December 1999 Bulletin

In Brief


The Pennsylvania legislature introduced Senate Bill 5, "The Lawsuit Abuse Reform Act." The legislation is a comprehensive tort reform measure that repeals joint and several liability, limits the recovery of punitive damages, enacts a statute of repose against manufacturers for defective products, protects innocent product sellers and provides for agreements to arbitrate. Collaborative efforts between business and physicians have resulted in the formation of the Pennsylvania Civil Justice Coalition, which leads in the efforts to enact this legislation.


Although currently in recess, Delaware legislators still have the option of pre-filing legislation in anticipation of next year's session. Senate Bill 251 was recently introduced and referred to the Senate Committee on Health and Social Services and establishes standards for the "prompt, fair and equitable settlement of claims." The bill requires insurers to pay claims within 30 days of receipt. The legislature reconvenes Jan. 11, 2000 and will take up debate on the bill at that time.


Based on the types of bills recently pre-filed in advance of the 2000 session, Florida legislators will continue debate on health care topics next year. House Bill 291 creates the "Managed Care Organization Accountability Act of 2000," and requires managed care plans to exercise ordinary care when making health care treatment decisions. Senate Bill 282 also addresses insurer liability as well as independent review procedures. Florida legislators do not meet again until March 2000.


After a long recess, the Michigan legislature introduced several bills addressing the prompt payment of physician claims. Senate Bill 694 provides definitions for "clean claim," and "health care payer" and establishes civil penalties for noncompliance. The legislation requires payment of clean claims submitted electronically within 30 days and within 45 days for hard copies. Senate Bill 695 addresses timely payment in workers' compensation cases. The bills have been referred to the Senate Committee on Health Policy. In addition, legislators introduced House Bill 5063, which establishes civil immunity of volunteer physicians.

New Jersey

New Jersey legislators have until the end of the year to act on bills that remain in committee as well as address several new bills that have been introduced in the past month. With the introduction of Senate Bill 2135, New Jersey becomes the fourth state to address the controversial topic of joint negotiations by health care providers. The bill describes permitted and prohibited negotiations and expressly prohibits physician strikes. Third-party representatives perform the negotiations upon approval from the state attorney general. Legislators also will soon debate requirements for standards of care in managed care plans. Assembly Bill 3421 requires health insurers to cover treatment ordered by health care providers based on generally accepted standards of health care practice, while Assembly Bill 3429 prohibits hospitals from denying admission to patients based on a patient's managed care coverage. The bill also requires managed care organizations to cover legitimate emergency health care.


The Wisconsin governor signed the state budget that creates an ombudsman in the state insurance commissioner's office to handle complaints against HMOs. The state Insurance Committee approved a bill which would allow patients who are denied certain medical, experimental or prescription drug treatments to appeal to third-party panels.

The Wisconsin Assembly introduced legislation to greatly expand access to specialty care. According to the provisions of Assembly Bill 520, patients can appeal managed care decisions and seek out the services of specialist physicians without a referral. This bill remains in the Assembly Health Committee. A similar bill, Senate Bill 258, has been introduced and referred to the Senate Committee on Health, Utilities, Veterans and Military Affairs.


Under regulations that took effect Nov. 11, Washington health care providers should expect more timely payment of their claims. According to the newly adopted rules, insurers are now required to pay documented "clean" claims within 30 days. All claims must be paid within 60 days. Insurers that fail to pay within the established time limits will be assessed a 12 percent annum interest fine on late payments. Deborah Senn, Washington Insurance Commissioner, has also advised insurers to "immediately take steps to improve communications with their providers." She suggested insurers provide an explanation about why a claim is being rejected and to include health care providers in the development of utilization standards.


In a decision sure to impact on the insurer liability debate, on Sept. 30, the Illinois Supreme Court determined that a case involving the right of patients to sue managed care plans may move forward. The Court did not rule on the merits of the case, but rather determined the case may go to trial based on the presumption that HMOs "cannot be allowed to claim that the physician is solely responsible for the harm that results from treatment delayed or denied." The case involves a woman that died after her managed care plan denied a test for mouth pain that later resulted in cancer.


California Gov. Gray Davis signed legislation that makes California the first state to require hospitals to meet fixed nurse-to-patient ratios in an effort to force higher quality care. The new ratios will be set by the California Department of Health Services and will take effect in 2002. Currently, the agency sets ratios only for operating rooms, critical care units and newborn intensive care units.

Jennifer Kunde is a legislative analyst in the AAOS health policy department.

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