oversight

Managed Care: State Approaches on Selected Patient Protections

Published by the Government Accountability Office on 1999-03-11.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                           United States General Accounting Office

GAO                        Testimony
                           Before the Committee on Health, Education, Labor, and
                           Pensions, U.S. Senate




For Release on Delivery
Expected at 10:00 a.m.
Thursday, March 11, 1999
                           MANAGED CARE

                           State Approaches on
                           Selected Patient
                           Protections
                           Statement of William J. Scanlon, Director
                           Health Financing and Public Health Issues
                           Health, Education, and Human Services Division




GAO/T-HEHS-99-85
Managed Care: State Approaches on Selected
Patient Protections

              Mr. Chairman and Members of the Committee:

              We are pleased to be here today as you discuss various approaches the
              states have taken to enhance consumer protections for the millions of
              privately-insured Americans who receive health coverage under managed
              care arrangements.1 To control rising health care costs and to promote
              enrollee health, managed care organizations attempt to control or
              coordinate the use of health services by their enrollees, particularly for
              high-cost services, such as hospital emergency department services or
              specialty care referrals. At the same time, consumers have increasingly
              voiced concerns about the effect of such constraints on their ability to
              obtain appropriate care. As the primary regulator of private employer-
              based health insurance for about 76 million people, states have responded
              to these concerns by implementing various measures designed to protect
              managed care consumers. However, an estimated 48 million people are
              enrolled in health plans exempt from state regulation and thus not covered
              by state patient protections. Pending before the Congress today are a
              number of bills that would extend certain protections to these individuals.

              At your request we reviewed selected state patient protection provisions
              already in place and congressional proposals under consideration. You
              specifically asked us to examine state statutes that relate to seven types of
              patient protection areas: coverage of emergency services, access to
              obstetricians and gynecologists, access to pediatricians, access to other
              specialists, continuity of care for enrollees whose providers leave the plan,
              drug formularies, and patient-provider communication (including
              prohibitions on “gag clauses”).2 We reviewed the health insurance statutes
              and regulations in 15 states that collectively account for about two-thirds of
              those enrolled in HMOs nationwide. In addition, we examined three Senate
              bills introduced in the 106th Congress--S. 6, the “Patients’ Bill of Rights Act
              of 1999”; S. 300, the “Patients’ Bill of Rights Plus Act”; and S. 326, the
              “Patients’ Bill of Rights Act.”



              1Health maintenance organizations (HMO) are the most recognized form of managed care. Other
              prevalent arrangements include preferred provider organizations and provider sponsored
              organizations, many of which offer more open-ended access to providers than do traditional HMOs.

              2
                Our 1997 review of HMO contracts with physicians found that none of the 529 HMOs surveyed used
              contract clauses that explicitly restricted physicians from discussing all appropriate medical options
              with patients. However, plans’ ability to terminate physician contracts can bring significant pressure to
              bear on physician-patient communication. See Managed Care: Explicit Gag Clauses Not Found in HMO
              Contracts, but Physician Concerns Remain (GAO/HEHS-97-75, Aug. 29, 1997).




              Page 1                                                                             GAO/T-HEHS-99-85
             Managed Care: State Approaches on Selected
             Patient Protections




             My remarks today will focus on the 15 states’ experience with crafting
             selected patient protection measures. In brief, we found that many states
             have responded to managed care consumers’ concerns about access to
             health care and information disclosure. However, they often differ in their
             specific approaches. For example:

             • Two states—California and Minnesota—have laws and/or regulations
               that address all seven types of protections we analyzed. Two other
               states—Colorado and Massachusetts—have laws that address three or
               fewer protections.
             • The patient protection most common among the 15 states addresses
               open patient-provider communication. Provisions addressing coverage
               of emergency care and access to certain specialists were also prevalent
               among states. In contrast, only four states had specific provisions to
               guarantee direct access to pediatricians.
             • Although several states have continuity-of-care provisions, they can
               differ markedly in the criteria for coverage and time period allowed for
               transition. About half of the states specify pregnancy as a condition
               subject to continuity-of-care coverage. Most of these states allow
               women in their second trimester of pregnancy to qualify for continuity-
               of- care protection if their physician leaves the plan. One state requires
               that women be in their third trimester to receive such coverage.



