To amend chapter 376, RSMo, by adding four new sections relating to managed health care plans.

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

AS FOLLOWS:

Section A. Chapter 376, RSMo, is amended by adding thereto four new sections to be known as sections 376.1270, 376.1275, 376.1279 and 376.1280, to read as follows:

376.1270. As used in sections 376.1270 to 376.1280, the following terms mean:

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

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

(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" or "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 sections 376.1270 to 376.1280.

376.1275. Nothing in sections 376.1270 to 376.1280 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.

365.1279. 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 action.

2. 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 3 of this section, the director may, to the extent appropriate, treat a managed care plan thus accredited as meeting the requirements of subsection 3 of this section.

3. 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 shall 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 preauthorization review, concurrent review, post-service review, post-payment review and any procedures that may lead the patient to be denied coverage for or not be provided a particular service;

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

(d) A list of the names, locations and specialties of the participating providers and the financial arrangements between the managed care plan and the providers;

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

(f) Loss ratios;

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

(h) Explanation of the internal complaint resolution process maintained by the plan as required by section 354.445, RSMo; and

(i) Explanation that participating providers have agreed not to seek additional payment from patients for performing covered services if that is the agreement;

(2) All plans shall pay for any screening to determine if an enrollee has a medical emergency for any necessary emergency care, including treatment and stabilization, whether or not the emergency care is provided by a participating provider. In the case of a preferred provider plan, reimbursement must be at the preferred provider level if the patient cannot reasonably reach a preferred provider and until he or she can reasonably be expected to transfer to a preferred provider;

(3) All plans must give at least ninety days of notice to enrollees before dropping any participating provider from its provider network. If such notice is not provided, the managed care plan must continue to pay the provider at no less than the contract or preferred provider rate for ninety days after the termination if the provider is willing to continue treating the patient;

(4) No plan may use any financial incentive to induce participating providers to limit medically necessary services, and no plan may require providers to pay for damages caused by the managed care plan;

(5) All plans requiring primary care physicians must have application forms which allow an applicant to choose a primary care physician. If an enrollee does not select a primary care physician upon joining, the plan may assign him or her to a primary care physician in the ZIP code nearest to the residence or place of employment of the enrollee. Assignment must result as far as possible in fair and equal distribution of patients among providers on the network. Patients shall have the right to change primary care physicians, although the plan may limit such changes to four in a one-year period;

(6) All plans must make application information available upon request to any provider who seeks admission to the network. Any plan refusing or terminating a provider must give a written explanation to the provider. A refused or terminated physician has the right to a review by an advisory panel including at least one person from his or her specialty if one is available;

(7) Any plan may refuse admission upon the basis that it already has enough providers;

(8) All plans shall allow referrals for the use of non-network providers when covered services are not available from network providers. If a plan opposes such a referral, there must be a review by a provider of the same or similar specialty as the one to which the referral is requested;

(9) All plans must give employers and others who contract with the plan the right to unilaterally cancel their managed care contract if the plan makes a material change affecting the benefits or services provided;

(10) All plans must pass savings through to patients from fee discounts negotiated between physicians and insurance companies;

(11) Plans may not retaliate against enrollees, employers or health care providers because of complaints or appeals on behalf of a patient; and

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

4. 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.

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

(1) Review standards in use by other states, 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.

6. 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.

7. Nothing in this act shall be deemed to give rise to a cause of action by any party.

8. 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.

376.1280. All managed care entities shall be certified and in compliance with the provisions of sections 376.1270 to 376.1280 by January 1, 1998.