April 1996 Bulletin

Health care hot issue in many states

The Academy has worked with medical specialty organizations and patient groups to promote legislation that protects and promotes patient and physician rights. Although such proposals were initiated at the federal level by the national Patient Access to Specialty Care Coalition, many states are now considering legislation which would address the same concerns. State legislative initiatives dealing with health care reform generally cover the following issues:

This year, numerous states are considering health care reform legislation which addresses these and other issues. The following summary of state legislative initiatives was prepared by Virginia Mann, director of the Academy's department of state society relations and Todd Gedville, manager of state society relations. Academy members interested in any legislative proposals in their state should contact their state orthopaedic society or the Academy's department of state society relations (800) 346-2267, ext. 4333.

Arizona

Proposed legislation in Arizona would require the sponsor of a health plan that restricts access to providers to offer all enrollees the opportunity to obtain coverage for out-of-network services through a point-of-service plan. The law also requires the plan to disclose financial requirements that affect payment levels. The legislation proposes that health benefit plans use a standardized written format to allow customers to compare the attributes of the plans and detailed information about coverage, utilization review, financial arrangements, medical loss-ratio and patient satisfaction.

Delaware

The Fairness and Choice Under Health Benefits Plans Act would establish certification requirements for all plans and require that patients are provided with adequate information to make informed choices. The act says that patients must be offered a choice among various coverage options, including a point-of-service option. Any additional fees for a point-of-service plan would have to have an actuarial basis. This act also would implement other patient and physician protections. This legislation was introduced in June 1995, and has not moved forward.

Georgia

The Georgia legislature is considering several proposals dealing with health care, including a Patient Protection Act. The act says that a managed care plan may not use financial incentives that limit medically necessary and appropriate services. The proposal also requires that a provider offer to all enrollees the opportunity to obtain coverage for out-of-network services through a point-of-service option, unless less than 5 percent of the group's eligible enrollees elect the point-of-service option. Any additional premium charged must be based on the actuarial value of that coverage. This legislation is unique in that it applies to physicians and dentists. Other legislation being considered in the state provides for a variety of physician and patient safeguards. These legislative proposals were introduced in January 1996.

Hawaii

There are two bills in Hawaii that are currently being considered. One bill would require all health care provided by the state to be through managed care plans. Each beneficiary in the plan shall be offered the opportunity to obtain coverage for out-of-network services through a point-of-service plan at the time of enrollment. There may be an additional fee charged an enrollee, however, any alternative premium must be based on the actuarial value of the coverage. The other legislation would require that all insurers offer enrollees the option to obtain out-of-network coverage through a point-of-service plan. This legislation was introduced in January 1996.

Idaho

Legislation has been introduced in the Idaho Senate that would require all managed care entities in the state to provide prospective enrollees information regarding the terms and conditions of the plan, including the extent and amount of coverage and benefits, and any exclusions; prior authorization requirements; description of financial incentives not to provide care; and procedures for review, grievances, etc. The proposed legislation also requires that plans offer all enrollees a point-of-service option or a plan providing for payment to a broad array of providers.

Illinois

The Managed Care Patient Rights Act has been introduced in the Illinois legislature. The legislation provides for patient choice of physician through a point-of-service option; has an any willing provider clause for physicians; prohibits insurance company "gag" rules; requires the health care plan to have medical staffs for utilization review; protects physicians who act as patient advocates; and provides for minimum optional stays for childbirth. One unique aspect of the proposed legislation allows patients the right to choose any licensed physician participating in that plan to act as their primary care provider.

The Illinois Coalition for Patient Access and Choice, which was co-founded by the Illinois Orthopaedic Society, has been asked for their support of this legislation. The coalition has expressed some concerns about the details of the legislation, and will be determining their position in the coming weeks.

Another legislative proposal in the state focuses only on the requirement for a point-of-service option. These legislative proposals were introduced in February 1996.

Indiana

Several bills were introduced in the Indiana legislature which addressed managed care/patient access issues. One bill would require health insurance plans to offer enrollees the opportunity to obtain coverage for out-of-network services through a point-of-service plan, with a copay not to exceed 20 percent. Other legislation would have provided direct access to virtually all specialists except orthopaedic surgeons. Included in the direct access legislation are non-physicians groups, including podiatrists and chiropractors. As a result of amendments to the second bill, a managed care study committee was formed to study all aspects of managed care. The committee will have a two-year term. Because of the formation of this committee, the original bills are not likely to move forward.

