SS SCS HS HCS HB 335 -- MANAGED HEALTH CARE

This bill includes numerous provisions relating to the
regulation of health care organizations.  The bill:

HEALTH CARE ORGANIZATIONS ( INCLUDING HMOs)

(1)  Requires organizations delivering or financing health care
to forward to the Department of Health data regarding quality of
care, access to care, member satisfaction, and member health
status.  Failure to provide the required data is reported to the
Department of Insurance and the department may order a
forfeiture to the state of $100 for each willful violation.  The
Department of Health has the authority to specify the types of
data and the methods by which the data must be submitted;

(2)  Prohibits public disclosure of data obtained under the
bill's provisions.  However, the Department of Health may
prepare and disclose to the public reports and studies based on
the data;

(3)  Requires the Department of Health to publish an annual
consumer guide.  The department is required to allow health care
entities to comment on the report prior to publication and may
include the comments in the report;

(4)  Defines an emergency medical condition to include those
conditions that would lead a prudent layperson to believe that
immediate medical care is required;

(5)  Requires health maintenance organizations (HMOs), with
their applications for authority to do business in the state, to
demonstrate that enrollees have adequate access to health care
providers.  The director of the Department of Insurance may deny
that authority if the director is not satisfied that the HMO can
provide adequate access to health care providers;

(6)  Requires HMOs to include in their evidence of coverage a
toll-free customer service number and the consumer complaint
hotline of the Department of Insurance;

(7)  Prohibits HMOs and similar entities from restricting a
provider's discretion to inform enrollees of treatment options,
risks of treatment, or decisions of health plans to deny
services;

(8)  Requires HMOs to provide to enrollees and prospective
enrollees written disclosures that include explanations of
coverage exclusions, any prior authorization required for
covered services, utilization review policies, an enrollee's
responsibility for payment, grievance procedures, coverage for
emergency services, and procedures to obtain referrals to
providers outside of the HMO network when the HMO does not have
a provider with appropriate training to meet the needs of the
enrollee;

(9)  Requires HMOs, upon request of an enrollee, to provide
copies of annual financial statements, provide consumer
complaint information, disclose whether specific drugs are
covered, disclose if the HMO has any financial interest in a
pharmacy provider used by the HMO, provide descriptions of
quality assurance procedures, and provide specific clinical
review criteria for a particular condition;

(10)  Requires HMOs to disclose to the Department of Insurance
all financial arrangements that would limit the scope of offered
services, referrals, or treatment.  Capitation agreements
between HMOs and providers are not to be considered as such an
arrangement;

(11)  Permits the Department of Insurance to order a penalty not
to exceed $100 for each violation of Sections 354.400 to 354.636;

(12)  Allows the Department of Insurance to place restrictions
on any certificate of authority issued to an HMO;

(13)  Requires HMOs to establish procedures to ensure that the
mental health records of enrollees remain confidential.  The
procedures must be filed annually with the Department of
Insurance;

(14)  Prohibits HMOs from contracting with pharmacies that are
not licensed by the Missouri Board of Pharmacy.  HMOs must apply
the same copayment and deductible to all participating providers
if the provider meets the contract's product cost
determination.  HMOs may set a limit on the quantity of drugs an
enrollee may obtain at one time only if that limit is applied to
all pharmacy providers in the network;

(15)  Requires HMOs to have a sufficient number of providers so
that enrollees do not have to travel long distances or
experience unreasonable delays.  The Department of Insurance
determines whether an HMO meets sufficiency requirements;

(16)  Requires HMOs to file with the Department of Insurance
access plans for each managed care plan offered in the state;

(17)  Prohibits participating providers from charging any costs
for covered services other than coinsurance, deductibles, or
copayments specified in the HMO's evidence of coverage;

(18)  Prohibits participating providers from collecting from
enrollees any money that an HMO owes the provider;

(19)  Requires HMOs to establish and disclose to the Department
of Insurance their credentialing standards.  The Department of
Insurance is required to develop a standard credentialing form
which must be used by all health carriers with a managed care
plan.  HMOs are prohibited from using standards that
discriminate against providers treating high-risk populations;

(20)  Requires HMOs and providers to give each other 60 days
notice before terminating a contract.  The notice must specify
why the contract is being terminated.  HMOs are required to give
providers an opportunity to appeal the termination except in
cases involving fraud, imminent harm to patients, or
disciplinary action by a licensing board.  The procedures do not
apply to terminations at the end of a contract period.  HMOs are
prohibited from terminating a contract because a provider has
advocated on behalf of an enrollee, filed a complaint against
the HMO, appealed an HMO's decision, or filed a report with the
Department of Insurance;

