August 2000 Bulletin

In Brief

Seventeen states have considered bills to allow independent physicians to collectively negotiate fees and other contract provisions with insurers, but none have passed, according to the National Conference on State Legislatures. Most of the states have closed their legislative sessions for the year. The legislative council of the District of Columbia approved a bill in early June; it may become the second negotiation law, after Texas’ 1999 law. Medical society lobbyists say three factors explain why the legislation hasn’t passed. Consumer groups are concerned physicians would get too much leverage and raise health insurance rates. The physician community is divided over whether to pursue state or federal legislation. And, lawmakers are worried about supporting an untested policy in an election year.

U.S. Supreme Court rulings

The U.S. Supreme Court ordered Pennsylvania courts to reconsider whether a Pennsylvania HMO can be sued in state court by a man who says inadequate care left him a quadriplegic. The patient settled a suit against the doctor and hospital, and then sued U.S. Healthcare Systems of Pennsylvania. A state court said the federal law preempted the lawsuit, but the Pennsylvania Supreme Court let the lawsuit go forward. In another case, the U.S. Supreme Court turned down an appeal by an HMO in New Jersey that sought to fend off a lawsuit by a couple whose newborn baby died after being sent home from the hospital one day after birth. HMO lawyers said the lawsuits did not involve the quality of care, but did involve HMOs’ administrative decisions on what treatment to offer. Therefore, they said, the state cases were preempted by ERISA. But lawyers in both cases said ERISA does not displace state courts’ role in hearing claims of inadequate health care.

New York

One of the last bills to be approved by the New York state Assembly on June 23 was the so-called physician profiling measure. The Health department would have to make available certain information about physicians, including where they were educated, whether they have been disciplined by the state or a hospital, the names of other doctors in their practice and the name of their malpractice insurance provider. The measure also would require that malpractice judgments or verdicts against doctors be posted and mandate that three or more malpractice settlements with patients within the last 10 years also be posted. The profiles will be available through the web site maintained on the Internet by the state Department of Health and via an 800 telephone number.


Tennessee residents won’t get the right to sue their managed care plans this year. A bill allowing the law suits passed the House twice this legislative session, but the Senate sent the issue to a study committee. Gov. Don Sundquist said he would veto the legislation. Sen. Curtis Person said the governor believes the health care system is so fragile, the legislation could keep managed care organizations out of the state.

Rhode Island

Rhode Island lawmakers, concerned about the lack of documentation of medical mistakes at hospitals, have added money to next year’s state budget to increase inspections. Rep. Normal Knickle proposed expanding surveillance after finding the state’s 14 hospitals reported just six errors resulting in serious harm in 1998. He lobbied for $300,000 in the Health department budget to hire consultants to more closely watch hospital operations.

New Hampshire

New Hampshire has a new prompt payment law that requires payment of all Medicaid and paper non-Medicaid claims within 45 days. Electronic non-Medicaid claims must be paid within 15 days. Interest of 1.5 percent per month is charged for late payment. Administrative fees can be assessed at $5,000 per violation up to $10,000.

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