Fiscal Note - SB 0144 - Clarifies Health Maintenance Organizations' Responsibility For Coverage of Emergency Care
L.R. NO. 0583-01
BILL NO. SB 144
SUBJECT: Health Care; Hospitals; Insurance-Medical; Department of Insurance
TYPE: Original
DATE: February 7, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
All funds ($1,133,333) ($1,360,000) ($1,441,600)
Insurance
Dedicated $0 to $1,650 $0 $0
Total Estimated
Net Effect on All ($1,131,683 to
State Funds $1,133,333) ($1,360,000) ($1,441,600)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government ($420,000) ($504,000) ($534,240)
FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Health, the Department of Transportation,
the Department of Public Safety - Missouri State Highway Patrol, the
Department of Economic Development, the Department of Social Services, and
the Department of Conservation assume this proposal would not fiscally impact
their agencies.
The Department of Insurance (INS) states that approximately 33 HMOs have
contracts filed with INS. Each insurer may submit contractual amendment to
comply with the requirements of this proposal. The result would be a range
of zero to 33 new contract amendments needed to comply with this proposal.
Filings are to be accompanied with a $50 filing fee. Based on the estimated
range of new contract amendment filings, $0 to $1,650 in new revenue would be
generated for the Insurance Dedicated Fund in the first fiscal year only.
INS further states that the passage of more than one similar proposal could
require the INS to request increased appropriations to cover cumulative
administrative costs.
Officials from the Missouri Consolidated Health Care Plan (HCP) state the
proposal permits enrollees to make their own determination of an emergency
and then obligates the insurer to pay for services rendered by emergency
personnel. HCP further states that recent studies of managed care
organizations find that higher costs are incurred when patients are allowed
to "self-refer" to emergency facilities. These costs come from the
presentation of non-urgent conditions at emergency rooms and from the
provision of care for conditions not related to the presenting reason. HCP
states that non-emergency care provided in the emergency room was estimated
by a recent panel of actuaries in a study by the Barents Group, LLC of KPMG
Peat Marwick LLP, to increase premiums by one to three percent. HCP assumes
for purposes of this fiscal note that the impact would be two percent of
premiums. HCP estimates it's FY98 HMO costs to be $88.2 million. Employee
contributions reduce this amount by $20 million. HCP assumes the first full
year fiscal impact to be $1.36 million.
Department of Social Services (DOS) officials state this proposal would
affect the MC+ managed care program because MC+ involves health maintenance
organizations. One requirement of this proposal is not currently required by
DOS in its MC+ contracts. The requirement in this proposal that prior
authorization for medically necessary services arising from emergency room
screening exams would not be deemed to be approved unless the request for
authorization is denied within thirty minutes would have an impact because
there currently is no time requirement for MC+ contractors in this situation.
DOS states that the MC+ contracts may be modified at any time when
modifications are mandated by changes in Federal and State laws. DOS assumes
the Office of Administration - Division of Purchasing and Materials
Management would give notice to the plans of this new State mandate. DOS
recognizes that there may be a cost to the plans for this requirement if they
are not currently staffed to handle prior authorization requests within the
time period required in this proposal. DOS assumes no additional costs at
this time. Increased administrative requirements placed on health plans may
at some point result in additional administrative cost to the MC+ plans.
However, DOS does not believe they are at that level yet.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
ALL FUNDS
Cost - State Government
Increased state contribution ($1,133,333) ($1,360,000) ($1,441,600)
ESTIMATED NET EFFECT ON
ALL FUNDS ($1,133,333) ($1,360,000) ($1,441,600)
INSURANCE DEDICATED FUND
Income - Department of Insurance
Filings fees $0 to $1,650 $0 $0
ESTIMATED NET EFFECT ON
INSURANCE DEDICATED FUND $0 TO $1,650 $0 $0
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
LOCAL GOVERNMENT FUNDS
Cost - Local Governments
Increased contributions ($420,000) ($504,000) ($534,240)
ESTIMATED NET EFFECT ON
LOCAL GOVERNMENT FUNDS ($420,000) ($504,000) ($534,240)
FISCAL IMPACT - Small Business
Small businesses would be expected to be fiscally impacted to the extent that
they would incur increased insurance premiums and additional administrative
costs due to the requirements of this proposal.
DESCRIPTION
This proposal would define medical emergencies and emergency medical
services. A medical emergency would be any situation which could result in
serious impairment, from the perspective and knowledge of a prudent
layperson. A health maintenance organization (HMO) would allow 24 hour
emergency care without preauthorization. Necessary emergency care would be
approved within 30 minutes or it is deemed to be approved. When there is a
disagreement between an attending physician and the HMO as to care, and the
patient remains unstable, the HMO would assume any financial responsibility.
If a primary care physician or the HMO has authorized an evaluation or
treatment, the HMO cannot subsequently deny the evaluation or treatment.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Department of Health
Department of Social Services
Department of Transportation
Department of Public Safety
Missouri State Highway Patrol
Department of Conservation
Missouri Consolidated Health Care Plan
Department of Insurance
Department of Economic Development
This Fiscal Note is not an official copy and should not be quoted or cited.