(21)  Requires HMOs to regularly inform health care
professionals of any data used to evaluate the professional's
performance;

(22)  Requires an HMO to allow continued care with a provider
for 90 days if the provider is terminated and continued care is
medically necessary.  The HMO is obligated to reimburse the
provider at the same rate;

(23)  Requires HMOs to arrange a referral to a nonparticipating
provider at no additional cost to an enrollee when the HMO does
not have a provider within its network that can meet the health
care needs of an enrollee;

(24)  Requires HMOs to develop procedures to allow an enrollee
who needs ongoing care from a specialist to receive that care
without first obtaining a referral from a primary care physician
for each visit;

(25)  Requires HMOs to offer an open referral health plan
whenever HMOs market a gatekeeper group plan as the exclusive
offering to a group contract holder.  HMOs are also required to
allow female enrollees one visit per year for covered services
to an obstetrician/gynecologist without obtaining prior approval
from the primary care physician if the obstetrician/gynecologist
is a member of the HMO's network;

(26)  Requires insurance companies, health services
corporations, and HMOs to offer in all health insurance policies
mental health benefits as part of the policy or as a
supplement.  Insurers are required to cover 2 diagnostic visits
per year to a licensed psychiatrist, licensed psychologist,
licensed professional counselor or licensed clinical social
worker.  Insurers must also charge the same copayments and
deductibles for the visits as are charged for office visits for
any other illness;

(27)  Establishes a definition for a community-based health
maintenance organization which must be actively involved in
efforts to improve health status in the community and must
establish an advisory group of enrollees and representatives of
community interests in the service area.  The bill also sets
forth procedures that community-based HMOs must follow;

(28)  Sets limits on the rulemaking authority granted to state
agencies.  The rulemaking provisions are repealed by HB 600 &
388;

(29)  Adds health maintenance organization to the definition of
health care provider within Chapter 538 (Tort Actions Based on
Improper Health Care);

(30)  Removes language in Section 354.505 specifying that HMOs
are not deemed to be practicing medicine; and

(31)  Specifies that employers may select a provider for an
employee's work-related injury covered by Chapter 287.

UTILIZATION REVIEW

The bill also revises utilization review statutes.  In the
provisions relating to utilization review, the bill:

(1)  Broadly defines health carriers to include health
maintenance organizations and other health insurers;

(2)  Requires health carriers to document their utilization
review procedures and submit an annual report of those
procedures to the Department of Insurance;

(3)  Requires health carriers to allow enrollees to appeal for
coverage of pharmaceutical prescriptions and durable medical
equipment as part of the utilization review process;

(4)  Requires health benefit plans that provide coverage for
drugs to cover any prescribed drug, if the drug has been
approved by the FDA for at least one indication and is a
recognized treatment in one of the standard reference compendia
or in substantially accepted peer-reviewed medical literature
and deemed medically appropriate.  The bill also specifies that
the section is not to be construed to require coverage for a
drug when the FDA has determined its use to be contra-indicated
for the current indication;

(5)  Requires health carriers to follow procedures set forth in
the bill for initial determinations, concurrent review
determinations, retrospective review determinations, adverse
determinations, and reconsiderations.  The procedures include
requirements for notifying enrollees and providers of the
determinations.  Procedures are also established for standard
and expedited appeals processes;

(6)  Requires health carriers to cover emergency services
necessary to screen and stabilize an enrollee without prior
authorization, to deny post stabilization services within 60
minutes of a request for authorization, and to use the prudent
layperson definition of emergency;

(7)  Requires health carriers to maintain a register of all
grievances and to furnish the Department of Insurance, upon
request, with records regarding a grievance;

(8)  Requires managed care plans to establish a first and second
level review process for grievances and sets forth procedures
for each level of review.  The Department of Insurance is
authorized to handle appeals of the second level review panel's
decision.   The department's director is required to resolve the
appeal and may refer the case to an independent review
organization.  The department's decisions are subject to
judicial review; and

(9)  Exempts from the bill's utilization review provisions
health indemnity plans that do not have a managed care component.

HS HCS HB 335 -- MANAGED CARE (Harlan)

This substitute includes numerous provisions relating to the
regulation of health care organizations.

