[Congressional Record Volume 142, Number 136 (Friday, September 27, 1996)]
[Extensions of Remarks]
[Pages E1751-E1752]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            THE MANAGED CARE CONSUMER PROTECTION ACT OF 1996

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                      Thursday, September 26, 1996

  Mr. STARK. Mr. Speaker, I am pleased to introduce the Managed Care 
Consumer Protection Act of 1996, a bill that will provide critically 
needed consumer protections to millions of Americans in managed care 
health plans.
  Health care consumers who entrust their lives to managed care plans 
have consistently found that many plans are more interested in profit 
than in providing appropriate care. My constituent mail has been full 
of horror stories explaining the abuses that occur at the hands of 
HMO's and other forms of managed care.
  For example, David Ching of Fremont, CA had a positive experience in 
a Kaiser Permanente plan and then joined an employer sponsored HMO 
expecting similar service. He soon learned that some plans would rather 
let patients die than authorize appropriate treatment. His wife 
developed colon cancer, but went undiagnosed for 3 months after the 
first symptoms. Her physician refused to make the appropriate 
specialist referral because of financial incentives and could not 
discuss proper treatment because of the health plan's policy. Mrs. 
Ching is now dead.
  In a similar case, Jennifer Pruitt of Oakland wrote to me about her 
father who also had cancer. He went to his gatekeeper primary care 
physician numerous times with pain in his jaw. The doctor, who later 
admitted that she had never treated a cancer patient, refused to refer 
Mr. Pruitt to a specialist. Eventually, after months of pain, a dentist 
sent Mr. Pruitt to a specialist outside of the HMO network. The cancer 
was finally diagnosed, but it had spread too rapidly during the months 
that the health plan delayed. Mr. Pruitt died from a cancer that is 
very treatable if detected early.
  These tragedies and others like them might have been avoided if the 
patients had known about the financial incentives not to treat, or if 
the physicians had not been gagged from discussing treatment options, 
or if there had been legislation forcing health plans to provide timely 
grievance procedures and timely access to care. It's too late for these 
victims, but it is not too late to provide these protections for the 
millions of people in managed care today.
  A few years ago, Congress recognized a crisis in the health care 
industry. Expenditures were soaring and overutilization was the rule. 
At that time, I chose to address this problem with laws that prohibited 
physicians from making unnecessary referrals to health organizations or 
services that they owned.
  Others responded by pushing Americans into new managed care plans 
that switched the financial incentives from a system that overserves to 
a system that underserves. They got what they asked for. The current 
system rewards the most irresponsible plans with huge profits, 
outrageous executive salaries, and a license to escape accountability. 
Unfortunately, patients are dying unnecessarily in the wake of this 
health care delivery revolution. It must stop.
  Several States have already addressed the managed care crisis. In 
1996, more than 1,000 pieces of managed care legislation flooded State 
legislatures. As a result, HMO regulations were passed in 33 States 
addressing issues like coverage of emergency services, utilization 
review, post-delivery care and information disclosure. Unfortunately, 
many States did not pass these needed safeguards resulting in a 
piecemeal web of protections that lacks continuity. The states have 
spoken; now it's time for Federal legislation to finish the job and 
provide consumer protections to all Americans.
  The bill I offer today is a revision of an earlier bill, H.R. 1707, 
the Medicare Consumer Protection Act of 1995. This legislation includes 
a comprehensive set of protections that will force managed care plans 
to be accountable to all of their patients and to provide the standard 
of care they deserve.
  In the U.S. Congress, we have the power to put an end to abuse in 
managed care and guarantee that Americans who choose managed care get 
the care for which they pay. It is irresponsible to do anything less.
  Following is a summary of the consumer protections provided for in 
this bill.