Background   Because the majority of privately insured Americans is now enrolled in
             some form of managed care and concerns have often been voiced about the
             associated controlled access to health services, legislators are increasingly
             addressing managed care issues. States and the federal government each
             have a role in regulating managed care plans. For individuals who buy
             insurance directly, state laws apply. For the 124 million people with
             employer-provided (group) coverage, the application of federal or state law
             depends on whether employers “self-insure” (that is, accept most or all of
             the financial risk for the coverage) or purchase insurance. The federal
             Employee Retirement Income Security Act of 1974 (ERISA) preempts the
             application of state laws for the approximately 48 million people who are
             enrolled in self-insured group health plans. Approximately 76 million
             people with private employer-sponsored group health insurance are in
             “fully insured” ERISA plans in which the employer purchases coverage
             from a health insurance issuer who assumes the risk of paying for covered
             items and services. State insurance laws cover individuals in such plans.




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                          Managed Care: State Approaches on Selected
                          Patient Protections




                          The three federal bills that we reviewed differ in the extent to which they
                          would extend certain protections to managed care enrollees. All three bills
                          would cover self-insured plans. S. 6 would also cover those participating in
                          fully insured group and individual health plans. Certain provisions in S. 300
                          and S. 326 would apply to self-insured group health plans and other
                          provisions would apply to all ERISA plans.



Overview Of Patient       Although all 15 states in our review have enacted legislation and/or
                          implemented regulations addressing patient concerns about managed care,
Protections In Selected   they do not all cover the same set of issues. As shown in table 1, two
States                    states—California and Minnesota—have provisions encompassing all
                          seven protections. Two other states—Colorado and Massachusetts—have
                          laws or regulations that incorporate three or fewer of the seven issues.

                          We found no direct relationship between a state’s rate of HMO penetration
                          and the presence of the seven protections in its laws for the 15 states in our
                          review. Massachusetts, with an HMO penetration rate of 54 percent, the
                          highest among the states in this study, addresses only one of the seven
                          protections. Yet Vermont, with less than half the HMO penetration rate of
                          Massachusetts, addresses six of the patient protection areas.




                          Page 3                                                        GAO/T-HEHS-99-85
Managed Care: State Approaches on Selected
Patient Protections




Table 1: Number of Patient Protections Adopted and HMO Enrollment Rates

                                     Number of patient protection         Percent of population
                                         areas covered by state              enrolled in HMOs,
State                                          law or regulationa                    as of 1998
California                                                            7                          47
Colorado                                                              3                          36
Connecticut                                                           5                          43
Florida                                                               5                          32
Kentucky                                                              5                          35
Maryland                                                              4                          44
Massachusetts                                                         1                          54
Minnesota                                                             7                          32
New Jersey                                                            6                          31
New York                                                              6                          38
Ohio                                                                  4                          23
Oregon                                                                5                          45
Pennsylvania                                                          6                          37
Texas                                                                 6                          18
Vermont                                                               6                          21
a
 The number of patient protections credited to each state was determined by whether the state had a
law or regulation that addressed all or some facets of the issue.
Sources: Information on number of protections for each state was determined by GAO. State HMO
penetration rates are from InterStudy Publications, Competitive Edge Part 2: HMO Industry Report
(8.2) (Oct. 1998). Vermont HMO penetration rates are from InterStudy Publications, Competitve Edge
Part 3: Regional Market Analysis (8.2) (Dec. 1998).


Of the seven types of protections, open patient-provider communication,
including prohibitions on gag clauses, is the only one addressed by all
15 states we reviewed. Also common is coverage of emergency care.
Continuity of care is addressed by 9 of the 15 states and access to
pediatricians is addressed by only 4 states. (See table 2.)