The substitute:

(1)  Requires organizations delivering or financing health care
to forward to the Department of Health data regarding quality of
care, access to care, member satisfaction, and member health
status.  Failure to provide the required data is reported to the
Department of Insurance and considered an unfair trade
practice.  The Department of Health has the authority to specify
the types of data and the methods by which the data must be
submitted;

(2)  Prohibits public disclosure of data obtained under the
bill's provisions.  However, the Department of Health may
prepare and disclose to the public reports and studies based on
the data;

(3)  Requires the Department of Health to publish an annual
consumer guide.  The department may allow health care entities
to comment on the report prior to publication and may include
the comments in the report;

(4)  Defines an emergency medical condition to include those
conditions that would lead a prudent layperson to believe that
unscheduled, immediate medical care is required;

(5)  Requires health maintenance organizations (HMOs), with
their applications for authority to do business in the state, to
demonstrate that enrollees have adequate access to health care
providers.  The director of the Department of Insurance may deny
that authority if the director is not satisfied that the HMO can
provide adequate access to health care providers;

(6)  Requires an HMO to include in its evidence of coverage a
toll-free customer service number and the Department of
Insurance's consumer complaint hotline;

(7)  Prohibits HMOs and similar entities from restricting a
provider's discretion to inform enrollees of treatment options,
risks of treatment, or decisions of health plans to deny
services;

(8)  Requires HMOs to provide to enrollees and prospective
enrollees written disclosures that include explanations of
coverage exclusions, any prior authorization required for
covered services, utilization review policies, an enrollee's
responsibility for payment, grievance procedures, coverage for
emergency services, procedures to obtain referrals to providers
outside of the HMO network when the HMO does not have a provider
with appropriate training to meet the needs of the enrollee, and
procedures for obtaining a specialist to coordinate an
enrollee's care when the enrollee has a disease requiring
specialized medical care over a prolonged period of time;

(9)  Requires HMOs, upon request of an enrollee, to provide
copies of annual financial statements, provide consumer
complaint information, disclose whether specific drugs are
covered, provide descriptions of quality assurance procedures,
and provide specific clinical review criteria for a particular
condition;

(10)  Requires HMOs to disclose to the Department of Insurance
all arrangements that would limit the scope of offered services,
referrals, or treatment;

(11)  Permits the Department of Insurance to order a penalty not
to exceed $100 for each violation of Chapter 354;

(12)  Allows the Department of Insurance to place restrictions
on any certificate of authority issued to an HMO;

(13)  Requires HMOs to establish procedures to ensure that the
mental health records of enrollees remain confidential.  The
procedures must be filed annually with the Department of
Insurance;

(14)  Prohibits HMOs from contracting with pharmacies that are
not licensed with the Missouri Board of Pharmacies or conferring
benefits on mail order pharmacies if those benefits are not
offered to other pharmacies in an HMO's network;

(15)  Requires HMOs to have a sufficient number of providers so
that enrollees do not have to travel long distances or
experience unreasonable delays.  The Department of Insurance
determines whether an HMO meets the bill's sufficiency
requirements;

(16)  Requires HMOs to file with the Department of Insurance
access plans for each managed care plan offered in the state;

(17)  Prohibits participating providers from charging any costs
for covered services other than coinsurance, deductibles, or
copayments specified in the HMO's evidence of coverage;

(18)  Prohibits participating providers from collecting from
enrollees any money that an HMO owes the provider;

(19)  Requires HMOs to establish and disclose to the Department
of Insurance their credentialing standards.  The Department of
Insurance is required to develop a standard credentialing form
which must be used by all health carriers with a managed care
plan.  HMOs are prohibited from using standards that
discriminate against providers treating high-risk populations;

(20)  Requires HMOs and providers to give each other 60 days
notice before terminating a contract.  The notice must specify
why the contract is being terminated.  HMOs are required to give
providers an opportunity to appeal the termination except in
cases involving fraud, imminent harm to patients, or
disciplinary action by a licensing board.  The procedures do not
apply to terminations at the end of a contract period.  HMOs are
prohibited from terminating a contract because a provider has
advocated on behalf of an enrollee, filed a complaint against
the HMO, appealed an HMO's decision, or filed a report with the
Department of Insurance;

(21)  Requires HMOs to regularly inform health care
professionals of any data used to evaluate the professional's
performance;

(22)  Requires an HMO to allow continued care with a provider
for 90 days if the provider leaves the HMO during a contract
period for a reason other than wrongdoing. This applies only if
the provider agrees to accept reimbursement at the same level;