              Managed Care Consumer Protection Act of 1996


                                summary

                  I. Managed Care Enrollee Protections


                         A. Utilization Review

       1. Any utilization review program that attempts to regulate 
     coverage or payment for services must first be accredited by 
     the Secretary of Health and Human Services or an independent, 
     non-profit accreditation entity;
       2. Plans would be required to provide enrollees and 
     physicians with a written description of utilization review 
     policies, clinical review criteria, information sources, and 
     the process used to review medical services under the 
     program;
       3. Organizations must periodically review utilization 
     review policies to guarantees consistency and compliance with 
     current medical standards and protocols;
       4. Individuals performing utilization review could not 
     receive financial compensation based upon the number of 
     certification denials made;
       5. Negative determinations about the medical necessity or 
     appropriateness of services or the site of services would be 
     required to be made by clinically-qualified personnel of the 
     same branch of medicine or specialty as the recommending 
     physician;


                         B. Assurance of Access

       1. Plans must have a sufficient number, distribution and 
     variety of qualified health care providers to ensure that all 
     enrollees may receive all covered services, including 
     specialty services, on a timely basis (even in rural areas);
       2. Patients with chronic health conditions must be provided 
     with a continuity of care and access to appropriate 
     specialists;
       3. Plans would be prohibited from requiring enrollees to 
     obtain a physician referral for obstetric and gynecological 
     services.
       4. Plans would demonstrate that enrollees with chronic 
     diseases or who otherwise require specialized services would 
     have access to designated Centers of Excellence;


                  C. Access to Emergency Care Services

       1. Plans would be required to cover emergency services 
     provided by designated trauma centers;
       2. Plans could not require pre-authorization for emergency 
     medical care;
       3. A definition of emergency medical condition based upon a 
     prudent layperson definition would be established to protect 
     enrollees from retrospective denials of legitimate claims for 
     payment for out-or-plan services;

[[Page E1752]]

       4. Plans could not deny any claim for an enrollee using the 
     ``911'' system to summon emergency care.


                D. Due Process Protections for Providers

       1. Descriptive information regarding the plan standards for 
     contracting with participating providers would be required to 
     be disclosed;
       2. Notification of a participating provider of a decision 
     to terminate or not to renew a contract would be required to 
     include reasons for termination or non-renewal. Such 
     notification would be required not later than 45 days before 
     the decision would take effect, unless the failure to 
     terminate the contract would adversely affect the health or 
     safety of a patient;
       3. Plans would have to provide a mechanism for appeals to 
     review termination or non-renewal decisions.


 E. Grievance procedures and deadlines for responding to requests for 
                          coverage of services

       1. Plans would have to establish written procedures for 
     responding to complaints and grievances in a timely manner;
       2. Patients will have a right to a review by a grievance 
     panel and a second review by an independent panel in cases 
     where the plan decision negatively impacts their health 
     services;
       3. Plans must have expedited processes for review in 
     emergency cases.


          F. Non-discrimination and service area requirements

       1. In general, the service area of a plan serving an urban 
     area would be an entire Metropolitan Statistical Area (MSA). 
     This requirement could be waived only if the plans' proposed 
     service area boundaries do not result in favorable risk 
     selection.
       2. The Secretary could require some plans to contract with 
     Federally-qualified health centers (FQHCs), rural health 
     clinics, migrant health centers, or other essential community 
     providers located in the service area if the Secretary 
     determined that such contracts are needed in order to provide 
     reasonable access to enrollees throughout the service area.
       3. Plans could not discriminate in any activity (including 
     enrollment) against an individual on the basis of race, 
     national origin, gender, language, socioeconomic status, age, 
     disability, health status, or anticipated need for health 
     services.


                   G. Disclosure of plan information

       1. Plans would provide to both prospective and current 
     enrollees information concerning:
       Credentials of health service providers
       Coverage provisions and benefits including premiums, 
     deductibles, and copayments
       Loss ratios explaining the percentage of premiums spent on 
     health services
       Prior authorization requirements and other service review 
     procedures
       Covered individual satisfaction statistics
       Advance directives and organ donation information
       Descriptions of financial arrangements and contractual 
     provisions with hospitals, utilization review organizations, 
     physicians, or any other health care service providers
       Quality indicators including immunization rates and health 
     outcomes statistics adjusted for case mix
       An explanation of the appeals process
       Salaries and other compensation of key executives in the 
     organization
       Physician ownership and investment structure of the plan
       A description of lawsuits filed against the organization
       2. Information would be disclosed in a standardized format 
     specified by the Secretary so that enrollees could compare 
     the attributes of all plans within a coverage area.


