained controlled of 10 governorships held by Republicans (AZ, IL, KS, MI, NM, OK, PA, TN, WI, and WY) and 1 held by an Independent (ME). The Republicans picked up governorships in 8 states previously controlled by Democrats (AK, AL, GA, HI, MD, NH, SC, and VT) and 1 held by an Independent (MN).

In 12 states Republicans control both houses and the Governor's mansion (AK, CO, FL, ID, MT, ND, NH, OH, SC, SD, TX and UT) and Democrats control both houses and the Governor's mansion in 8 states (CA, IL, ME, MS, NM, OK, TN and WV). In 9 states Republicans control both houses with a Democratic Governor (AZ, IA, KS, MI, MO, PA, VA, WI and WY). Democrats both chambers with a Republican Governor in 8 states (AL, AR, CT, MD, HI, LA, MA, and RI). Five states have split control of the legislature and a Republican Governor (GA, MN, NV, NY and VT). Seven states have split control of the legislature and a Democratic Governor (DE, IN, KY, NC, NJ, OR, and WA).

TORT REFORM

An omnibus tort reform package passed out of the Ohio Senate in November. Emboldened by the victories of two Republicans in races for the Ohio Supreme Court the medical community is pushing for passage of the bill by the end of the year. A prior tort reform measure was ruled unconstitutional by a one-vote margin in the Ohio Supreme Court. Observers believe that after the election victory of the two Republicans there is a pro-tort reform majority on the Court.

The bill would cap non-economic damages at $250,000 or three times economic damages not to exceed $500,000. It also would extend the statute of limitations from three years to four and allow introduction of collateral source payment information and allow periodic payment of future damages. Lastly, the bill limits the amount of the contingency fee that the plaintiff lawyer can take from the plaintiff.

A Senate Committee in New Jersey tabled a doctor supported tort reform bill in anticipation of a bi-partisan bill without caps that two Senators are drafting.

Tort reform legislation has also been pre-filed for next year in Texas and Montana.

PROMPT PAYMENT

New Jersey for the first time fined an insurance company for violating the state prompt payment law. On November 4, the fine of $200,000 against CIGNA HealthCare of New Jersey was announced. The state is currently examining the prompt pay practices of two other managed care organizations.

SCOPE OF PRACTICE

A bill to allow patients direct access to physical therapists passed the House of Representatives in Michigan this month during the lame duck session. A similar bill in the Senate has not yet made it out of Committee. A bill allowing direct access to physical therapists passed out of committee in the New Jersey Assembly in November.