(23)  Requires HMOs to arrange a referral to a nonparticipating
provider at no additional cost to an enrollee when the HMO does
not have a provider within its network that can meet the health
care needs of an enrollee;

(24)  Requires HMOs to develop procedures to allow an enrollee
who needs ongoing care from a specialist to receive that care
without first obtaining a referral from a primary care physician
for each visit;

(25)  Requires HMOs to offer covered persons a point of service
option that allows direct access to any health care provider in
the HMO's network.  HMOs are also required to allow female
enrollees one visit per year for covered services to an
obstetrician/gynecologist without obtaining prior approval from
the primary care physician if the obstetrician/gynecologist is a
member of the HMO's network;

(26)  Requires insurance companies, health services
corporations, and HMOs to offer as part of the policy or as a
supplement mental health benefits in all health insurance
policies.  Insurers are required to cover 2 diagnostic visits
per year to a licensed psychiatrist, licensed psychologist,
licensed professional counselor or licensed clinical social
worker.  Insurers must also charge the same copayments and
deductibles for mental health conditions as are charged for any
other illness;

(27)  Establishes a definition for a community-based health
maintenance organization which must be actively involved in
efforts to improve health status in the community and must
establish an advisory group of enrollees and representatives of
community interests in the service area.  The substitute also
sets forth procedures that community-based HMOs must follow;

(28)  Specifies that the definitions for health carrier and
utilization review organization do not include a property
casualty insurer or an employee working on behalf of a property
casualty insurer;

(29) Sets limits on the rulemaking authority granted by the
substitute;

(30)  Adds health maintenance organization to the definition of
health care provider within Chapter 538 (Tort Actions Based on
Improper Health Care); and

(31)  Requires health insurers and similar entities to cover an
enrollee's adopted child from the child's date of birth if the
petition for adoption is filed within 30 days of birth or from
the date of placement if the petition is filed after 30 days
from the date of birth.  Insurers and similar entities providing
coverage for maternity benefits are required to offer benefits
covering the delivery expenses of a birth mother when a child is
adopted by an enrollee within 90 days of the child's birth.

The bill also revises utilization review statutes.  In the
provisions relating to utilization review, the bill:

(1)  Broadly defines health carriers to include health
maintenance organizations and other health insurers;

(2)  Requires health carriers to document their utilization
review procedures and submit an annual report of those
procedures with the Department of Insurance;

(3)  Requires health carriers to allow enrollees to appeal for
coverage of pharmaceutical prescriptions and durable medical
equipment as part of the utilization review process;

(4)  Requires health benefit plans that provide coverage for
drugs to cover any prescribed drug, if the drug has been
approved by the FDA for at least one indication and is a
recognized treatment in one of the standard reference compendia
or in substantially accepted peer-reviewed medical literature
and deemed medically appropriate.  The substitute also specifies
that the section is not to be construed to require coverage for
a drug when the FDA has determined its use to be contra--
indicated for the current indication or to require payment for
non-formulary drugs;

(5)  Requires health carriers to follow procedures set forth in
the bill for initial determinations, concurrent review
determinations, retrospective review determinations, adverse
determinations, and reconsiderations.  The procedures include
requirements for notifying enrollees and providers of the
determinations.  Procedures are also established for standard
and expedited appeals processes;

(6)  Requires health carriers to cover emergency services
necessary to screen and stabilize an enrollee without prior
authorization, to deny certain services within 30 minutes, and
to use the prudent layperson definition of emergency;

(7)  Requires health carriers to maintain a register of all
grievances and to furnish the Department of Insurance, upon
request, with records regarding a grievance;

(8)  Requires health carriers to maintain a register of all
complaints filed by enrollees against any physician in the
network.  The carrier is required to forward quarterly a copy of
the register to the Board of Healing Arts;

(9)  Authorizes the Department of Insurance to handle appeals of
the second level review panel's decision.  The department's
director is required to resolve the appeal by referring the case
to a panel of professionals who have appropriate expertise.  The
department's decisions are subject to judicial review;.

(10)  Requires managed care plans to establish a first and
second level review process for grievances and sets forth
procedures for each level of review; and

(11)  Exempts from many of the substitute's utilization review,
grievance and appeals procedures health indemnity plans that do
not have a managed care component.

