 Industry
says Easley's patient's
bill of rights is bad but not terrible
Industry
groups reacted cautiously to the HMO reform legislation that
Gov.
Mike Easley unveiled Monday. Officials we spoke with said the
legislation contains some reforms they can live with and some
other provisions that might not be too bad if the bill's
language is tightened up. But everyone we talked to said the
governor's plan contains one glaring omission: the state
exempts itself from providing to the 500,000 state employees
the reforms the governor says are so crucial for working
families.
At a press conference at which he was flanked by legislations
who will sponsor the bill in the House and Senate, Easley said
the legislation demonstrates his commitment to expanding
patients’ rights and improving the health care of North
Carolina’s working families. "The doctor-patient
relationship must remain paramount," said Easley.
"Doctors must make medical decisions, not administrators
or bureaucrats. Patients are entitled to – and this
legislation will demand – that health insurance companies
are accountable to the consumers they serve."
That last reference was to the blockbuster provision in the
bill that says health plans can be sued by patients, which the
governor believes is the most important aspect of the bill and
which undoubtedly will produce the sharpest debate as the
measure moves through the legislature.
Easley introduced his plan during a press conference with
legislators who will sponsor the bill in the General Assembly
– Sens. Allan Wellons (D-Johnston), Bill Purcell
(D-Scotland) and Jim Forrester (R-Gaston) and Reps. Phil
Baddour (D-Wayne), Joe Hackney (D-Orange), Edd Nye (D-Bladen)
and Larry Justus (R-Henderson).
Those companion bills are S. 199 and H. 194
Managed Care Patients Bill of Rights, which
is summarized below.
"The time is now for managed care reform," said
Easley. "We can no longer wait for Washington to act.
When this measure is passed and signed into law, North
Carolina’s working families will have real managed care
reform. There is no question that when it comes to our
healthcare, we need better ‘care’ and less
‘management’."
Paul Mahoney, executive
director of the N.C. Association of Health Plans, said the
HMOs and insurance companies he represents "are
cautiously optimistic that legislators will be considering the
potential new costs of this legislation and will be looking at
ways to provide benefits to patients that will not cause big
increases in premiums. That being said," Mahoney added,
"a number of the issues they are addressing, if drafted
too broadly, have the potential to raise costs very
sharply."
The governor's staff met
privately with health-care industry leaders several times over
the past couple of weeks as they drafted the bill. Some of the
officials who attended those meetings said they were pleased
that the governor backed away from some proposals he had put
on the table that would have resulted in skyrocketing
increases in premiums. "Some of the things that we told
them would be major cost drivers are not in the bill, and
that's good," one official said.
"They
said to us there are some things they want to do for patients,
and we can go along with that," that official continued.
"We know there will be some (added) costs with those
things, and we’re willing to do some of that if it results
in improved care for patients and not just more
paperwork."
"When we looked at the
bill we thought it was not that bad," another industry
official said. "It is narrower than the Senate and House
bills" previously introduced.
The most
controversial aspect of the bill is the provision subjecting
health plans to civil liability. That part of the bill is
almost identical to S.
21 HMO Patient Protection, the measure introduced Jan.
30 by Sen. Wellons and co-sponsored by 20 others. That
measure
provides that an HMO is liable for damages caused by its
failure to exercise ordinary care in providing health care to
its patients. The bill also establishes an independent review
process allowing patients to appeal decisions by the HMO to
deny coverage as well as second-level grievance review
decisions.
HMO liability is a very complicated legal issue because
there are no clear precedents in the case law. The trial bar
strongly supports HMO liability, and the governor/s office has
said it is the most important part of the bill.
As written, the legislation would mainly impact small and
medium size businesses. The state exempts itself from the
reforms, and big companies that are self-insured through the
federal ERISA provisions are exempt from such state laws.
Mahoney said it was very unfair for the state to exempt
itself: "If the state
says we can’t afford this, how is Joe’s Tire Shop going to
afford it? There should be parity."
Summary
of major provisions of Gov. Easley's HMO reform legislation:
H.
194 and S. 199 MANAGED CARE PATIENTS' BILL OF
RIGHTS, to improve access to health
care advice, information, and services to covered persons
under health benefit plans; establish standards for health
plan disclosures to consumers; establish a managed care
ombudsman program; require coverage for clinical trials and
newborn hearing screening; provide standards for independent
review of noncertifications by an insurer or managed care
plan, and to hold managed care entities liable for harm caused
to insureds or enrollees by the failure to exercise ordinary
care in making treatment decisions."
