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Protection in Managed Care Plans: A Side-by-Side Comparison of Proposal Federal Legislation – Report

Side-By-Side Comparison Of Proposed Federal Legislation For Consumer Protection In Managed Care Plans

Nicole Tapay, Karen Pollitz, Jalena Curtis

Institute for Health Care Research and Policy Georgetown University Medical Center

July 18, 1997

Issue Summary

Over the past decade, an increasing number of Americans have been receiving their health care coverage through HMOs, PPOs and other types of managed care entities. The growing influence of managed care, in turn, has led consumers and state and federal policy makers to raise questions about the appropriate roles and rights of consumers, providers, employers, purchasers, and insurers within this system. Areas of concern include: 1) whether plans provide sufficient access and choice for consumers; 2) what is the appropriate method to enable consumers to appeal plan decisions; and 3) what rights consumers have with respect to information about their health plans.

Most states have basic protections in place regulating HMOs and managed care plans that are subject to state law. In addition, there has been a surge of recent state legislative activity in this area which has augmented the sophistication and specificity of some of these laws. At the federal level, Medicare currently imposes certain requirements upon managed care plans contracting with the program. Federal standards for Medicaid managed care have been somewhat more general; as states move toward requiring managed care enrollment, federal legislation has been proposed to strengthen protections for Medicaid beneficiaries. Also at the federal level, ERISA, which governs self-funded employer plans, contains minimal requirements for such plans and virtually no protections specifically targeted at the managed care components of such plans.

In the 105th Congress, several bills of varying scope have been introduced to address an array of concerns relating to consumer and provider protections in health plans. In addition, Congressional Budget Reconciliation Bills suggest several changes in this area for Medicare and Medicaid. This document is a side-by-side comparison of many of the leading federal bills in these areas. It begins with the following brief description of the bills contained in the side-by-side comparison tables. The Medicare and Medicaid provisions of the House and Senate Budget Reconciliation Bills (House and Senate Budget Bills) are presented in Part I. The eight remaining bills discussed below, introduced in the House and/or Senate, are presented by topic in Part II.

Please note: This document includes certain acronyms; many of these are defined in the “Definitions” section at the end of the document.

H.R. 2015–House Budget Bill/Provisions Relating To Medicare Managed Care

The House Budget Bill would establish a new Medicare managed care program, MedicarePlus. Plan options include a variety of coordinated care plans. Importantly, this option does not preclude Medicare eligibles from choosing the traditional fee-for-service Medicare program. The House Budget Bill includes requirements relating to information disclosure, gag rules, grievance procedures, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, provider protection, solvency standards for provider-sponsored organizations, and enforcement issues.

The House Budget Bill requires plans to disclose specified information to federal authorities and enrollees. It also includes a grievance/appeals system with internal and external mechanisms, including time limits and reviewer requirements for all grievances and appeals. Time frames are established for prior authorization determinations. Minimum requirements are established for internal quality assurance. The House Budget Bill requires plans to provide access to providers in service area within a reasonable time frame and to cover appropriate specialist treatment.

The House Budget Bill sets forth a process for provider-sponsored organizations (PSOs) to receive federal waivers from state laws that fall within specified categories. Solvency standards for PSOs will be set at the federal level. The House Budget Bill also sets forth open enrollment and information requirements to facilitate beneficiary choice and mobility among Medicare options.

Status: Passed by the House on June 25, 1997, and awaiting action by reconciliation conference committee. The House Budget Bill incorporates two separate proposals for Medicare, as passed by the committees of jurisdiction (Commerce and Ways and Means) with some slight variations.

S. 947–Senate Budget Bill/Provisions Relating To Medicare Managed Care

The Senate Budget Bill would establish a new Medicare managed care program, Medicare Choice. In general, the Senate Budget Bill is very similar to the House Budget Bill, with differences highlighted within the attached side-by-side chart. Plan options include a variety of coordinated care plans; Medicare eligibles can still choose the traditional fee-for-service program. The Senate Budget Bill includes requirements relating to information disclosure, gag rules, grievance procedures, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, provider protection, solvency standards for provider-sponsored organizations, and enforcement issues.

The Senate Budget Bill requires plans to disclose specified information to federal authorities and enrollees. It also includes a grievance/appeals system with internal and external mechanisms, including time limits for all grievances and appeals and limited reviewer requirements. Time frames are established for prior authorization determinations. Minimum requirements are established for internal quality assurance. The Senate Budget Bill requires plans to provide access to providers in their service areas within a reasonable time frame and to cover appropriate specialist treatment.

The Senate Budget Bill sets forth a process for provider-sponsored organizations (PSOs) to receive waivers from state laws. Solvency standards for PSOs will be set at the federal level. The Senate Budget Bill also sets forth open enrollment and information requirements to facilitate beneficiary choice and mobility among Medicare options.

Status: Passed by the Senate on June 26, 1997, and awaiting action by reconciliation conference committee.