FISCAL NOTE:  Estimated Net Cost to All Funds of $639,166 to
$1,111,667 for FY 1998, $813,020 to $1,414,040 for FY 1999, and
$861,667 to $1,498,882 for FY 2000.  Estimated Net Cost to
General Revenue Fund is Unknown for FY 1998, FY 1999, and FY
2000. *Expected to exceed $10,000,000 annually.  Estimated Net
Cost to Conservation Fund of $149,980 for FY 1998, $187,200 for
FY 1999, and $194,832 for FY 2000.  Estimated Net Cost to
Insurance Dedicated Fund of $78,551 for FY 1998, $166,106 for FY
1999, and $173,424 for FY 2000.  Estimated Net Cost to Highway
Fund is Unknown for FY 1998, FY 1999, and FY 2000.

HCS HB 335 -- MANAGED CARE

SPONSOR:  Harlan

COMMITTEE ACTION - Voted "do pass" by the Committee on Critical
Issues by a vote of 16 to 6.

This substitute includes numerous provisions relating to the
regulation of health care organizations.

The substitute:

(1)  Requires organizations delivering or financing health care
to forward to the Department of Health data regarding quality of
care, access to care, member satisfaction, and member health
status.  Failure to provide the required data is reported to the
Department of Insurance and considered an unfair trade
practice.  The Department of Health has the authority to specify
the types of data and the methods by which the data must be
submitted;

(2)  Prohibits public disclosure of data obtained under the
bill's provisions.  However, the Department of Health may
prepare and disclose to the public reports and studies based on
the data;

(3)  Requires the Department of Health to publish an annual
consumer guide.  The department may allow health care entities
to comment on the report prior to publication and may include
the comments in the report;

(4)  Defines an emergency medical condition to include those
conditions that would lead a prudent layperson to believe that
unscheduled, immediate medical care is required;

(5)  Requires health maintenance organizations (HMOs), with
their applications for authority to do business in the state, to
demonstrate that enrollees have adequate access to health care
providers.  The director of the Department of Insurance may deny
that authority if the director is not satisfied that the HMO can
provide adequate access to health care providers;

(6) Requires an HMO to include in its evidence of coverage a
toll-free customer service number and the Department of
Insurance's consumer complaint hotline;

(7)  Prohibits HMOs and similar entities from restricting a
provider's discretion to inform enrollees of treatment options,
risks of treatment, or decisions of health plans to deny
services;

(8)  Requires HMOs to provide to enrollees and prospective
enrollees written disclosures that include explanations of
coverage exclusions, any prior authorization required for
covered services, utilization review policies, an enrollee's
responsibility for payment, grievance procedures, coverage for
emergency services, procedures to obtain referrals to providers
outside of the HMO network when the HMO does not have a provider
with appropriate training to meet the needs of the enrollee, and
procedures for obtaining a specialist to coordinate an
enrollee's care when the enrolled has a disease requiring
specialized medical care over a prolonged period of time;

(9) Requires HMOs, upon request of an enrollee, to provide
copies of annual financial statements, provide consumer
complaint information, disclose whether specific drugs are
covered, provide descriptions of quality assurance procedures,
and provide specific clinical review criteria for a particular
condition;

(10) Requires HMOs to disclose to the Department of Insurance
all arrangements that would limit the scope of offered services,
referrals, or treatment.  The department is required to approve
or disapprove the arrangements within 30 days;

(11)  Permits the Department of Insurance to order a penalty not
to exceed $100 for each violation of Chapter 354;

(12)  Allows the Department of Insurance to place restrictions
on any certificate of authority issued to an HMO;

(13)  Requires HMOs to establish procedures to ensure that the
mental health records of enrollees remain confidential.  The
procedures must be filed annually with the Department of
Insurance;

(14)  Prohibits HMOs from contracting with pharmacies that are
not licensed with the Missouri Board of Pharmacies or conferring
benefits on mail order pharmacies if those benefits are not
offered to other pharmacies in an HMO's network;

(15)  Requires HMOs to have a sufficient number of providers so
that enrollees do not have to travel long distances or
experience unreasonable delays.  The Department of Insurance
determines whether an HMO meets the bill's sufficiency
requirements;

(16) Requires HMOs to file with the Department of Insurance
access plans for each managed care plan offered in the state;

(17)  Prohibits participating providers from charging any costs
for covered services other than coinsurance, deductibles, or
copayments specified in the HMO's evidence of coverage;

(18)  Prohibits participating providers from collecting from
enrollees any money that an HMO owes the provider;

(19)  Requires HMOs to establish and disclose to the Department
of Insurance their credentialing standards.  HMOs are prohibited
from using standards that discriminate against providers
treating high-risk populations;