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                         Managed Care: State Approaches on Selected
                         Patient Protections




                         Table 2: Number of States That Have Addressed Selected Patient Protections

                         Patient protection provision                                                      Number of states
                         Patient-provider communications                                                                     15
                         Coverage of emergency care                                                                          14
                         Access to other specialists                                                                         12
                         Access to obstetricians and gynecologists                                                           11
                         Drug formularies                                                                                    11
                         Continuity of care                                                                                    9
                         Access to pediatricians                                                                              4

                         Because the legislative action in some of the 15 states has been relatively
                         recent, implementation issues, cost implications, and actual benefits for
                         consumers are not yet well understood. Furthermore, some state officials
                         we interviewed indicated that the absence of certain patient protections in
                         statutes or regulations may be an indication that they did not see a need for
                         such regulation, given health plan practices in the state. It may be general
                         practice among managed care plans to have policies that are concordant
                         with consumer protections. For example, many officials told us that they
                         have no requirements that HMOs classify pediatricians as primary care
                         physicians because HMOs already generally do so.



States Often Varied in   While we found some common ground among states in the types of patient
                         protections they have addressed, the scope and standards of the provisions
Their Specific           vary from state to state.3 In general, when states address disclosure of
Approaches               information to plan members, their provisions were similar, while in the
                         case of access issues, the provisions varied significantly in detail. These
                         variations affect who receives protection and under what circumstances,
                         as illustrated below. (App. II provides more detail on each of these seven
                         types of patient protections and their comparison to three pending federal
                         bills.)

                         Coverage of emergency services: Concerned about cost-effectiveness,
                         most health plans attempt to manage enrollees’ use of emergency services.
                         One common approach is to require members to call the plan before


                         3
                           To help standardize laws on patients’ rights, the National Association of Insurance Commissioners has
                         developed several model statutes addressing aspects of consumer protection that may be adopted by
                         state legislatures.




                         Page 5                                                                           GAO/T-HEHS-99-85
Managed Care: State Approaches on Selected
Patient Protections




seeking emergency care, unless the member has a truly serious, life-
threatening emergency (such as a bleeding wound or heart attack). When
there is no prior authorization and the emergency care provided is not
found to have been medically necessary, then coverage can be denied.

Many states have attempted to define “emergency medical condition” in
their statutes and regulations. They have used somewhat different terms,
such as “prudent layperson” and “reasonable expectation,” to specify what
a nonmedically trained individual would reasonably assume to be an
emergency.4 However, three of the states that have adopted such
definitional standards do not prohibit plans from requiring prior
authorization for coverage of emergency care.

Access to obstetricians and gynecologists: Plan enrollees generally must
obtain a referral from their primary care physician before obtaining
services from a specialist. However, women may prefer to see a
gynecologist for the provision of routine and preventive women’s health
care services.

States attempt to facilitate access to obstetricians/gynecologists (OB/GYN)
through various means. One approach is to allow female enrollees to
designate an OB/GYN as their primary care provider. Another approach is
to prohibit plans from requiring authorization or referral for coverage of
certain gynecological care and pregnancy-related services by an OB/GYN.
Some states—such as Pennsylvania and Vermont--further stipulate that
OB/GYNs must communicate with the patient’s primary care physician
concerning the services provided, while others—such as California and
New York—allow plans to establish communication protocols between
OB/GYNs and primary care physicians.

Continuity of care: Enrollees may be undergoing a course of treatment or
be receiving pregnancy-related care when their health care provider leaves
a health plan. In some circumstances, the departure of the provider can
have an adverse effect on the enrollee. Some states have adopted
measures to enable enrollees to continue seeing their original health care
provider for a period of time.



4
  The prudent layperson standard refers to a person having an average knowledge of medicine and
health and whether that person would believe that the absence of immediate medical attention would
jeopardize health. The reasonable expectation standard specifies that the absence of immediate
attention could reasonably be expected to jeopardize health.




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             Managed Care: State Approaches on Selected
             Patient Protections




             States’ provisions differed in the duration of the transition period and the
             circumstances under which individuals would be permitted to continue to
             be treated by their original provider. Only seven states specify pregnancy
             as a condition subject to this coverage. Most of these states allow pregnant
             women in their second trimester to qualify for continuity-of-care protection
             if their physician leaves the plan. However, one state requires that women
             be in their third trimester to receive such coverage.