Patient Access to
Medical Advice and Care Continuity of Care in HMOs. Adds
new GS 58-67-88, requiring HMOs to provide continuity of care
for patients who are terminally ill or are receiving care for
an ongoing special condition (defined as an acute illness
serious enough to require medical care to avoid death or
permanent harm; a chronic illness or condition that is
life-threatening, degenerative, or disabling and requires care
over a prolonged period; or pregnancy). When an HMO terminates
its contract with the patient’s health care provider, or the
benefits or coverage provided by the patient’s health care
provider are terminated because of a change in the terms of
the provider’s participation in the HMO, the HMO must (1)
notify patients with terminal illness or ongoing special
conditions, and (2) permit the patients to elect to continue
to be covered for care by the health care provider during a
transitional period. Provides for a standard transitional
period of up to 90 days, as determined by the health care
provider. Other transitional periods are provided for special
conditions: (1) an extended transitional period is available
for scheduled surgery, organ transplantation, or institutional
care; (2) the transitional period for pregnancy extends
through the provision of post-partum care; and (3) the
transitional period for terminal illness extends to the end of
the patient’s life with respect to care directly related to
the terminal illness. Permits HMOs to condition the continuing
care upon the provider’s willingness to accept reimbursement
at rates applicable before the transitional period, and to
adhere to the HMO’s quality assurance standards and to other
policies and procedures for participating providers. Requires
HMOs to notify enrollees of the right to continuity of care.
Extending
or Standing Referral to Specialist.
GS 58-3-223 requires insurers that do not allow direct access
to specialists to have policies and procedures permitting
insureds to receive extended or standing referrals to in-plan
specialists for serious or chronic degenerative, disabling, or
life-threatening conditions requiring on-going specialty care.
Bill amends the statute to require insurers to permit standing
referrals to specialists with subspecialty training in
pediatrics for children under the age of 18 with such
conditions, and to permit extended or standing referrals to
out-of-network specialists when in-plan specialists are not
available without unreasonable delay.
Selection
of Specialist as Primary Care Physician.
Adds new GS 58-3-230, requiring insurers to have policies and
procedures permitting an insured with a serious or chronic
degenerative, disabling, or life-threatening disease or
condition to select a specialist as the insured’s primary
care physician, if the insurer determines that the insured’s
care would most appropriately be coordinated by the
specialist. Requires insurer to permit the use of a specialist
that does not participate in the insurer’s plan if a
participating specialist is not available without unreasonable
delay.
Direct
Access to Pediatrician.
Adds new GS 58-3-240, requiring insurers that use networks of
contracting health care providers to permit insureds to choose
a contracting pediatrician as the primary care provider for
the insured’s children under the age of 18.
Access
to Prescription Drugs.
Amends GS 58-3-221 to require insurers that restrict access to
covered prescription drugs or devices to meet all the
requirements of that section (currently applies only to
insurers that maintain closed formularies). Defines
“restricted access drug or device” as a covered
prescription drug or device for which reimbursement is
conditioned in one of two ways: (1) the insurer approves the
prescription in advance, or (2) the health care provider
prescribes one or more alternative drugs or devices before
prescribing the drug or device in question.
Managed
Care Ombudsman Program.
Establishes Office of Managed Care Ombudsman and provides that
an ombudsman will be appointed by the Governor. Sets forth
duties and responsibilities for the ombudsman that are
substantially similar to those in H 36, introduced 2/1/01. H
36 placed the office in the Department of Insurance and
provided an appropriation for it. This bill does not specify
the administrative location of the office or provide an
appropriation; rather, it provides that administrative and
financial support for the office shall be provided from fees
collected by the Insurance Commission.
Health
Plan Disclosures Managed Care Reporting and Disclosure
Requirements.
Amends GS 58-3-191(b) to require health benefit plans to
disclose to plan participants and prospective participants the
plan’s closed formularies and restricted access drugs or
devices.
Provider
Directory Information.
Adds new GS 58-3-245, requiring health benefit plans that use
provider networks to make available to insureds a listing of
all network providers and to update the listing at least once
a year. Also requires plans to provide an electronic, on-line,
or telephonic system providing up-to-date information.
Disclosure
of Payment Obligations.
Adds new GS 58-3-250, requiring insurers that calculate
benefit amounts for covered services through a method other
than a fixed dollar amount co-payment to disclose to insureds
how they determine payment obligations.
Mandated
Benefits Clinical Trials.
Adds new GS 58-3-255, requiring health benefit plans to pay
for the medically necessary costs of insureds’ participation
in covered clinical trials. Defines “covered clinical
trials” as patient research studies designed to evaluate new
treatments, including prescription drugs, that (1) involve the
treatment of life-threatening medical conditions, (2) are
clearly superior to available noninvestigational treatment
alternatives, and (3) have clinical and preclinical data
demonstrating that the trial will be at least as effective as
noninvestigational alternatives. Sets forth additional
requirements for a study to qualify as a covered clinical
trial.
Newborn
Hearing Screening.
Adds new GS 58-3-260, requiring health benefit plans to pay
for newborn hearing screening ordered by the attending
physician pursuant to GS 130A-125. Part IV. External Review
and Managed Care Entity Liability Independent, External Review
Process. Identical to the external review provisions of S 21,
introduced 1/30/01.
Health Plan
Liability. Substantially identical to the liability
provisions of S 21, introduced 1/30
/01.
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