Relating to health insurance.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI,

AS FOLLOWS:

Section 1. 1. Sections 1 through 7 of this act shall be known and may be cited as the "Patient Fairness Act".

2. As used in this act, the following terms mean:

(1) "Director", the director of the department of insurance;

(2) "Health care provider", includes, but is not limited to a physician, hospital, dentist, laboratory, pharmacy, pharmacist, podiatrist, psychologist, chiropractor, optometrist, nurse, hospice or home health agency or other appropriately state licensed or state recognized provider of health care services or supplies;

(3) "Managed care contractor", a person who:

(a) Establishes, operates or maintains a network of participating providers; and

(b) Contracts with an insurance company, a hospital or medical service plan, an employer, an employee organization, or any other entity providing coverage for health care services to operate a managed care plan;

(4) "Managed care entity", a licensed insurance company, hospital or medical service plan, health maintenance organization, an employer or employee organization, provider groups or a managed care contractor that operates a managed care plan;

(5) "Managed care plan", a plan operated by a managed care entity that provides for the financing and delivery of health care services to persons enrolled in such plan through:

(a) Arrangements with selected providers to furnish health care services;

(b) Explicit standards for the selection of participating providers; and

(c) Financial incentives for persons enrolled in the plan to use the participating providers and procedures provided for by the plan;

(6) "Participating provider", any health care provider that has entered into an agreement with a managed care entity to provide such services or supplies to a patient enrolled in a managed care plan;

(7) "Qualified managed care plan", a managed care plan that the director certifies, upon application by the program, as meeting the requirements of this act.

Section 2. Nothing in this act shall be construed as prohibiting the following:

(1) An individual from purchasing any health care services with that individual's own funds, whether such services are covered within the individual's benefit package or from another health care provider or plan;

(2) Employers from providing coverage for benefits in addition to the managed care plan's benefit package.

Section 3. 1. The director shall establish a process for certification of managed care plans meeting the requirements of this section. The director shall establish procedures for the periodic review and recertification of qualified managed care plans. The director shall terminate or suspend the certification of a previously qualified managed care plan if the director determines that such plan no longer meets the applicable requirements for certification. Before effecting a termination or suspension, the director shall provide the plan notice and opportunity for a hearing on the proposed termination.

2. An eligible organization, as defined in section 1876(b) of the Social Security Act, shall be deemed to meet the requirements of subsection 4 of this section for certification as a qualified managed care plan.

3. If the director finds that a national accreditation body establishes requirements for accreditation of a managed care plan that are at least equivalent to requirements established under subsection 4 of this section, the director may, to the extent appropriate, treat a managed care plan thus accredited as meeting the requirements of subsection 4 of this section.

4. The director shall establish standards for the certification of qualified managed care plans that conduct business in this state, including standards whereby:

(1) Prospective enrollees in managed care plans must be provided information as to the terms and conditions of the plan so that they can make informed decisions about accepting a certain system of health care delivery. Where the plan is described orally to enrollees, easily understood, truthful, and objective terms shall be used. All written plan descriptions shall be in a readable and understandable format, consistent with standards developed for supplemental insurance coverage under Title XVIII of the Social Security Act. This format shall be standardized so that customers can compare the attributes of the plans. Specific items that shall be included are:

(a) Coverage provisions, including amount, duration, and scope of coverage, benefits, and any exclusions of health care services by category of service, health care provider, and if applicable, by specific service;

(b) Any and all prior authorization or other review requirements including but not limited to preauthorization review, post-service review, post-payment review and any procedures that may lead the patient to be denied coverage for a restriction or limitation placed on the access to and delivery of a particular service;

(c) Financial arrangements or contractual provisions with review companies or any other health care provider that would limit the type or amount, duration and scope of services offered, restrict or limit referral or treatment options, or negatively affect the health care provider's fiduciary responsibility to patients, including but not limited to financial incentives to limit, restrict or deny access to or delivery of medical or other services;

(d) An explanation of how plan limitations or restrictions impact enrollees, including information on enrollee financial responsibility for payment for coinsurance or other non-covered or out-of-plan services;

(e) Loss ratios;

(f) Enrollee satisfaction statistics, including re-enrollment statistics, reasons for leaving the plan, and the number of complaints filed against the plan; and

(g) An explanation of the internal complaint resolution process maintained by the plan as required by section 354.445, RSMo, and information on accessing and utilizing the customer quality assurance process maintained by the state.

(2) Plans shall demonstrate that they have adequate access to health care providers so that all covered health care services will be provided in a timely fashion. Plans shall permit the enrollee to select the participating provider of his choice to serve as their primary care provider. This requirement cannot be waived and shall be met in all areas where the plan has enrollees, including rural areas;

(3) Plans shall meet financial reserve requirements that are established to assure proper payment for covered services provided;

(4) All plans shall be required to establish a mechanism, with defined rights, under which participating providers provide input into the plan's health care policy, including coverage of new technology and procedures, utilization review criteria and procedures, quality and credentialing criteria, and health care management procedures;

(5) All plans shall be required to credential health care providers to deliver those health services offered by the plan, and the plan shall not discriminate against any class of health care provider on the basis of licensure. In credentialing health care providers, the plan shall allow all providers within the plan's geographical service area, whose scope of licensure authorizes the delivery of such covered services, to apply for such credentials. However, nothing in this act shall require a plan to accept any health care provider as a participating provider in the plan. The credentialing process shall begin upon application of a health care provider to the plan for inclusion. Each application shall be reviewed by a credentialing committee with appropriate representation of the applicant's specialty. Credentialing shall be based on objective standards of quality established with input from health care providers credentialed in the plan, and such standards shall be made available to applicants and enrollees. When economic considerations are part of the decision, objective criteria shall be used and shall be made available to applicants, participating providers and enrollees. Any economic profiling of health care providers shall be adjusted to recognize case mix, severity of illness, age of patients and other features of a health care provider's practice that may account for higher than or lower than expected costs. Profiles shall be made available to those so profiled. When graduate medical education is a consideration in credentialing, equal recognition shall be given to training programs accredited by the Accrediting Council of Graduate Medical Education and by the American Osteopathic Association. Plans shall not discriminate against enrollees because of an enrollee's health or medical condition. Plans shall also be prohibited from discriminating against health care providers whose practices contain a substantial number of such patients. All decisions shall be made on the record, and the health care provider shall be provided with all reasons used, if an application is denied or the contract not renewed. A plan's decision to deny an application shall not be subject to the appeals process set out in this act. Plans shall not be allowed to include clauses in provider contracts that allow for the plan to terminate the contract without cause.