             Drug formularies: Managed care plans often provide coverage for
             prescription drugs through a formulary. However, some enrollees may
             require drugs that are not on the plan’s formulary. States have responded in
             various ways to consumers’ concerns about the inclusion of drugs and their
             desire for a process to consider exceptions to a plan’s formulary.

             Many states require that plans disclose the use of a drug formulary to plan
             members. Several states require plans to provide an exception process that
             allows coverage of nonformulary alternatives when medically indicated.
             Many of the states simply require plans that have a procedure to obtain
             nonformulary drugs to disclose the process. There is also a distinction in
             how states address cost-sharing requirements for prescription drugs.
             Oregon requires full disclosure of cost-sharing for plans with procedures to
             obtain nonformulary drugs. Ohio specifies that a plan may not charge more
             for a nonformulary drug than for a formulary drug, if a provider certifies
             that the formulary drug is ineffective or harmful for the patient.



Conclusion   States are responding in myriad ways to managed care consumers’
             concerns about the ability to get the medical care they need. In many
             cases, these state actions closely parallel each other, such as coverage of
             emergency care and open patient-provider communications. But it is also
             apparent that the states’ approaches often vary in their scope and in the
             details, as they are tailored to the needs and priorities within the individual
             states.

             Realizing the promise of managed care—especially its ability to constrain
             health care cost growth—is dependent upon many factors, including
             consumers’ satisfaction with their ability to obtain timely, needed health
             services. Perceived or real undue obstacles to accessing needed care will
             undermine consumer acceptance and confidence in managed care. They
             could also lead to a backlash resulting in overly restrictive regulation that
             could thwart the advantages and efficiencies to be gained in a managed
             care environment. Balancing regulatory approaches, such as the assurance



             Page 7                                                        GAO/T-HEHS-99-85
Managed Care: State Approaches on Selected
Patient Protections




of minimum standards, with quality-based competition among providers
can be an effective approach that ensures quality and efficient health care
for managed care enrollees. We will be happy to continue to work with you
to monitor the further development and implementation of these and other
issues.


Mr. Chairman, this concludes my statement. I will be happy to answer any
questions that you or other Members of the Committee may have.




Page 8                                                     GAO/T-HEHS-99-85
Appendix I

Scope and Methodology                                                                        AppenIx
                                                                                                   di




             Our review focused on 15 states and seven types of patient protection
             provisions. The 15 states collectively account for about two-thirds of HMO
             enrollees nationwide. The criteria we used to select the states included
             (1) HMO penetration (the percentage of the state population enrolled in
             HMOs); (2) HMO enrollment; and (3) geographic diversity. The seven types
             of patient protections in our study were selected to include some of the
             types of protections in Senate bills 6, 300, and 326, and protections of
             particular interest to the Committee.

             To obtain information on laws or regulations the 15 states used to address
             the seven types of patient protections, we (1) researched work done by
             others, such as the National Conference of State Legislatures; (2) searched
             databases of state laws and regulations in place as of January 1, 1999; and
             (3) contacted insurance and/or health department officials in all 15 states.
             Working with our Office of General Counsel, we analyzed the state laws
             and regulations to identify provisions relevant to the seven types of patient
             protections. We provided our summaries of the state provisions to officials
             at the state health and insurance departments for their review. We made
             technical changes as needed for the 14 states that responded with
             comments and provided additional documentation. In cases where state
             officials indicated they imposed requirements on managed care plans not
             documented in state laws or regulations, we based our analysis on the laws
             and regulations.

             In doing our work, we did not determine whether managed care plans’
             practices complied with the state laws and regulations. Actual practices
             may either provide more protections than required by the states or violate
             the state laws and regulations. Also, we did not determine which of the
             state laws and regulations, if any, are being challenged in the courts, or
             whether those that have been decided had any bearing on our analysis and
             conclusions.

             We conducted our review between January and March 1999 in accordance
             with generally accepted government auditing standards.




