This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0772 - Requires Fair Treatment by Health Care Plans
L.R. NO.  2995-01
BILL NO.  SB 772
SUBJECT:  Insurance-Medical, Health, Health Professionals
TYPE:     Original
DATE:     February 9, 1996

                              FISCAL SUMMARY

FUND AFFECTED              FY 1997             FY 1998           FY 1999
General Revenue                 $0        ($2,960,000)      ($5,920,000)

Dedicated                ($35,942)           ($36,630)         ($36,946)

Total Estimated
Net Effect on All
State Funds              ($35,942)        ($2,996,630)      ($5,956,946)


FUND AFFECTED              FY 1997             FY 1998           FY 1999

Total Estimated
Net Effect on All
Federal Funds                   $0                  $0                $0


FUND AFFECTED              FY 1997             FY 1998           FY 1999
Local Government                $0                  $0                $0

                              FISCAL ANALYSIS


The Department of Insurance(MDI) stated that there are no certification or
recertification fees included in this proposal.  They assume the expenditures
resulting from this proposal would be paid from the insurance dedicated fund.
There are approximately 244 insurers writing major and comprehensive medical
insurance policies for groups and individuals.  Of these, approximately 90
percent offer some form of a managed care meeting this proposal's definition.
In addition, there are approximately 25 health maintenance organizations
writing policies in this state.  The HMO's will write an average of three
variations of plans each.  Based upon these numbers, the MDI estimates 295
applications for certification.  The MDI also assumes an annual
recertification process since contractual arrangements between
insurers\hospitals\providers of care often change\terminate. The Department
would request two Insurance Product Analyst II to review applications for
certification of managed care plans for compliance to standards and criteria
set forth in the proposal and serve as liaisons between the MDI and managed
care entities, contractors, and health care providers and the public.  They
would also need one Clerk Typist III for clerical support for the two
professional positions including filing applications for
certification\recertification and typing correspondence to applicants and
qualified managed care plans.

Oversight assumes this proposal can be implemented with the addition of one
Insurance Product Analyst II.  Based on MDI estimates one analyst could
allocate at least five hours for each application.

Officials from the Missouri Consolidated Health Care Plan (HCP) reported this
proposal would require financial data currently confidential to be released
to enrollees and the public. The publication of this data would eliminate
competitive contracting. The estimated cost of the  administrative changes to
HCP is $5,920,000 annually.

Officials from the Department of Corrections (DOC), Department of
Conservation (MDC), Department of Public Safety (DPS), Department of Health
(DOH), Department of Social Services (DOS), Office of Administration (OA),
and the Department of Highway and Transportation (DHT),  stated that passage
of this legislation would have no fiscal impact on their agency.

FISCAL IMPACT-State Government    FY 1997        FY 1998      FY 1999
                              (10 Months)


Cost - Consolidated Health Care Plan

Increased Health Plan Cost             $0   ($2,960,000) ($5,920,000)

Estimated Net Effect on General
Revenue Fund                           $0   ($2,960,000) ($5,920,000)


Cost - Department of Insurance

Personal Services               ($21,280)      ($26,174)    ($26,289)

Fringe Benefits                  ($6,541)       ($8,046)     ($8,247)

Expense and Equipment            ($8,121)       ($2,410)     ($2,410)

Total Cost to Department        ($35,942)      ($36,630)    ($36,946)

Estimated Net Effect on Insurance
Dedicated Fund                  ($35,942)      ($36,630)    ($36,946)

FISCAL IMPACT  - Local Government FY 1997        FY 1998      FY 1999
                                 (10 Mo.)
                                       $0             $0             $0


This act requires the certification of all managed health care plans
operating in Missouri by  January 1, 1998.  The  Department of Insurance
shall make the certifications, and the following requirements are to be
certified: (1) Prospective enrollees shall be provided with information on
coverage, authorization procedures, financial arrangements, participating
providers and other topics; (2) Screening for emergencies shall be covered;
(3) 90 days notice is required to drop health providers; (4) Financial
incentives may not be used to limit medically necessary services; (5) Primary
care physician selection is regulated; (6) Providers must be given reasons
for denial  or termination from any network, and they shall have a right to a
review;  (7) Plans may refuse admission if they have enough providers;  (8)
Referrals out of a network shall be allowed if covered services are not
otherwise available;  (9) Employers may cancel if material changes are made
in the plan;  (10) Plans must pass savings on to enrollees; (11) Plans may
not retaliate because of complaints; and (12) Plans must give providers input
into medical policy. Standards shall be set up by the Department of Insurance
within one year, and all entities shall be certified by January 1, 1998.

This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental


Department of Insurance
Department of Corrections
Department of Conservation
Department of Public Safety
Department of Health
Department of Social Services
Office of Administration
Department of Highway and Transportation
Consolidated Health Care Plan