December 2000 Bulletin

In Brief


Gov. Gray Davis signed into law a prompt payment bill that requires the state Department of health Care to develop regulations defining what constitutes a "complete and accurate" claim between managed care plans and providers. He also signed a bill authorizing the department to investigate incidents of unfair payment patterns by health plans. New legislation also raises the interest penalty on late payments to 15 percent from 10 percent and requires a plan to automatically include the interest in payments or pay an additional $10 fee to the claimant. Gov. Davis also signed a bill to fund a study of hospital emergency room on-call coverage issues. Gov. Davis said in a statement that hospitals around the state have found it increasingly difficult to provide the required on-call specialists for emergency care. The study is due by Jan. 1, 2002.

New York

New York Gov. George Pataki signed a bill that will create an Internet web site containing "profiles" of doctors. The information will include where the doctors were educated, the names of other doctors in their practice, the health care plan they participate in and the name of the malpractice insurance provider. The law requires judgements, criminal convictions and state disciplinary actions within the last 10 years to be listed. Malpractice settlements within 10 years would be included if there are more than two or if the health commissioner orders that they be listed. The law narrows the time frame in which hospitals and health care plans must report suspected misconduct by a doctor from 60 days to 30 days. They also must clearly state the reason for a doctor’s dismissal or resignation. State health and education departments must immediately alert hospitals and health care plans of disciplinary actions against a doctor.


The Texas Attorney General John Cronyn has filed a petition to the U.S. Supreme Court asking for a review of a federal appeals court ruling that struck down a part of a Texas law that established an independent review mechanism to challenge medical necessity decisions by HMOs. Cronyn said the U.S. Court of Appeals for the Fifth Circuit misinterpreted the law and Supreme Court precedent. Thirty-seven states and the District of Columbia have passed laws allowing independent review, Cronyn said. The appeals court said "that creation of an "alternative mechanism through which plan members may seek benefits due to them under terms of the plan" conflict with remedy provisions of ERISA." Because of the conflict, ERISA preempted the state independent review law, the Fifth Circuit said.


The U.S. Court of Appeals for the Seventh Circuit upheld an Illinois law that requires HMOs to provide independent reviews of challenged coverage decisions. The appeals court ruled that Illinois statute was not completely preempted by ERISA. (The ruling is in opposition to a ruling in Texas; see earlier item). The Illinois court awarded summary judgment to a women whose HMO refused to pay for a surgical procedure found to be "medically necessary" by an independent reviewer.


Massachusetts voters rejected a measure that would have required the state legislature to enact universal coverage by July 2002. It also would have established a stringent set of HMO controls, including a requirement that HMOs spend no more than 10 percent of their revenues on administrative costs and executive salaries. It also would have put a temporary ban on the entry of for-profit health care companies in the state. Local HMOs spent more than $3 million in advertising to defeat the measure.

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