             Page 9                                                       GAO/T-HEHS-99-85
Appendix II

Detailed Comparison of State Patient
Protection Provisions and Proposed Federal
Provisions                                                                                      AppeInx
                                                                                                      Idi




                 All 15 states in our review have laws or regulations that place some patient
                 protection requirements on health plans. The seven types of patient
                 protections included in our review are addressed separately below.
                 Collectively, the information we have developed shows considerable
                 variation in the details of how the states have addressed these issues. In
                 some cases, their different approaches lead to similar health care
                 protections; in other cases similar provisions include subtle differences in
                 language that lead to different health care protections. Also provided in
                 this appendix are comparisons of state actions with Senate bills 6, 300, and
                 326.



Coverage of      Many states have laws or regulations intended to protect enrollees if a
                 health insurance plan denies coverage for emergency services because the
Emergency Care   enrollee did not seek prior approval or because the condition was not, in
                 fact, a medical emergency. Most states we reviewed:

                 • Specify a standard for determining when an emergency medical
                   condition exists. For example, some states use a “prudent layperson”
                   standard (a person having an average knowledge of medicine and health
                   would believe that the absence of immediate medical attention would
                   jeopardize health); other states use a “reasonable expectation” standard
                   (the absence of immediate attention could reasonably be expected to
                   jeopardize health), or a “life and limb” standard (the absence of
                   immediate attention would be a threat to life or limb); and/or
                 • Prohibit plans from requiring enrollees to obtain prior authorization for
                   coverage of emergency services, including screening and stabilization,
                   in circumstances that meet the standard used to define an emergency.

                 As shown in table II.1, all 3 Senate bills and 14 of the 15 states use a
                 standard for defining emergency conditions. Of the 14 states that use a
                 standard, 9 use the prudent layperson standard.

                 As further shown in table II.1, all 3 Senate bills and 11 of the 15 states
                 prohibit plans from requiring enrollees to seek prior authorization for
                 emergency services. In some states, prior authorization for emergency
                 care is not necessary if a prudent layperson would believe that the absence
                 of immediate care would jeopardize health. While Maryland, Minnesota,
                 and Oregon use a “prudent layperson” or “reasonable layperson” standard
                 to define a medical emergency, these states do not prohibit a health plan
                 from requiring prior authorization for coverage of emergency care.




                 Page 10                                                     GAO/T-HEHS-99-85
                          Appendix II
                          Detailed Comparison of State Patient
                          Protection Provisions and Proposed Federal
                          Provisions




                          Table II.1: Coverage of Emergency Care

                                                                                          Prohibits prior
                                                           Standard used to define        authorization requirements
                                                           emergency medical              for coverage of emergency
                                                           condition                      care
                          Senate bills
                          S. 6                             Prudent layperson              Yes
                          S. 300, S. 326                   Prudent layperson              Yes
                          States
                          California                       Reasonable expectation         Yes
                          Colorado                         Enrollee believes it is a      Yes
                                                           life- or limb-threatening
                                                           emergencya
                          Connecticut                      Prudent layperson              Yes
                          Florida                          Reasonable expectation         Yes
                          Kentucky                         Prudent layperson              Yes
                          Maryland                         Prudent layperson              No
                          Massachusetts                    No comparable standard         No
                          Minnesota                        Reasonable layperson           No
                          New Jersey                       Reasonable expectation         Yes
                          New York                         Prudent layperson              Yes
                          Ohio                             Prudent layperson              Yes
                          Oregon                           Prudent layperson              No
                          Pennsylvania                     Prudent layperson              Yes
                          Texas                            Prudent layperson              Yes
                          Vermont                          Prudent layperson              Yes
                          a
                           The Colorado “life or limb” standard applies when enrollees use the local emergency medical system
                          (911) to obtain emergency services. Colorado statutory law is not clear on what standard, if any,
                          applies in other situations.




Access to Obstetricians   Although plan enrollees generally must obtain a referral from primary care
                          physicians before obtaining services from specialists, many states have
and Gynecologists         enacted laws and regulations that make it easier for women to obtain care
                          from obstetricians and gynecologists (OB/GYN). For example, some states

                          • require that health plans provide women enrollees the option to
                            designate an OB/GYN as their primary care physician, or have an
                            essentially equivalent requirement that health plans include OB/GYN
                            physicians in their definition of allowed primary care physicians; and/or



                          Page 11                                                                       GAO/T-HEHS-99-85
Appendix II
Detailed Comparison of State Patient
Protection Provisions and Proposed Federal
Provisions




• require that plans allow women direct access to obstetricians and
  gynecologists for specific services, such as annual gynecological
  examinations, routine gynecological care, and obstetrical care during
  pregnancy.

