April 1997 Bulletin

States get patient protection bill

Women in government develops legislation

by Virginia V. Mann

Virginia V. Mann is director of the Academy's department of state society relations.

Patient and physician protections continue to be a top priority this session in state legislatures considering health care reform. As the managed care market continues to grow, state legislators appear determined to make certain that patients and physicians are protected from what many consider to be abuses in some managed care plans.

Included in this push is an effort by a group of state legislators who will introduce the Managed Care Consumer Protection Act in nine states. The legislation was developed by Women in Government, a bipartisan nonprofit educational association for elected and appointed women in state government. It will provide comprehensive safeguards for patients in managed care plans, and is an attempt to avoid the piecemeal safeguards that have been introduced and passed in many states to date. The nine states that will introduce this legislation are Colorado, Georgia, Delaware, Kansas, New Jersey, Ohio, Oregon, Tennessee and Texas.

The proposed legislation will make certain that managed care plans offer a point-of-service option. Patients utilizing this service may be charged additional fees. This portion of the proposed legislation is similar to what has been introduced in approximately half of the states. To date, Georgia, New York, Maryland, Minnesota, Oregon and Texas have required some form of a point-of-service option. In addition to the point-of-service option, plans will be required to provide a sufficient number of facilities and physicians, including specialists and subspecialists.

The model legislation also will require that plans use "a prudent layperson" definition of emergency care and provide coverage for such care without prior authorization. This portion of the legislation is similar to what has been passed in several states. It is expected that emergency care coverage will be considered by many state legislatures this session.

Ban 'gag clauses'

"Gag clauses" in managed care contracts also would be banned under this legislation. Last year, banning "gag clauses" was the second most popular issue in managed care legislation, after the "48 hour" maternity stay. Twenty-three states introduced bills to ban "gag clauses," last year; 18 of those states have banned "gag clauses." Also, several insurance carriers have taken steps to eliminate "gag clauses" in their contracts, including states where such legislation has not been considered.

Another important aspect of this model legislation is its intent to ensure that all clinical decisions are made by those who are medically-qualified. Health care plans will be required to appoint a state-licensed physician as the medical director responsible for treatment policies, protocols and quality assurance activities. In a rare move, this model legislation also would give patients the ability to access all FDA-approved drugs and devices. This would offer physicians the freedom to prescribe the most appropriate drug or device for the individual patient.

This model legislation also will require managed care plans to develop an appeals and grievance procedure that includes a timely response to complaints, assistance in the procedure, and a public log of all grievances and offers patients the right to appeal the plan's decision to an appropriate state agency. Plans also will be required to define and disclose limitations on coverage of experimental treatments and to provide a timely, written justification for any denial of experimental treatment to patients with a life-threatening condition. Several states have considered legislation that requires patients and physicians to be given a clear and timely appeals process. Also, some states have taken actions to protect physicians who act as an advocate for their patients.

Important precedent

Joy Newton, executive director of Women In Government, said, "The development and introduction of this bill sets an important precedent for legislatures that are both pro-consumer and pro-business in the age of managed care. These nine legislators saw beyond the current patchwork of legislation to regulate the rapidly growing managed care industry and fashioned a comprehensive bill that protects consumer rights without hobbling managed care plans with mandates and micromanagement."

State Rep. Kathryn Bowers (Tenn.) explained, "The bottom line is that we want to do what's right for consumers. We're hoping this bill will give other state legislatures a template for drafting their own consumer protection legislation."

Many of the provisions of this bill echo the goals of the national Patient Access to Specialty Care Coalition and state-level Patient Access Coalitions which the Academy helped to form.

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