HCS HB 328 & 88 -- MANAGED CARE

SPONSOR:  Harlan

COMMITTEE ACTION:  Voted "do pass" by the Committee on Critical
Issues, Consumer Protection and Housing by a vote of 18 to 2.

This substitute makes numerous changes to the managed care
statutes.  In its main provisions, the substitute:

(1)  Requires that a managed care organization be licensed by
the Department of Insurance rather than certified by the
Department of Health;

(2)  Clarifies that providers will not be required to submit
copies of their income tax returns to a health carrier.  The
health carrier 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;

(3)  Allows direct access to a participating obstetrician,
gynecologist, or obstetrician/gynecologist in the provider
network.  A health carrier is prohibited from imposing
surcharges, additional copayments, or deductibles for accessing
the obstetrician, gynecologist, or obstetrician/gynecologist
unless the same are imposed on other types of health care
services received in the network;

(4)  Specifies that the "prompt pay" provisions of Section
376.383, RSMo, apply after a health carrier receives a claim for
health care services provided in the state.  Current law 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 necessary to process the entire claim;

(5)  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.  If the court
finds a violation, it will award the plaintiff $50 per day
beginning 10 days following the date interest began to accrue in
addition to the claimed reimbursement and interest;

(6)  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 an electronic confirmation within 24 hours of receipt
of an electronically filed claim for reimbursement, and to
accept all medical codes and modifiers specified in the
substitute;

(7)  Requires carriers to accept electronically filed
reimbursement claims starting January 1, 2003, and requires the
Department of Insurance to promulgate rules regarding the format
of the forms;

(8)  Requires health carriers to furnish providers with a
current fee schedule for reimbursement amounts of covered
services for which the health carrier is contracted to provide
and prohibits carriers from requesting a refund against a claim
more than 12 months after a carrier has paid the claim, except
in cases of fraud or misrepresentation by the provider;

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

(10)  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;

(11)  Effective July 1, 2002, requires health carriers to issue
each enrollee a card which includes a telephone number for the
plan, prescription drug information, and a brief description of
the enrollee's plan;

(12)  Requires health carriers to provide, upon notification, an
enrollee with the forms and instructions necessary to enroll a
newly born child if an application is required in order to
continue coverage beyond the 31-day period after the child's
birth;

(13)  Prohibits "hold harmless" clauses that require a health
care provider to assume the sole liability of the provision of
health care services.  Any contract between a health care
provider and a health carrier will include a clause which states
that each party will be responsible for its own negligence or
intentional wrongdoing;

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

(15)  Adds prescription medication to the definition of the term
"health care service" and modifies the definition of the term
"certification" to include a determination that the health care
service is a covered benefit under the plan;

(16)  Requires health carriers to notify the dispensing
pharmacist, prescribing physician, and enrollee when a
nonformulary drug is authorized with conditions;

(17)  Allows a health carrier to retract a prior certification
of a health care service if the enrollee's coverage under the
plan has exceeded the enrollee's lifetime or annual benefits
limit;

(18)  Requires a health carrier to provide a certification
decision for emergency services within 45 minutes instead of 60
minutes;

(19)  After January 1, 2004, requires health carriers to use
standardized forms for referrals and explanations of benefits.
The Department of Insurance must establish a task force by
January 1, 2003, to develop the standardized forms.  These
provisions are preempted if the federal government develops
standardized forms;

(20)  Requires health carriers to make available formulary
information to participating pharmacists via the Internet or
other electronic means after January 1, 2004;

(21)  Requires all managed care organizations to allow enrollees
the right to select long-term care facilities which have the
same religious orientation as the enrollee.  If a religiously
appropriate facility is not in the managed care organization's
provider network, it will provide the enrollee the option to
receive care from an out-of-network, long-term care facility
that meets specific qualifications; and

(22)  Repeals 2 sections prescribing standardized forms for
explanation of benefits and referrals.

FISCAL NOTE:  Estimated Net Cost to All Funds is Unknown for FY
2002, FY 2003, and FY 2004.  Expected to exceed $100,000
annually.

PROPONENTS:  Supporters of HB 328 say that many claims are
processed at a very slow rate, causing financial hardship for
providers.  Corrections to claims often delay the process until
it is beyond the time frame in which the provider is authorized
to submit the claim for payment.  Also, they say that there
should be a time limit for a carrier to reverse paid claim
decisions.  Supporters also say that women should have direct
access to their obstetricians and gynecologists; direct access
reduces redundant care provided under the referral system.

Supporters of HB 88 say that the referral system slows diagnosis
and treatment, and everyone knows that early detection of cancer
is crucial.  They say that direct access offers benefits for
everyone involved, especially for patients who avoid delays in
getting needed care.

Testifying for the HB 328 were Representatives Harlan and
Holand; Medical Practice Administrators; Dr. Gordon Goldman; Dr.
Ron Chod; Missouri Podiatric Association; Missouri Pharmacy
Association; Missouri State Medical Association; Medical
Managers of Kansas City; BJC Health Care Systems; Health
Midwest; Missouri Chiropractors; Missouri Optometric
Association; Missouri Osteopathic Association; Missouri
Association of Social Workers; Metropolitan Ambulance Services
Trust (MAST); and Missouri Hospital Association.

Testifying for HB 88 were Representative Barry; Dr. Gordon
Goldman; Governor's Office; and Planned Parenthood.

OPPONENTS:  Those who oppose HB 328 say that the bill is
unnecessary and that it regulates day-to-day operations.
Opponents say that claims processing has improved significantly
over the past year.  Health carriers are working on complying
with the federal HIPPA legislation which should resolve most of
the problems here in Missouri.  They also do not wish to be sued
on unpaid claims and the interest due on the unpaid claim; they
recommend relying on the Department of Insurance to regulate the
carriers.

Opponents of HB 88 say that direct access to gynecologists and
obstetricians is a cost-driver.  Some say they already offer it
voluntarily but could support the bill if it allowed direct
access to "in network" gynecologists and obstetricians.

Testifying against HB 328 were Health Net; Missouri Association
of Health Plans; United Healthcare Midwest; Blue Cross Blue
Shield Missouri; Cigna; Missouri Chamber of Commerce; Associated
Industries; and Health Insurance Association of America.

Testifying against HB 88 were United Healthcare and Health
Insurance Association of America.

Donna Schlosser, Legislative Analyst

Missouri House of Representatives
Last Updated November 26, 2001 at 11:43 am