H.R. 2015–House Budget Bill/Provisions Relating To Medicaid Managed Care

The House Budget Bill incorporates selected consumer protection standards for Medicaid managed care enrollees. The House Budget Bill includes requirements relating to gag rules, grievance procedures, quality assurance, access to care, access to specialists, emergency services, and continuity of care. It requires plans to permit female enrollees access, without prior authorization, to obstetricians/gynecologists for routine care and to designate such physicians as their primary care providers. It requires plans to establish internal grievance procedures that meet federal standards, including timeliness of considerations. It requires plans to follow quality standards. The House Budget Bill also prohibits restrictions on medical communications between providers and patients.

Status: Passed by the House on June 25, 1997, and awaiting action by reconciliation conference committee.

S. 947–Senate Budget Bill/Provisions Relating To Medicaid Managed Care

The Senate Budget Bill sets forth protections for Medicaid beneficiaries enrolled in managed care plans. The Senate Budget Bill includes requirements relating to information disclosure, grievance procedures, quality assurance, utilization review, access to care, access to specialists, emergency services, protections relating to covered benefits, discrimination, continuity of care, and enforcement issues. It permits states to mandate enrollment in a managed care plan as a condition of receiving Medicaid coverage. Beneficiaries generally must be given a choice of at least two plans, though states may waive this rule in rural areas under certain circumstances. States may not mandate managed care enrollment for certain, more vulnerable Medicaid beneficiaries. The Senate Budget Bill establishes standards relating to information disclosure, access to care, access to specialists, and access to emergency services. It requires plans to establish grievance procedures, sets a general requirement of timeliness for prior authorization systems, and provides for quality assurance standards. It prohibits balance billing by plan contractors and subcontractors. It establishes standards for financial soundness of Medicaid managed care plans, and authorizes the Secretary to apply new sanctions against plans that do not comply with the Senate Budget Bill's requirements.

Status: Passed by the Senate on June 26, 1997, and awaiting action by reconciliation conference committee.

S. 644–D'Amato/
H.R. 1415–Norwood

This bill establishes consumer protection standards for managed care plans, both insured and self-insured. Standards address information disclosure, gag rules, grievance procedures, utilization review, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, experimental therapies, provider protection, discrimination, minimum solvency, and enforcement issues. The bill requires plans to disclose specified information to enrollees, prospective enrollees, health professionals, and providers. Time limits and restrictions on reviewer qualifications are established for internal review of grievances and appeals; time limits are also specified for UR prior authorization determinations. The bill mandates internal quality improvement programs with specified components. Enrollees must have access to specialized treatment when necessary, and must receive continued coverage when provider changes could disrupt continuity of care. Plans must offer point-of-service options with fair and reasonable premiums. Emergency services must be covered and must be accessible at all times. States may impose more stringent requirements than those specified in the bill.

Status: Hearings were held in the Committee on Labor and Human Resources in May 1997. No committee or legislative actions have been taken; provisions similar to portions of this bill have been incorporated into the House and Senate Budget Bills. The House companion bill to S. 644 is H.R. 1415 (Norwood).

S. 373–Kennedy/ H.R. 820–Dingell

This bill sets forth consumer protection standards for managed care plans, both insured and self-insured. Standards address information disclosure, gag rules, grievance procedures, utilization review, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, experimental therapies, provider protection, and enforcement issues. The bill requires plans to disclose specified information, updated monthly, to state authorities, enrollees, and the public. The bill also outlines a grievance/appeals system with internal and external mechanisms, including time limits and reviewer requirements for all grievances/appeals. Time frames are also established for UR prior authorization determinations. Minimum requirements for internal quality assurance are established, including a minimum uniform data set to be specified by the Secretary. The bill requires plans to cover treatment by specialists, and requires continuity of care for specified periods after providers are no longer participating. If emergency services are covered benefits, standards are set forth for coverage without prior authorization and without regard to whether the provider is participating. To assist consumers with coverage choice, filing complaints, and to investigate instances of poor treatment of enrollees, the bill requires the establishment of state health insurance Ombudsmen. States are permitted to impose more stringent requirements on plans than those outlined in the bill.

Status: Hearings on the subject of health care quality in commercial and public plans have been held by the Senate Labor and Human Resources Committee and the Senate Finance committee. No hearings have yet been held on this particular bill, nor has committee or legislative action been taken. A similar bill to S. 373 has been introduced in the House, H.R. 820 (Dingell). Unlike S. 373, H.R. 820 does not amend ERISA.

S. 346–Wellstone

This bill sets forth consumer protection standards for managed care plans, both insured and self-insured. Standards address information disclosure, gag rules, grievance procedures, utilization review, access to care, access to specialists, emergency services, privacy, provider protection, discrimination, minimum solvency, and enforcement issues. The bill requires plans to disclose specified information in standardized form to prospective covered individuals and UR information to state officials. The bill also establishes guidelines for internal, external/independent, and expedited reviews of grievances, which are to be further developed through federal regulation. Requirements for mandatory UR programs are described, and additional standards are to be developed for certification of UR programs. The bill sets forth standards for provider credentialing, and requires states to develop uniform credentialing requirements. “Meaningful” access to specialist treatment is required, and enrollees with chronic conditions must receive ongoing direct access to specialists as appropriate. Emergency services must be covered and must be accessible at all times. States are to establish Offices for Consumer Information, Counseling and Assistance with Health Care to educate and assist consumers with health insurance issues. States may pass laws with equal effect or stricter requirements than those in the bill.

