STATE LEGISLATIVE UPDATE

APRIL 2003 STATE LEGISLATIVE UPDATE

As Winter turns to Spring the states see no light at the end of the tunnel on Medicaid. According to American Medical News an "analysis by the Center on Budget and Policy Priorities estimates that 1.7 million people will lose their Medicaid coverage this year due to state changes in eligibility criteria." Medicaid is often the lowest payer and state legislators are looking to slash reimbursement even more. Proposed reductions include 5% in Texas and 15% in California.

As of the end of the month, the following state legislatures were in regular session or in recess: AK, AL, AZ, CA, CO, CT, DE, FL, HI, IA, ID, IL, KS, LA, MA, ME, MI, MN, MO, NC, NE, NH, NV, NY, OH, OK, OR, PA, RI, SC, TN, TX, VT, and WI. The legislatures in AR, GA, IN, KY, MD, MS, MT, ND and WA adjourned in April. Through April there have been 148,825 new bills introduced in the states and 16,953 have become law.

Some of the bills the Department of Socioeconomic & State Society Affairs is tracking are outlined below. If you have any questions please give Jay Fisher a call at 800-346-2267, x4336.

TORT REFORM

A bill passed in Arkansas clarifying the tort reform bill that was signed into law in March. The bill states that the cap on punitive damages applies "for each plaintiff." This means if there is more than one plaintiff then a defendant could pay more punitive damages than the cap amount.

A bill was signed in law in Colorado that provides that admissions of guilt, apology or grief by a physician are not admissible in a liability action. A similar bill passed the House of Representatives in Oregon. As the month ended the two houses in Florida were not close to agreement on tort reform. The House and Governor are pushing for a $250,000 cap on non-economic damages while the Senate does not support any cap. With the legislature set to adjourn in early May a special session is imminent.

In April the legislature in Washington adjourned. The Senate passed a bill with a cap while the House of Representative did not support a cap. The medical community is pushing for the legislature to consider the issue during its special session. The tort reform bill in Georgia failed to pass before adjournment, but can be considered in 2004. A bill to create a $250,000 cap on non-economic damages failed in Maine.

A bill was signed into law in Mississippi to create a state run insurance program for physicians to provide liability insurance as a last resort. A bill was signed in Montana limiting punitive damages to $10 million or 3% of the defendant's net worth, whichever is less. A bill passed the Senate in New Hampshire to eliminate the loss of opportunity doctrine that the N.H. Supreme Court created and that increases the type of damages for which a patient can sue.

SCOPE OF PRACTICE

The PT direct access bill in Connecticut was amended in committee to only allow patient access to a PT without a physician's referral for wellness care. The PT direct access bill in Indiana failed to pass before adjournment. A bill was signed in Oklahoma to allow PT direct access to children for treatment under the Individuals with Disabilities Education Act and the Rehabilitation Act of 1973.

PHYSICIAN OWNERSHIP OF HEALTHCARE FACILITIES

This year has seen increased legislative activity aimed at limiting a physician's ability to own healthcare facilities, such as ambulatory surgical centers and specialty hospitals. This year Indiana and Ohio saw the introduction of legislation that would ban physicians from referring patients to a facility where they have a financial interest. The bill in Indiana failed to move during session, but the sponsor plans to organize meetings with stakeholders to discuss the issues involved with hospitals and specialty hospitals.

A bill in California would add "outpatient surgical centers" to the self-referral ban under the state's workers compensation act. Legislation is moving in Connecticut to require all new surgical centers to obtain a certificate of need (CON) and all existing surgical centers to obtain a license. A bill to remove MRI ownership from CON requirements has passed the House in Alabama. A bill to eliminate some MRIs from CON is under consideration in Massachusetts. A bill passed the House in New Hampshire to repeal most of the CON law. It faces tough going in the Senate.

Bills under consideration in Louisiana would add ASCs to the CON law, require physician disclosure of financial interest in a specialty hospital, and establish a new regulatory licensing category for specialty hospitals.

PROMPT PAYMENT

While the volume of prompt payment legislation has decreased this year states are still dealing with how to define what constitutes a clean claim and how to increase administrative powers so that insurers abide by the law. Since the February update prompt payment legislation has been introduced in Alabama, Georgia, Louisiana, New York, Pennsylvania and South Carolina.

A bill was signed into law in Montana. The bill provides that all late payments must include a 10% late interest penalty. Previously, interest was only paid after the state ruled that late payment was a general business practice of the insurer.

A prompt pay bill passed out of the Senate in Texas. An orthopaedist testified in favor of the bill in committee. The deadlines under the bill are 30 days for electronic claims and 45 days for paper. Claims must be submitted within 95 days of service. If additional information is needed it must be requested within 30 days of receiving the clean claim and the insurer may only make one such request. A physician can recover court costs from the insurer in a lawsuit to obtain payment of late claims. The state may adopt rules that specify the information that must be entered into the appropriate fields on the applicable claim form for a claim to be a clean claim. Insurers only have 180 days to request refund of an overpayment.

The bill also allows a physician to request a description and copy of the "coding guidelines, including any underlying bundling, recoding, or other payment process and fee schedules."