Laws would rein in HMOs General Assembly likely to pass measure for outside appeals

Industry supports bill

Other legislation is in the pipeline

prospects uncertain

March 19, 1997|By Michael Dresser | Michael Dresser,SUN STAFF

Broad legislation that could fundamentally change the balance of power between health maintenance organizations and their members appears to be gaining momentum in the Maryland General Assembly.

The most significant proposal would give patients an avenue outside the insurer's internal appeals process to challenge decisions denying them coverage for medical procedures.

According to legislators and a leading industry lobbyist, it is also the most likely to pass.

The measure would set up a grievance and appeal process that would give patients the option of taking their complaints to the state insurance commissioner to be resolved.

The HMO appeals bill is just one of several "global" approaches advancing in the Assembly as legislators seek to get away from the practice of making laws regulating one medical procedure at a time -- such as requiring coverage of a minimum hospital stay after breast cancer surgery.

Among other bills seeking to get away from that approach are ones that would force HMOs to disclose more information and empower doctors to make decisions about hospitalization without HMOs looking over their shoulders.

Because of the sheer volume of constituent complaints about managed care, HMOs have long been a target of legislative slings and arrows in Annapolis.

But as the number of bills seeking to correct HMOs' handling of specific procedures has grown -- one lobbyist testified yesterday that he has counted 61 this year -- a consensus has been building that there must be a better way to resolve disputes among HMOs, their members and health care providers.

That is the thrust of the HMO appeals legislation introduced by Del. John P. Donoghue, an Allegany County Democrat, in the House and Sen. John C. Astle, an Anne Arundel Democrat, in the Senate.

Grievances and appeals

The measure would strengthen current requirements that health insurers provide an appeals process for members who have had coverage denied or limited.

It would also provide a process for appealing to an independent panel to resolve the dispute.

D. Robert Enten, chief lobbyist for the Maryland Association of Health Maintenance Organizations, said most of the industry's concerns about the grievance and appeal bill have been resolved and that the industry now supports the legislation.

"At this point, clearly it's going to pass and it's going to be a terrific bill for for the public, for the providers and for the HMOs," he said.

Jumping on the train

But Jay Schwartz, a lobbyist for the state medical society, said the HMOs were supporting the bill only because they hope it will help them stave off other restrictive legislation.

"They latched onto this bill as being the silver bullet for all bills. They're the only people I know who can jump on a train as it's leaving the station and demand a first-class seat," Schwartz said.

Under the legislation, an HMO member who was denied coverage for a procedure or hospital stay would have to be told that the Health Advocacy Unit of the Attorney General's Office was available to help file the complaint under the insurer's internal grievance procedure.

If that appeal were unsuccessful, the HMO member would then have the right to appeal to the state insurance commissioner -- who would be authorized to convene a panel of health care professionals to hear the case.

Significantly, the legislation would put the burden of proof on the insurance carrier to show that its denial was medically justified.

The measure has the support of both the Attorney General's Office and the insurance commissioner, although both agencies have said they would require additional resources to handle the new responsibilities.

Another significant measure that is a good bet for passage is the Health Care Consumer Information and Education Act, sponsored by Senate Finance Committee Chairman Thomas L. Bromwell, a Baltimore County Democrat.

Explanation in plain English

That bill, which has already passed the Senate, would specify information that health insurers must disclose to prospective customers in their marketing materials.

Among other provisions, it would require HMOs to explain in plain English how they compensate health care providers and how each $100 they collect in premiums is allocated.

Del. Michael E. Busch, an Anne Arundel Democrat who is chairman of the House Economic Matters Committee, said similar legislation has failed in his committee in previous years, but that the current version was greatly improved.

"We'll probably look favorably on it," he said.

Meanwhile, members of his committee have been quietly transforming a narrow bill that sought to require a 48-hour hospital stay after mastectomies into much more sweeping legislation.

According to Donoghue, who chairs the subcommittee that is rewriting the legislation, the amended bill would let physicians make the decisions on the covered length of hospital stay for all procedures.

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