5. There shall be a due process appeal from all decisions to terminate or not renew a contract. The director shall establish a due process appeal mechanism based on the appeals process set forth in the Health Care Quality Improvement Act of 1986, 42 U.S.C. 11101 to 11152.

6. The same standards and procedures used for an application for credentials shall also be used in the cases where the plan seeks to reduce or withdraw such credentials. Prior to initiation of a proceeding leading to a termination of a contract for cause, the health care provider shall be provided notice, an opportunity for discussion, and an opportunity to enter into and complete a corrective action plan, except in cases where there is imminent harm to patient health or an action by a state licensing board or other government agency that effectively impairs the health care provider's ability to practice his or her profession within the jurisdiction.

7. An enrollee or participating provider who has been aggrieved by any decision of a managed care entity shall, upon request, be provided a written statement of the reasons for the decision.

8. (1) The director shall establish a consumer quality assurance process to resolve complaints filed by enrollees and participating providers. The department may contract with an independent review entity for the purpose of complying with this section. The consumer quality assurance process shall, at a minimum, provide for the timely review of complaints relating to:

(a) A managed care entity decision regarding the medical necessity or therapeutic value of any procedure, treatment or service;

(b) A managed care entity decision to deny or discontinue enrollment of an enrollee;

(c) A claim of inadequate access to health care services or providers;

(d) A claim of failure to provide covered services in the amount, duration or scope appropriate for the enrollee's condition.

The review and decision related to all complaints shall be completed within fifteen days from the date the complaint is received.

(2) The director may impose a fine against the managed care entity of not more than one thousand dollars per day per violation of the decision rendered by the consumer quality assurance process, in addition to any other discipline or sanction which may be imposable by law, with the revenue generated through fines to be placed in the Consumer Quality Assurance Process Fund and to be disbursed for the costs of administering this complaint process.

(3) The enrollee and participating provider shall be provided written notice of their right to utilize the consumer quality assurance process at the time of enrollment, annually thereafter and at the time of notification of any denial, limitation, reduction or termination of coverage for a service.

(4) Managed care entities are prohibited from retaliating against enrollees, health care providers or employers on the basis of complaints filed pursuant to this section.

(5) The director shall set the amount of all fees authorized and required by this act and the provisions of sections 354.400 to 354.550, RSMo, by rule and regulation. The director may assess a fee upon all qualified managed care entities at the time of certification and annually thereafter. All such fees shall be set at a level designed to produce revenue which shall not substantially exceed the cost and expense of administering the provisions of this act and sections 354.400 to 354.550, RSMo.

9. Procedures shall be established to ensure that all federal and state laws designed to protect the confidentiality of provider and individual medical records are followed.

10. Standards shall first be established under this section not later than twelve months after the effective date of this section. In developing standards under this section, the director shall:

(1) Review standards in use by national private accreditation organizations and the National Association of Insurance Commissioners;

(2) Recognize, to the extent appropriate, differences in the organizational structure and operation of managed care plans; and

(3) Establish procedures for the timely consideration of applications for certification by managed care plans.

11. The director shall periodically review the standards established under this section, and may revise the standards from time to time to assure that such standards continue to reflect appropriate policies and practices for the cost-effective and medically appropriate use of services within managed care plans.

12. Nothing in this act shall be deemed to create a cause of action by any party, nor shall this act restrict any cause of action or defense to any cause of action pursuant to any other provision of law.

Section 4. No rule or portion of a rule promulgated under the authority of this act shall become effective unless it has been promulgated pursuant to the provisions of section 536.024, RSMo.

Section 5. 1. Any managed care entity that offers a plan that restricts access to providers or controls utilization shall offer to all eligible enrollees the opportunity to obtain from the plan coverage for out-of-network services through a point of service option, as defined by subsection 2 of this section, at the time of enrollment and at least for a continuous one-month period annually thereafter.

2. For the purposes of this act, a point of service option means a plan that provides additional coverage and/or access to non-network providers to an eligible enrollee when the plan restricts access to items and services provided by a health care provider who is not a member of the plan's provider network, or that may cover any other services the enrollee seeks, whether such covered services are provided in or outside of the enrollee's plan.

3. For the purposes of this section, a provider network means those providers who have entered into a contract or agreement with the plan under which such providers are obligated to provide services to eligible individuals enrolled in the plan, or have an agreement to provide services on a fee-for-service basis.

4. A plan may charge an enrollee who opts to obtain point of service coverage an alternative premium that reflects no more than the actuarial value of such coverage.

5. A point of service option may require payment of coinsurance for an out-of-network item or service with the applicable coinsurance percentage to be based on the plan's actual payment for items or services and not to be greater than twenty percent.

Section 6. All managed care entities shall be in compliance with the provisions of this act by January 1, 1998.

Section 7. Nothing in this act shall be construed as an "any willing provider provision", meaning an act that requires any managed care plan to accept the application of any provider willing to abide by the terms and conditions of that plan's contract.