(20)  Requires HMOs and providers to give each other 60 days
notice before terminating a contract.  The notice must specify
why the contract is being terminated.  HMOs are required to give
providers an opportunity to appeal the termination except in
cases involving fraud, imminent harm to patients, or
disciplinary action by a licensing board.  The procedures do not
apply to terminations at the end of a contract period.  HMOs are
prohibited from terminating a contract because a provider has
advocated on behalf of an enrollee, filed a complaint against
the HMO, appealed an HMO's decision, or filed a report with the
Department of Insurance;

(21)  Requires HMOs to regularly inform health care
professionals of any data used to evaluate the professional's
performance;

(22)  Requires an HMO to allow continued care with a provider
for 90 days if the provider leaves the HMO during a contract
period for a reason other than wrongdoing. This applies only if
the provider agrees to accept reimbursement at the same level;

(23)  Requires HMOs to arrange a referral to a nonparticipating
provider at no additional cost to an enrollee when the HMO does
not have a provider within its network that can meet the health
care needs of an enrollee;

(24)  Requires HMOs to develop procedures to allow an enrollee
who needs ongoing care from a specialist to receive that care
without first obtaining a referral from a primary care physician
for each visit;

(25) Requires HMOs to allow enrollees 2 visits to a
participating eye care provider, dental care provider,
chiropractor, or dermatologist without first obtaining prior
approval from the enrollee's primary care physician; and

(26)  Requires insurance companies, health services
corporations, and HMOs to offer as part of the policy or as a
supplement mental health benefits in all health insurance
policies.  Insurers are required to cover 2 diagnostic visits
per year to a licensed psychiatrist, licensed psychologist,
licensed professional counselor or licensed clinical social
worker.  Insurers must also charge the same copayments and
deductibles for mental health conditions as are charged for any
other illness.

The bill also revises utilization review statutes.  In the
provisions relating to utilization review, the bill:

(1)  Broadly defines health carriers to include health
maintenance organizations and other health insurers;

(2)  Requires health carriers to document their utilization
review procedures and submit an annual report of those
procedures with the Department of Insurance;

(3)  Requires health carriers to allow enrollees to appeal for
coverage of pharmaceutical prescriptions and durable medical
equipment as part of the utilization review process;

(4)  Requires health benefit plans to cover any prescribed drug,
if the drug has been approved by the FDA for at least one
indication and is a recognized treatment in one of the standard
reference compendia or in substantially accepted peer-reviewed
medical literature;

(5)  Requires health carriers to follow procedures set forth in
the bill for initial determinations, concurrent review
determinations, retrospective review determinations, adverse
determinations, and reconsiderations.  The procedures include
requirements for notifying enrollees and providers of the
determinations.  Procedures are also established for standard
and expedited appeals processes;

(6)  Requires health carriers to cover emergency services
necessary to screen and stabilize an enrollee without prior
authorization, to provide access to utilization review
representatives 24 hours a day, to deny certain services within
30 minutes, and to use the prudent layperson definition of
emergency;

(7)  Requires health carriers to maintain a register of all
grievances received during a calendar year.  Carriers must file
grievance procedures with the Department of Insurance.  Managed
care plans must establish first and second level reviews of
grievances;

(8)  Requires health carriers to maintain a register of all
complaints filed by enrollees against any physician in the
network.  The carrier is required to forward quarterly a copy of
the register to the Board of Healing Arts; and

(8)  Authorizes the Department of Insurance to handle appeals of
the second level review panel's decision.  The department's
director has broad discretion to resolve the appeals by any
legal means.  The department's decisions are subject to judicial
review.

FISCAL NOTE:  Not available at time of printing.

PROPONENTS:  Supporters say that the bill will help eliminate
the confusion about managed care plans because it requires
managed care organizations to disclose more information and the
Department of Health to develop a consumer's guide explaining
plans.  The bill requires a prudent layperson definition of
emergency so that HMOs' coverage of emergency services will be
more consistent with a layperson's understanding of when
emergency services are necessary.  The bill eliminates gag
clauses so that consumers may be assured that physicians can be
totally honest about treatment options.  HMOs should cover more
mental health services and the bill's mental health provisions
are needed to accomplish that goal.