The Indiana Patient and Family Access to Specialty Care Coalition, which was co-founded by the Indiana Orthopaedic Society, was asked to support these legislative proposals, but decided to not support any legislation this term. These legislative proposals were introduced in January 1996.

Maine

The Maine legislature is considering an act to "Ensure Fairness and Choice to Patients and Providers under Managed Health Care." The comprehensive legislative proposal requires plans to offer enrollees the opportunity to obtain coverage through a point-of-service plan for out-of-network providers. Any co-payments associated with this plan must be reasonably related to actual costs. The legislation also requires plans to report any financial incentives which might interfere with medical care. One of the most interesting provisions of the plan requires plans to initially have a loss-ratio of not less than 85 percent, increasing annually until it reaches 90 percent. The bill also provides other patient and physician protections. This legislation was introduced in May 1995, and has had hearings this year.

Massachusetts

Massachusetts is believed to be the first state to ban "gag clauses" by insurance carriers which prohibit physicians from telling their patients about the relationship between treatment and the terms of the patient's insurance coverage. This legislation was signed into law in January 1996.

Minnesota

Minnesota is currently considering legislation which requires each health care plan to offer at least one point-of-service product in each market in which it operates. The cost of such a plan must be approved and cost-sharing provisions actuarially justified. This legislation was introduced in January and February 1996.

Missouri

The legislature has before it legislation that would create the Health Benefit Plan Committee. The Governor would appoint 14 members (at least two of whom would be physicians) under the Small Employer and Individual Health Insurance Act. This committee would establish five standard benefits packages and all insurers would be required to offer at least one of these plans. If an insurer offers a plan that restricts access to providers, the plan also must offer a point-of-service option with a co-payment cap of 20 percent. The bill also calls on the Department of Insurance and Revenue to create a plan permitting the purchase of health care services using a Medical Savings Account or other plan with tax incentives. This legislation was introduced in January 1996.

New Jersey

Two bills have been introduced into the New Jersey General Assembly. The first bill would create the Health Care Quality Act. Provisions in this bill would require managed care plans to register with the Department of Heath and disclose specific information to covered persons. This bill also would require managed care plans to offer a point-of-service option to all policy holders and provide them with a detailed explanation of the financial costs to be incurred by the covered person who selects that plan option. This bill also includes protections for providers who act as advocates for their patients, and would prohibit plans from providing financial incentives to the health care provider for withholding covered health care services.

The second bill requires plans to be certified by the Commissioner of Health. Plans would have to provide certain patient protections including continuation of care if the provider is terminated by the plan. Also, plans must offer a point-of-service option to all its enrollees. With respect to a utilization review program operated by a managed care plan, this program would be overseen by a licensed physician, and procedures and criteria used by the program would be developed in consultation with participating providers.

New York

The New York legislature is considering the Health Care Consumer Protection Act of 1996. This legislation calls for extensive disclosure of information to patients, including a description of any financial arrangements with providers, such as withholds and incentives which may restrict referral or treatment options. The legislation also would require that
financial incentives offered to health care providers not impair the quality of care to enrollees. The legislation would provide for a point-of-service option with reasonable co-pays. There also is an any willing provider provision in this proposal.

Oklahoma

The "Fairness in Managed Care" and the "Patient Protection" acts were introduced into the General Assembly. The first of these bills would establish a certification process for qualified managed care plans meeting specific requirements listed in the legislation. These requirements include a detailed explanation of the plan to the enrollee, physician protection language, restriction of "gag" rules and, for those enrollees whose only option is an HMO plan, the ability to obtain additional coverage through a point-of-service plan. Out-of-pocket expenses for the point-of-service plans are capped at $3,000 per year for individuals and $5,000 per year for families.

The second bill also provides for patient protection, physician protection and requires that when an HMO is the only entity providing services under a health benefit plan, it must offer to enrollees the option to obtain out-of-network services through a point-of-service plan.


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