HCS HB 1932 -- MANAGED CARE

SPONSOR:  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.

FISCAL NOTE:  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 the current "prompt pay"
requirements are ineffective because health carriers frequently
deny receiving claims and have refused to acknowledge receiving
claims when the provider has hand-delivered the claims.  The
carriers frequently refuse to process claims because of
insufficient information and fail to cooperate with the provider
to obtain the information.  Providers often find that they are
unable to file claims because the contract period for filing
claims has expired after the provider has made numerous attempts
to file the claim and provide additional information.  Providers
experience financial losses due to unpaid claims and additional
administrative expenses for efforts to file claims.  Providers
must frequently accept an unfavorable contract with a carrier to
continue to provide care to their patients.  These contracts
often allow the carrier to lease the provider network to others
without the specific consent of the provider or the network.

Testifying for the bill were Representative Harlan; Missouri
State Medical Association; Metropolitan Medical Society of
Greater Kansas City; Greater Kansas City Medical Managers
Association; Medical Managers of Missouri; Washington University
School of Medicine Faculty Practice; Missouri Podiatry
Association; Missouri Dental Association; National Association
of Social Workers; AARP; Missouri Pharmacy Association; Boone
County Medical Society; University of Missouri Health Sciences
Center; Missouri State Chiropractors Association; and Missouri
Association of Osteopathic Physicians and Surgeons.

OPPONENTS:  Those who oppose the bill say that health plans
should be allowed to seek refunds from providers for the same
amount of time that providers may file claims against plans.
Prohibiting plans from leasing networks and using "all products"
clauses limits choices for consumers.  Carriers frequently pay
claims within 45 days and one carrier testified that it pays
98.5% of "clean" claims within 45 days.  Carriers should only be
required to supply providers with fee schedules that relate to
the physician's practice.  The bill's mandates will
significantly increase the cost of providing health care
coverage and will limit the ability of employers to provide
employees with health care coverage.

Testifying against the bill were Missouri Association of Health
Plans; United Healthcare of the Midwest; Alliance Blue
Cross/Blue Shield; Healthlink, Inc.; Blue Cross/Blue Shield of
Kansas City; Associated Industries of Missouri; Aetna; and Randy
Scherr.

Katharine Barondeau, Legislative Analyst

HB 1932 -- Managed Care

Co-Sponsors:  Harlan, Gaw, Van Zandt, Holand, Leake, Pryor,
Monaco, Days, Griesheimer

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

(1)  Clarifies that Section 354.603, RSMo, does not require
providers to submit copies of their income tax returns to a
managed care entity.  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 managed
care entity;

(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;

(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.