August 1999 Bulletin

In Brief


Legislation requiring HMOs to pay or deny a home health care claim within 30 days of receiving it went into effect July 1. The law, signed by Gov. Jesse Ventura, also requires HMOs to pay interest on valid claims they have held for more than 30 days. The interest rate for late payments will be 1.5 percent per month or any part of the month.


Florida Gov. Jeb Bush signed a bill that revises that state's patient self-referral law to allow limited referrals by outside physicians to diagnostic imaging services. The measure addresses a number of issues raised in a 1997 state appellate decision, which held that a group practice that allows any outside referrals to a group's equipment or facilities loses its privilege to the group-practice exception under the act. Under the new law, referrals to sole providers and group practices for diagnostic imaging services are authorized, if the referring physician has no investment interest in the practice, excluding radiation therapy services. The sole provider and group practices also may not accept more than 15 percent of their patients from outside referrals. The law went into effect July 1.


Iowa Gov. Tom Vilsack recently signed into law a comprehensive managed care consumer protection package. The patients' bill of rights prohibits gag clauses; establishes a prudent-layperson standard; allows continuity of care for pregnant women; sets up an independent, external review process for coverage denials; and ensures that managed care enrollees receive detailed information about their health plan.


Louisiana HMOs are covered by a state rule under which medical necessity determinations affecting the diagnosis or treatment of a patient constitutes the practice of medicine and must be made by a licensed physician, according to a letter by Louisiana Attorney General Richard P. Leyoub. The state commissioner of insurance can enforce the rule by suspending or revoking a certificate of authority issued to an HMO, or enforcement can be obtained through an action by the Board of Medical Examiners, Leyoub's opinion letter stated. The opinion was requested by the Louisiana Office of Health Insurance.

New Hampshire

The New Hampshire state Senate put off until January action on Gov. Jeanne Shaeen's HMO Accountability Act after the House Speaker cast a tie-breaking vote against making HMO medical directors liable for treatment decisions. The Governor and the Senate wanted medical directors to be held liable so when the House sent the bill, minus the liability feature, to the Senate, the senators killed it and amended another bill with the liability feature and voted to consider it in January. The House version of the Act would have established a committee to recommend guidelines for the state's medical board to use in determining if a medical director exhibited a pattern of denying medically necessary care.

New Jersey

New Jersey health regulators have cited two of the state's largest HMOs for failing to comply with rules requiring prompt payment of claims. Horizon Blue Cross Blue Shield of New Jersey and Oxford Health Plans of New Jersey are the first HMOs to be cited for noncompliance since the prompt pay regulations took effect Oct. 1, 1998. The regulations require HMOs to pay for the uncontested portion of any claim within 60 calendar days of receiving it and to explain in writing to a member or provider the reason for contesting or denying a claim within 45 days of receiving it. HMOs must pay interest at an annual 10 percent rate on overdue payments. Horizon was cited for a total of 12 complaints, including one from an orthopaedic group with 63 unpaid claims totaling $37,000.


Ohio Gov. Robert Taft signed a bill that would allow patients to appeal coverage denials to a panel of medical and insurance experts to be assigned by the Ohio Department of Insurance.

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