Status: Hearings on the subject of health care quality in commercial and public plans have been held by the Senate Labor and Human Resources Committee and the Senate Finance committee. No hearings have yet been held on this particular bill, nor has committee or legislative action been taken.

S. 864–Chafee/Breaux

This bill sets forth protections for Medicaid beneficiaries enrolled in managed care plans. The bill permits states to mandate enrollment in a managed care plan as a condition of receiving Medicaid coverage. Beneficiaries generally must be given a choice of at least two plans, though states may waive this rule in rural areas under certain circumstances. States may not mandate managed care enrollment for certain, more vulnerable Medicaid beneficiaries. The bill establishes standards relating to information disclosure, access to care, access to specialists, and access to emergency services. It establishes specific standards for access to care provided by Ob-Gyns for women and care by specialists for patient with chronic conditions. The bill requires plans to establish grievance procedures, sets a general requirement of timeliness for prior authorization systems, and provides for external review of enrollee grievances and of quality assurance standards. It prohibits balance billing and restrictions on medical communications between providers and patients. It establishes standards for financial soundness of Medicaid managed care plans, and authorizes the Secretary to apply new sanctions against plans that do not comply with the bill's requirements.

Status: Some portions of this bill appear in the Senate Budget Bill, and others appear in the House Budget Bill.

H.R. 586–Ganske

This bill establishes consumer protection standards in the area of medical communications for group and individual insurers, including group health plans. Standards address gag rules and enforcement issues. Although a similar bill, S. 449 (Kyl/Wyden), is not included as a separate bill in the side-by-side, the description of H.R. 586 highlights the main difference between H.R. 586 and S. 449. Both S. 449 and H.R. 586 prohibit plan restrictions on medical communications and establish monetary penalties for violation of this rule. In addition, H.R. 586 provides that while plans may not restrict such communications, entities operating plans may place limitations on services offered based on religious or moral convictions. S. 449 includes a somewhat different “conscience clause.”

Status: During the 104th Congress, hearings on this bill were held by the Health Subcommittee of the House Committee on Ways and Means. In addition, the Health and Environment Subcommittee of the House Commerce Committee also held a hearing which focused on the issue of gag rules in managed care plans and whether legislation was necessary to address the issue. In July 1996, the full Commerce Committee met in open markup session and ordered the bill reported to the House, as amended, by a voice vote. No further action was taken. During the 105th Congress, portions of this bill have been incorporated within the House Budget Reconciliation Bill. See above.

H.R. 815–Cardin

This bill establishes consumer protection standards in limited areas for group and individual insurers, group health plans, Medicare (HMOs and competitive medical plans), Medicaid, and Medicare Select plans. Standards address emergency services, information disclosure, and enforcement issues. The bill sets forth standards for coverage of emergency services without prior authorization and without regard to whether providers are participating. Time limits are established for authorization of post-stabilization care. States may establish standards relating to emergency services to the extent they do not prevent the application of requirements in the bill.

Status: No legislative or committee action. Similar provisions are incorporated within the House and Senate Budget Bills, as well as within S. 644, S. 373, and S. 346.

H.R.135–DeLauro

This bill establishes consumer protection standards in limited areas for group and individual insurers, including group health plans. Standards address protections relating to covered benefits, provider protection, and discrimination as they relate to treatment of breast cancer. The bill establishes minimum length of stay requirements for mastectomies and lymph node dissections for treatment of breast cancer if these services are covered benefits. In addition, the bill prohibits financial incentives to providers and enrollees for purposes of avoiding these requirements; however, doctors in conjunction with patients may decide upon shorter lengths of stay. States may pass laws requiring at least the same length of stay or requiring that length of stay decisions be left to doctors in consultation with patients.

Status: No legislative or committee action.

S. 795–Jeffords/
Lieberman

This bill establishes consumer protection standards for federal health plan contractors, including the Federal Employees Health Benefits Program, Medicare, Medicaid, TRICARE, and Veterans Affairs. Standards developed pursuant to the bill address information disclosure, grievance procedures, quality assurance, and enforcement. The bill requires plans to disclose specified information in standardized form to prospective enrollees. The bill also establishes a Federal Health Plan Quality Council to evaluate plans, direct government participation in regional health care accountability initiatives, and advise the President and Congress on consumer protection and quality of participants' health care. The Council must establish criteria for mandatory certification of plans by licensed certification entities, with minimum criteria requirements specified in the bill. The Council will pay plans to reward them for meeting or exceeding quality targets; to fund this program, all plans must allocate annual payments to the Council.

Status: Hearings on the subject of health care quality in commercial and public plans have been held by the Senate Labor and Human Resources Committee and the Senate Finance committee. No hearings have yet been held on this particular bill, nor has committee or legislative action been taken.

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Side-By-Side Comparison Of Proposed Federal Legislation For Consumer Protection In Managed Care Plans:

Side-By-Side Part One Part Two Part Three Part Four