Testifying for the bill were Representatives Harlan, Bland,
Pryor, Reynolds; Hal Williamson; Sandra May; Jerry Kennett;
Missouri Association of Osteopathic Physicians & Surgeons;
Missouri Chapter of American College of Emergency Physicians;
Missouri Coalition for the Mentally Ill; Missouri State Board of
Healing Arts; Missouri State Chiropractic Association; Missouri
Pharmacy Association; Gateway Chapter of the Older Women's
League; Missouri Dermatological Society; League of Women Voters
of Missouri; Missouri Consumer Health Care Watch Coalition;
Missouri Counseling Association; Jennifer Clark; Missouri
Optometric Association; Missouri Association for Social Welfare;
American Association of Retired Persons; Boone County Medical
Society; Missouri Dental Association; Department of Mental
Health; Missouri Patient Care Review Foundation; Priscilla Kurz;
Missouri Psychological Association; Missouri Psychiatric
Association; and the Governor's Office.

OPPONENTS:  Those who oppose the bill say that the bill will add
to employers' health care costs through micro-management,
additional administrative costs, and too many professional
protections.  The bill's definition of emergency is too loose
and will increase costs.  The bill will create an adversarial
relationship between enrollees and their health plan.  The
market provides sufficient control of health plans for
consumers.  The bill's overly intrusive regulation will hinder
the market's ability to meet consumer needs.  The bill's
grievance and appeals procedures are too complicated and will be
costly and difficult to implement.

Testifying against the bill were Missouri Association of Health
Plans; Kaiser Permanente; General American Life Insurance Co.;
Missouri Hospital Association; Missouri Chamber of Commerce;
Payless Cashways; Chamber of Commerce of Greater Kansas City;
Associated Industries of Missouri; St. Louis Area Business
Health Coalition; Ford Motor Co.; and Charles Willey.

Katharine Hickel, Research Analyst

HB 335 -- Managed Care

Co-Sponsors:  Harlan, Foley, Bland, Greisheimer, Pryor

This bill includes numerous provisions relating to the
regulation of health care organizations.  The bill:

(1)  Requires organizations delivering or financing health care
to forward to the Department of Health data regarding quality of
care, access to care, member satisfaction, and member health
status.  Failure to provide the required data is reported to the
Department of Insurance and considered an unfair trade
practice.  The Department of Health has the authority to specify
the types of data and the methods by which the data must be
submitted;

(2)  Prohibits public disclosure of data obtained under the
bill's provisions.  However, the Department of Health may
prepare and disclose to the public reports and studies based on
the data.

(3)  Requires the Department of Health to publish an annual
consumer guide.  The department may allow health care entities
to comment on the report prior to publication and may include
the comments in the report;

(4)  Defines an emergency medical condition to include those
conditions that would lead a prudent layperson to believe that
unscheduled medical care is required;

(5)  Requires health maintenance organizations (HMOs), with
their applications for authority to do business in the state, to
demonstrate that enrollees have adequate access to health care
providers.  The director of the Department of Insurance may deny
that authority if the director is not satisfied that the HMO can
provide adequate access to health care providers;

(6) Requires an HMO to include in its evidence of coverage a
toll-free customer service number and the Department of
Insurance's consumer complaint hotline;

(7)  Prohibits HMOs and similar entities from restricting a
provider's discretion to inform enrollees of treatment options,
risks of treatment, or decisions of health plans to deny
services;

(8)  Requires HMOs to provide to enrollees and prospective
enrollees written disclosures that include explanations of
coverage exclusions, any prior authorization required for
covered services, utilization review policies, an enrollee's
responsibility for payment, grievance procedures, coverage for
emergency services, procedures to obtain referrals to providers
outside of the HMO network when the HMO does not have a provider
with appropriate training to meet the needs of the enrollee, and
procedures for obtaining a specialist to coordinate an
enrollee's care when the enrolled has a disease requiring
specialized medical care over a prolonged period of time;

(9) Requires HMOs, upon request of an enrollee, to provide
copies of annual financial statements, provide consumer
complaint information, disclose whether specific drugs are
covered, provide descriptions of quality assurance procedures,
and provide specific clinical review criteria for a particular
condition;

(10) Requires HMOs to disclose to the Department of Insurance
all arrangements that would limit the scope of offered services,
referrals, or treatment.  The department is required to approve
or disapprove the arrangements within 30 days;

(11)  Permits the Department of Insurance to order a penalty not
to exceed $100 for each violation of Chapter 354;

(12)  Allows the Department of Insurance to place restrictions
on any certificate of authority issued to an HMO;

