SCS/HS/HCS/HB 335 - 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) - Section 192.068 - permits the Department of Health access to the quality indicator data collected by managed care organizations for the Department of Insurance (DOI). The data collected shall be based upon the national standards established by the National Committee for Quality Assurance (NCQA) and the Employer Data and Information Set (HEDIS) or an equivalent data set created by the Missouri Department of Health. The data pertain to the quality of care, access to care, member satisfaction and member health status. Failure to provide such data shall be reported to the Director of the Department of Insurance and shall constitute a violation of the Unfair Trade Practices Act.

The Department of Health shall consult other state agencies and interested parties responsible for delivering, financing and purchasing health care in the state. The Department shall also publish an annual consumer guide, based upon the information obtained.

Section (2) - Sections 354.400 - 354.535 - contain changes to the current managed care organization statutes. The changes are as follows:

(a) Defines Emergency Medical Condition and Emergency Services. The definitions are a combination of language in HS/HCS/HB 335 and SCS/SB 223;

(b) Defines Community based Health Maintenance Organizations and limits their enrollees to 50,000 or less;

(c) The health care organization must prove to the Director that it can provide its enrollees with adequate access to health care providers;

(d) Section 354.441 is added and bans the use of "gag clauses" in managed care contracts;

(e) Section 354.442 outlines the information to be disclosed to consumers upon enrollment and upon request;

(f) Section 354.443 requires managed care organizations to disclose to the DOI all financial arrangements that would limit the type of services that patients could receive;

(g) Section 354.444 provides DOI the authority to order a forfeiture to the state of Missouri a sum not to exceed $100 for each willful violation of Sections 354.400 to 354.636;

(h) Section 354.470 provides DOI the authority to place restrictions or conditions on the certificate of authority of a managed care organization. Currently, the Director can only revoke a certificate;

(i) Section 354.515 directs managed care organizations to establish procedures to ensure that the health records, including mental health records, of enrollees remain confidential. Such procedures must be filed annually with the DOI; and

(j) Section 354.535 prohibits managed care organizations from contracting with a pharmacy, pharmacy distributor or wholesale drug distributor unless such pharmacy or distributor has been granted a permit or license from the Missouri Board of Pharmacy. Every health maintenance organization shall apply the same coinsurance, copayment and deductible factors to all drug prescriptions filled by a pharmacy provider who participates in the health maintenance organization's network. A health maintenance organization shall not set a limit on the quantity of drugs which a covered person may obtain at any one time with a prescription.

Section (3) - Sections 354.600 - 354.636 - expands the current managed care statutes in Chapter 354, RSMo. 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 these sections are the following:

(a) Defines emergency medical condition and emergency medical services. The definitions are a combination of language in HS/HCS/HB 335 and SCS/SB 223;

(b) Managed care organizations must maintain a network that is sufficient in numbers and types of providers to assure that all services to covered persons will be accessible without unreasonable delay; (Section 354.603)

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

(Section 354.606)

(d) Managed care organizations shall establish a mechanism by which providers will be notified on an ongoing basis of the specific covered health services for which the provider will be responsible; (Section 354.606)

(e) Managed care organizations must disclose their credentialing standards to DOI and shall not discriminate against providers that treat high-risk populations; (Section 354.606)

(f) Health carriers shall develop selection standards for participating primary care professionals and each participating health care professional specialty; (Section 354.606)

(g) Health carriers prohibited from offering an inducement under the health care plan to a provider to provide less than medically necessary services; (Section 354.606)

(h) Health carriers shall not discriminate payment to health care providers by virtue of the degree of the provider; (Section 354.606)

(i) 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; (Section 354.609)

(j) 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; (Section 354.612)

(k) 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; (Section 354.615)

(l) 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; (Section 354.615)

(m) Managed care organizations are required to develop procedures whereby an enrollee may exercise an in-network point of service option to pay a higher coinsurance, copayment or deductible and be allowed to obtain covered services directly from any health care provider without receiving a primary care provider's referral. If an employer offers more than 1 plan and one of those plans is a non-gatekeeper plan they are exempt from this section; (Section 354.618)

(n) Health Carriers are prohibited from discriminating between eye care providers when selecting among providers of health services for membership in the network and when referring enrollees for health services; (Section 354.618)

(o) A health carrier is not required to pay for health care services not provided for in the terms of the health benefit plan; (Section 354.618)

(p) Intermediaries and participating providers with whom they contract shall also comply with applicable requirements of the managed care statutes; (Section 354.621)

(q) A health carrier shall file with the Director all contract forms, including compensation terms, proposed for use with its participating providers and intermediaries. (Section 354.624)

Section (4) - Sections 374.500 - 374.510 and Sections 376.1350 - 376.1390 - revises the current utilization review statutes contained in Chapter 374, RSMo, and includes the NAIC model legislation on utilization review (UR) and grievance procedures. 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; (Section 376.1359)

(b) Health carriers must permit enrollees to appeal the inclusion of durable medical equipment and pharmaceutical drugs as part of the UR process; (Section 376.1361)

(c) Health carriers must cover drugs that have been approved by the FDA for at least one indication if the drug is indicated in standard reference compendia or in substantially accepted peer-review medical literature; (Section 376.1361)

(d) 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; (Section 376.1363)

(e) 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;

(Section 376.1367)

(f) Health carriers must keep a grievance register of all written grievances and provide the Department of Insurance, upon request, with records regarding a grievance; (Section 376.1375)

(g) 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; (Section 376.1382)

(h) Director of Insurance to refer any 3rd level adverse determination grievances to a panel of health care professionals who are appointed or contracted by the Director; The decision of the panel shall be binding; and

Section (5) - Section 376.381 - 376.811 - Mental Health Benefits. These sections require 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 act also allows the Director of the Department of Insurance to establish up to two pilot project to assess the effect of using modified community rating in underwriting health insurance and of equalizing coverage of mental health diagnosis and treatment services to be equal with coverage for medical procedures.

The act allows Missouri licensed health maintenance organizations to offer point of service riders to their approved health plan products without being required to obtain a separate license.

CHERYL GRAZIER