           H. Protection of physician--patient communications

       1. Plans could not use any contractual agreements, written 
     statements, or oral communication to prohibit, restrict or 
     interfere with any medical communication between physicians, 
     patients, plans or state or federal authorities.


                 I. Patient access to clinical studies

       1. Plans may not deny or limit coverage of services 
     furnished to an enrollee because the enrollee is 
     participating in an approved clinical study if the services 
     would otherwise have been covered outside of the study.


                     J. Minimum Childbirth benefits

       1. Insurers or plans that cover childbirth benefits must 
     provide for a minimum inpatient stay of 48 hours following 
     vaginal delivery and 96 hours following a cesarean section.
       2. The mother and child could be discharged earlier than 
     the proposed limits if the attending provider, in 
     consultation with the mother, orders the discharge and 
     arrangements are made for follow-up post delivery care.

 II. Amendments to the Medicare Program, Medicare Select and Medicare 
                  Supplemental Insurance Regulations.


            A. Orientation and Medical Profile Requirements

       1. When a Medicare beneficiary enrolls in a Medicare HMO, 
     the HMO must provide an orientation to their managed care 
     system before Medicare payment to the HMO may begin;
       2. Medicare HMOs must perform an introductory medical 
     profile as defined by the Secretary on every new enrollee 
     before payment to the HMO may begin.


      B. Requirements for Medicare Supplemental policies (MediGap)

       1. All MediGap policies would be required to be community 
     rated;
       2. MediGap plans would be required to participate in 
     coordinated open enrollment;
       3. The loss ratio requirement for all plans would be 
     increased to 85 percent.


               C. Standards for Medicare Select policies

       1. Secretary would establish standards for Medicare Select 
     in regulations. To the extent practical, the standards would 
     be the same as the standards developed by the NAIC for 
     Medicare Select Plans. Any additional standards would be 
     developed in consultation with the NAIC.
       2. Medicare Select Plans would generally be required to 
     meet the same requirements in effect for Medicare risk 
     contractors under section 1876.
       Community Rating
       Prior approval of marketing materials
       Intermediate sanctions and civil money penalties
       3. If the Secretary has determined that a State has an 
     effective program to enforce the standards for Medicare 
     Select plans established by the Secretary, the State would 
     certify Medicare Select plans.
       4. Fee-for-service Medicare Select plans would offer either 
     the MediGap ``E'' plan with payment for extra billing added 
     or the MediGap ``J'' plan.
       5. If an HMO or competitive medical plan (CMP) as defined 
     under section 1876 offers Medicare Select, then the benefits 
     would be required to be offered under the same rules as set 
     forth in the MediGap provisions above. Such plans would 
     therefore have different benefits than traditional MediGap 
     plans.


          D. Arrangements with out of area dialysis services.

                     E. Coordinated open enrollment

       1. The Secretary would conduct an annual open enrollment 
     period during which Medicare beneficiaries could enroll in 
     any MediGap plan, Medicare Select, or an HMO contracting with 
     Medicare. Each plan would be required to participate.

                III. Amendments to the Medicaid Program


              A. Orientation and Immunization Requirements

       1. When a Medicaid beneficiary enrolls in a Medicaid HMO, 
     the HMO must provide an orientation to their managed care 
     system before Medicaid payment to the HMO may begin;
       2. Medicaid HMOs must perform an introductory medical 
     profile as defined by the Secretary on every new enrollee 
     before payment to the HMO may begin.
       3. When children under the age of 18 are enrolled in a 
     Medicaid HMO, the immunization status of the child must be 
     determined and the proper immunization schedule begun before 
     payment to the HMO is made.

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