(13)  Requires HMOs to establish procedures to ensure that the
mental health records of enrollees remain confidential.  The
procedures must be filed annually with the Department of
Insurance;

(14)  Prohibits HMOs from contracting with pharmacies that are
not licensed with the Missouri Board of Pharmacies or conferring
benefits on mail order pharmacies if those benefits are not
offered to other pharmacies in an HMO's network;

(15)  Requires HMOs to have a sufficient number of providers so
that enrollees do not have to travel long distances or
experience unreasonable delays.  The Department of Insurance
determines whether an HMO meets the bill's sufficiency
requirements;

(16) Requires HMOs to file with the Department of Insurance
access plans for each managed care plan offered in the state;

(17)  Prohibits participating providers from charging any costs
for covered services other than coinsurance, deductibles, or
copayments specified in the HMO's evidence of coverage;

(18)  Prohibits participating providers from collecting from
enrollees any money that an HMO owes the provider;

(19)  Requires HMOs to establish and disclose to the Department
of Insurance their credentialing standards.  HMOs are prohibited
from using standards that discriminate against providers
treating high-risk populations;

(20)  Requires HMOs and providers to give each other 60 days
notice before terminating a contract.  The notice must specify
why the contract is being terminated.  HMOs are required to give
providers an opportunity to appeal the termination except in
cases involving fraud, imminent harm to patients, or
disciplinary action by a licensing board.  The procedures do not
apply to terminations at the end of a contract period.  HMOs are
prohibited from terminating or refusing to renew a contract
because a provider has advocated on behalf of an enrollee, filed
a complaint against the HMO, appealed an HMO's decision, or
filed a report with the Department of Insurance;

(21)  Requires HMOs to regularly inform health care
professionals of any data used to evaluate the professional's
performance;

(22)  Requires an HMO to allow continued care with a provider
for 90 days if the provider leaves the HMO during a contract
period for a reason other than wrongdoing. This applies only if
the provider agrees to accept reimbursement at the same level;

(23)  Requires HMOs to arrange a referral to a nonparticipating
provider at no additional cost to an enrollee when the HMO does
not have a provider within its network that can meet the health
care needs of an enrollee;

(24)  Requires HMOs to develop procedures to allow an enrollee
who needs ongoing care from a specialist to receive that care
without first obtaining a referral from a primary care physician
for each visit;

(25) Requires HMOs to allow enrollees two visits to a
participating eye care provider, dental care provider, or
chiropractor without first obtaining prior approval from the
enrollee's primary care physician; and

(26)  Requires insurance companies, health services
corporations, and HMOs to offer as part of the policy or as a
supplement mental health benefits in all health insurance
policies.  Insurers are required to cover 2 diagnostic visits
per year to a licensed psychiatrist, licensed psychologist, or
licensed clinical social worker.  Insurers must also charge the
same copayments and deductibles for mental health conditions as
are charged for any other illness.

The bill also revises utilization review statutes.  In the
provisions relating to utilization review, the bill:

(1)  Broadly defines health carriers to include health
maintenance organizations and other health insurers;

(2)  Requires health carriers to document their utilization
review procedures and submit an annual report of those
procedures with the Department of Insurance;

(3)  Requires health carriers to allow enrollees to appeal for
coverage of pharmaceutical prescriptions and durable medical
equipment as part of the utilization review process;

(4)  Requires health benefit plans to cover any prescribed drug,
if the drug has been approved by the FDA for at least one
indication and is a recognized treatment in one of the standard
reference compendia or in substantially accepted peer-reviewed
medical literature;

(5)  Requires health carriers to follow procedures set forth in
the bill for initial determinations, concurrent review
determinations, retrospective review determinations, adverse
determinations, and reconsiderations.  The procedures include
requirements for notifying enrollees and providers of the
determinations.  Procedures are also established for standard
and expedited appeals processes;

(6)  Requires health carriers to cover emergency services
necessary to screen and stabilize an enrollee without prior
authorization, to provide access to utilization review
representatives 24 hours a day, to deny certain services within
30 minutes, and to use the prudent layperson definition of
emergency;

(7)  Requires health carriers to maintain a register of all
grievances received during a calendar year.  Carriers must file
grievance procedures with the Department of Insurance.  Managed
care plans must establish first and second level reviews of
grievances; and

(8)  Authorizes the Department of Insurance to handle appeals of
the second level review panel's decision.  The department's
director has broad discretion to resolve the appeals by any
legal means.  The department's decisions are subject to judicial
review.