HCS HB 1206 & 1484 -- MANAGED HEALTH CARE

CO-SPONSORS:  Bland (Hosmer)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Public
Health & Safety by a vote of 7 to 1.

This substitute requires the Department of Insurance to
establish standards for managed care plans by January 1, 1998.
The department is required to establish an appeal process for
consumers and providers aggrieved by a decision of the director.

Standards required of managed care entities include providing
information to prospective enrollees concerning: managed care
plan benefits and exclusions; review procedures for denial of
coverage; financial arrangements with providers that limit
services; responsibility of the enrollee for payment of
coinsurance, noncovered services, or out-of-plan services; loss
ratios; enrollee satisfaction; and complaint procedures.

The substitute also requires managed care entities to have
standards for issuing credentials to providers. Managed care
plans are required to allow providers in the plan service area
to apply for credentials and to give equal recognition to
osteopathic training.  Applications for credentials are to be
reviewed by a committee with representation of the applicant's
speciality and class of provider. Credentialing standards of the
providers must follow the standards established by the National
Committee on Quality Assurance (NCOA). A plan is not to
discriminate against an enrollee due to health or medical
conditions. The plan must give aggrieved providers reasons for
decisions.

The substitute also requires the director to establish standards
for entities to show adequate access to health care providers,
meet certain reserve requirements, and have provider
participation in deciding plan policy.

The substitute also requires managed care plans to offer
enrollees a plan which covers out-of-network options through a
point of service plan.  The managed care plan is allowed to
charge a different premium for this coverage, except such
premium cannot exceed the actuarial value of the coverage.

The Director of Insurance is required to establish a process to
review complaints by insureds and providers of denial of
coverage, inadequate access to providers, and failure to provide
covered services.  The director is required to review complaints
within 15 days of receiving the complaint.  The director is
allowed to fine managed care entities up to $1,000 per day per
violation.

The substitute establishes the Interagency Health Care Quality
Council to conduct an independent evaluation of the cost and
benefits of all health care services purchased by the State of
Missouri.

FISCAL NOTE:  Estimated Net Effect on Insurance Dedicated Fund
of $0 in FY 97, FY 98 & FY 99.  Estimated Net Effect on Consumer
Quality Assurance Process Fund of $0 in FY 97, FY 98 & FY 99.

PROPONENTS:  This legislation handles the managed care
environment systemically.  The interests of insurers and
physicians are balanced.  The market place is growing faster
than the regulatory authorities can track this growth.  The same
issues that affect the providers ultimately affect the
patients.  One goal of this legislation is to have patients
informed of their health care benefits.  Currently there are
some hush clauses under managed care.  This is a patient
empowerment bill.  This bill holds health plans accountable.  It
requires notice, due process, and an informed consumer.  The
most important part of this bill is the client grievance
procedure.

Testifying for the HB 1206 were Representatives Hosmer and
Naeger; Missouri Association of Osteopathic Physicians and
Surgeons; Missouri State Medical Association; Slaydon Harris;
Legal Services of Eastern Missouri; Missouri Association for
Social Welfare; Missouri Dental Association; Missouri Pharmacy
Association; and Missouri State Chiropractors Association.

Testifying for the HB 1484 were Representatives Hosmer and
Naeger; Missouri Association of Osteopathic Physicians and
Surgeons; Missouri State Medical Association; Slaydon Harris;
Legal Services of Eastern Missouri; Missouri Association for
Social Welfare; Missouri Dental Association; Missouri Pharmacy
Association; Missouri State Chiropractors Association; Richard
O'Neill; and Upjohn Company.

OPPONENTS:  This bill would make the cost of health care rise
for businesses with less than 100 employees.  Managed care
penetration would add costs to health care.  An employer looks
at health care as a way to remain competitive.  This bill is
radical because employers depend upon managed care.  This
legislation is not conducive to that trend.  The credentialing
is extensive and expensive.  Credentialing is still mandated
even if those physicians are not allowed into the network.
There may be complaints about managed care due to the learning
curve.  This bill gives special rights of employment to
physicians and other providers that would be included.  The bill
prevents managed care from dealing with the individual
contracts.  Costs are increased for all plans due to the
credentialing process.

Testifying against HB 1206 were Prudential; Kaiser Permanante;
Missouri Managed Health Care Association; General American Life
Insurance Company; St. Louis Area Health Coalition; Alliance for
Managed Care; Associated Industries of Missouri; and Missouri
Chamber of Commerce.

Testifying against HB 1484 were General American Life Insurance
Company; Missouri Managed Health Care Association; and Alliance
for Managed Care.

Harolyn Light Coffer, Research Analyst

HB 1206 -- Managed Health Care

Sponsor:  Hosmer

The bill requires the Department of Insurance to establish
standards for managed care plans by January 1, 1998. The
department is required to establish an appeal process for plans
aggrieved by a decision of the director.

Standards required of managed care plans include providing
information to prospective enrollees concerning: plan benefits
and exclusions; review procedures for denial of coverage;
financial arrangements with providers that limit services;
responsibility of the enrollee for payment of coinsurance,
noncovered services, or out-of-plan services; loss ratios;
enrollee satisfaction; and complaint procedures.

The bill also requires managed care plans to have standards for
the issuing of credentials to providers. Plans are required to
allow providers in the plan service area to apply for
credentials and to give equal recognition to osteopathic
training. Credentialing applications are to be reviewed by a
committee with representation of the applicant's speciality and
class of provider. If requested, the plan must give a provider
aggrieved by a decision of the plan reasons for the decision.

The bill also requires the director to establish standards for
plans to show adequate access to health care providers, meet
certain reserve requirements, and have provider participation in
deciding plan policy.

The bill also requires managed care plans to offer enrollees a
plan which covers out-of-network options through a point of
service plan. The managed care plan is allowed to charge a
different premium for this coverage, except such premium cannot
exceed the actuarial value of the coverage.