SPONSOR: Maxwell (Harlan)

COMMITTEE ACTION: Voted "do pass" by the Committee on Critical Issues by a vote of 22 to 0.

This substitute changes provisions of law relating to managed care. In its major provisions, the substitute:

(1) Clarifies that Section 354.603, RSMo, does not require providers to submit copies of their income tax returns to a health carrier. The entity may require a provider to obtain audited financial statements if the provider receives 10% or more of the total medical expenditures made by the health carrier;

(2) Specifies that the "prompt pay" provisions of Section 376.383 apply after a health carrier receives a claim for a health care service. The current statute applies when a carrier receives a claim from a person entitled to reimbursement. The carrier is also required to provide, within 45 days of receiving the claim, a complete description of all additional information that is necessary to process the entire claim;

(3) Allows a person who has filed a claim for reimbursement for a health care service to file a civil action against a carrier for violations of the "prompt pay" provisions of Section 376.383. The court may award attorney fees and costs to a prevailing plaintiff unless the court finds that the carrier's position was substantially justified;

(4) Requires health carriers, when processing claims, to permit providers to file confirmation numbers of authorized services and claims for reimbursement in the same format, to allow providers to file claims for reimbursement for a period of at least one year following the provision of a health care service, to issue within 24 hours an electronic confirmation of receiving a claim for reimbursement, and to accept all medical codes and modifiers used by the Health Care Financing Administration;

(5) Requires health carriers to furnish providers with a current fee schedule for reimbursement amounts of covered services;

(6) Prohibits carriers from requesting a refund against a claim more than 6 months after the provider has filed the claim except in cases of fraud or misrepresentation by the provider;

(7) Requires health carriers to provide Internet access to a current provider directory;

(8) Requires health carriers to inform enrollees of any denial of health care coverage. The explanation must be in plain language that is easy for a layperson to understand;

(9) Prohibits "hold harmless" clauses that require a health care provider to assume the sole liability of the provision of health care services;

(10) Prohibits health carriers from requiring a health care provider to agree to participate in all health care plans operated by the health carrier as a condition for participating in one plan;

(11) Prohibits health carriers from requiring health care providers to participate in lease business if the health carrier leases its provider network to another health carrier without the provider's consent;

(12) Requires group insurers to issue to enrollees a card that includes a telephone number for the plan and a brief description of the enrollee's type of health care plan;

(13) Requires insurers to provide both parents of a covered child with coverage information regardless of whether the parent is the primary policyholder;

(14) Requires health carriers to notify the pharmacist, primary care physician, and enrollee when a nonformulary drug is authorized for a limited period of time;

(15) Allows a health carrier to retract a prior authorization of a health care service if the enrollee's coverage under the plan has exceeded the enrollee's lifetime or annual benefits limit. Certification of a health care service is deemed to be an authorization of a health care service; and

(16) Requires health carriers to use, after January 1, 2002, standardized forms for referrals and the explanation of benefits. The Department of Insurance must establish a task force to develop the standardized forms.

The substitute also clarifies that managed care organizations licensed by the Department of Insurance must allow enrollees the option of receiving covered services in the long-term care facility which serves as the enrollee's primary residence and must allow the enrollee, if certain conditions are met, to select a long-term care facility with the enrollee's religious affiliation. In addition, health carriers are required to notify enrollees of the proper procedures to enroll a newly born child if the carrier is notified of the birth within 31 days of the date of birth.

FISCAL NOTE: Cost to all funds of Unknown in FY 2001, FY 2002, and FY 2003. Estimated Net Cost to General Revenue Fund of Unknown in FY 2001, FY 2002, and FY 2003. Expected to exceed $100,000 annually.

PROPONENTS: Supporters say that this bill is necessary to clarify within Section 198.530 the appropriate licensing authority for managed care organizations.

Testifying for the bill were Senator Maxwell; and Missouri Jewish Federations.

OPPONENTS: There was no opposition voiced to the committee.

Katharine Barondeau, Legislative Analyst