SB 223 - This act revises statutes concerning managed care organizations. The act is divided into five sections, each pertaining to a specific aspect of managed care.

Section (1) permits the Department of Health access to the quality indicator data collected by managed care organizations for the Department of Insurance. The data collected are based upon the national standards established by the National Committee for Quality Assurance (NCQA) and the Missouri Health Indicator Set (MoHIS) created by the Missouri Department of Health. The data pertain to the quality of care, access to care, member satisfaction and member health status.

Section (2) contains changes to the current managed care organization statutes, sections 354.400 to 354.550 RSMo. The changes are as follows:

(a) The Department of Insurance (DOI) is required to approve the evidence of coverage and other supporting documents managed care organizations file within thirty days of the filing. Currently, managed care organizations are able to file these documents and use them without prior approval;

(b) This section also contains provisions to outlaw the use of "gag clauses" in managed care contracts;

(c) The changes spell out the what is to be disclosed to consumers upon enrollment and upon request;

(d) This section requires managed care organizations to disclose to DOI all financial arrangements that would limit the type of services that patients could receive;

(e) DOI is given authority to place restrictions or conditions on the certificate of authority of a managed care organization. Currently, the Director can only revoke a certificate;

(f) Managed care organizations are directed to establish procedures to ensure that the mental health records of enrollees remain confidential. Such procedures must be filed annually with the DOI; and

(g) Managed care organizations are prohibited from contracting with pharmacies that are not licensed with the Missouri Board of Pharmacy or from conferring benefits upon mail order pharmacies that are not offered to other pharmacies in the organization's network.

Section (3) expands the current managed care statutes in Chapter 354. This section is based upon the National Association of Insurance Commissioners (NAIC) Network Adequacy Model. The network adequacy model is designed to give the Department of Insurance the authority to ensure that managed care organizations have a sufficient number of hospitals, pharmacies, physicians and other health care providers in their network so that consumers do not have to travel long distances or wait excessively to receive health care services. Among the provisions in this section are the following:

(a) Managed care organizations and health care providers they contract with are prohibited from billing consumers for costs outside of coinsurance, deductibles or copayments;

(b) Managed care organizations must disclose their credentialing standards to DOI and they are prohibited from having standards that discriminate against providers that treat high-risk populations;

(c) Managed care organizations and providers must provide sixty days notice before terminating a contract. The notice shall include an explanation of why the contract is being terminated. Providers must be given an opportunity to appeal the decision unless doing so would involve harm to consumers, cases of fraud or disciplinary action from a state licensing board. This section does not apply to nonrenewal of contracts or termination at the end of a contract period;

(d) If an enrollee's provider leaves during a contract period for any reason not involving fraud or wrongdoing, the managed care organization must allow the enrollee to continue with that provider for a period of 90 days, or in the case of a second trimester pregnancy until the baby is delivered, if the provider agrees to accept the reimbursement at the same level;

(e) If a managed care organization determines that it does not have appropriate expertise in its network to provide covered benefits to an enrollee, the managed care organization must find an appropriate provider outside its network at no greater cost to the enrollee that would otherwise be incurred;

(f) Managed care organizations are required to develop procedures whereby an enrollee who needs to receive ongoing care from a specialist can receive such care directly without first obtaining approval from the enrollee's primary care provider for each visit; and

(g) Managed care organizations are required to develop procedures whereby an enrollee can make two annual visits to a

participating eye care provider, a dental care provider or a chiropractor at least twice without first obtaining prior approval from the enrollee's primary care provider. A health carrier may require a referral from the primary care physician, if such covered person requires more than two annual visits with an eye care provider, a dental care provider or a chiropractor.

Section (4) revises the current utilization review statutes contained in Chapter 374 and includes the NAIC model legislation on utilization review (UR) and grievance procedures. All utilization review agents certified before September 1, 1997 shall comply with the provisions of this act by July 1, 1998. This model language contains the following:

(a) Health carriers, broadly defined to include other health insurers as well as managed care organizations, must document their UR procedures with DOI;

(b) Health carriers must permit enrollees to appeal the inclusion of durable medical equipment and pharmaceutical drugs as part of the UR process;

(c) Health carriers must cover drugs that have been approved by the FDA for at least one indication if the drug is indicated in a standard reference compendia or in substantially accepted peer-review medical literature;

(d) Health carriers must allow enrollees, their appointed representative or their providers to appeal decisions to cover health care services;

(e) Health carriers must follow the procedures established in the act for review determinations. These provisions outline the procedures for an initial determination, a reconsideration, an adverse determination, a retrospective determination and a concurrent determination. There is also a procedure for an expedited determination and an appeal;

(f) Health carriers must follow certain procedures for emergency services, including not requiring preauthorization for emergency services, the prudent lay person definition of emergency, twenty-four hour access and automatic approval of screening services in not granted in 30 minutes;

(g) Health carriers must keep a grievance register of all written grievances;

(h) Health carriers must allow grievances to have two levels of appeal. Grievances concerning an adverse determination must be heard by a panel with a majority of clinical peers with appropriate medical expertise; and

(i) The DOI is given authority to contract with an appropriate medical board to make the final decision on any grievance appealed to the Director's office.

Section (5) concerns mental health parity. This section revises Sections 376.381 and 376.811 so that all insurers shall provide coverage for two diagnostic visits per year to a licensed psychiatrist, licensed psychologist, or licensed clinical social worker. This section also requires insurers to apply the same coinsurance, copayment and deductible factors for mental health as is charged for physical health.

CHERYL GRAZIER