As shown in table II.2, Senate bill 6 and 7 of the 15 states require plans to
provide women the option to designate an OB/GYN as their primary care
physician. Senate bill 6, and five of these seven states also have provisions
that provide women direct access to an OB/GYN under certain
circumstances, such as for an annual exam or pregnancy care, even if a
woman decides not to designate an OB/GYN as her primary care physician.
Senate bills 300 and 326 and eight states do not require plans to provide
women the option to designate an OB/GYN as their primary care physician,
but these Senate bills and four of the eight states do have provisions
requiring plans to provide women direct access to an OB/GYN for certain
types of services, such as annual examinations, prenatal care, and
treatment of gynecological conditions.



Table II.2: Access to Obstetricians and Gynecologists

                 Explicit option to
                 designate OB/      Direct access
                 GYN as primary without a
                 care physician     referral        Comments
Senate bills
S. 6             X                   X
S. 300, S. 326                       X              Does not preclude the health
                                                    plan from requiring that the OB/
                                                    GYN notify the primary care
                                                    provider or the plan of treatment
                                                    decisions
States
California       X                   X              Direct access required, but
                                                    plans may establish protocols for
                                                    communication between OB/
                                                    GYN and primary care physician
                                                    regarding treatment
Colorado                             See comment    Plans have the option of granting
                                                    direct access or developing
                                                    timely referral procedures




Page 12                                                            GAO/T-HEHS-99-85
Appendix II
Detailed Comparison of State Patient
Protection Provisions and Proposed Federal
Provisions




                 Explicit option to
                 designate OB/      Direct access
                 GYN as primary without a
                 care physician     referral        Comments
Connecticut      X                   X              Direct access required for care
                                                    related to pregnancy, all active
                                                    gynecological conditions, and all
                                                    primary and preventive OB/GYN
                                                    services
Florida
Kentucky         X
Maryland         X                   X              Direct access required for
                                                    medically necessary and routine
                                                    care; in certain circumstances,
                                                    the OB/GYN must confer with
                                                    primary care physician for
                                                    nonroutine care
Massachusetts
Minnesota        X                   X              Direct access required for
                                                    annual exams, medically
                                                    necessary follow-up care,
                                                    maternity care, and
                                                    gynecological conditions and
                                                    emergencies
New Jersey       X
New York                             X              Direct access required for at
                                                    least two exams per year for
                                                    primary and preventive OB/GYN
                                                    services or care related to
                                                    pregnancy and any follow-up
                                                    care; if required by the plan, the
                                                    OB/GYN must confer with
                                                    primary care physician for
                                                    follow-up services
Ohio
Oregon           X                   X              Direct access required for
                                                    annual exams and pregnancy
                                                    care
Pennsylvania                         X              Direct access required for
                                                    annual exams, medically
                                                    necessary and appropriate
                                                    follow-up care, and referrals
                                                    related to pregnancy and
                                                    gynecological care; OB/GYN
                                                    must inform primary care
                                                    physician of such services




Page 13                                                             GAO/T-HEHS-99-85
                          Appendix II
                          Detailed Comparison of State Patient
                          Protection Provisions and Proposed Federal
                          Provisions




                                           Explicit option to
                                           designate OB/      Direct access
                                           GYN as primary without a
                                           care physician     referral        Comments
                          Texas                                X              Direct access required for
                                                                              annual examinations and care
                                                                              related to pregnancy and active
                                                                              gynecological conditions
                          Vermont                              X              Direct access required for at
                                                                              least two visits per year and for
                                                                              all follow-up care for problems
                                                                              identified during such visits;
                                                                              OB/GYN must furnish all
                                                                              relevant information to the
                                                                              primary care physician




Access to Pediatricians   If managed care plans classify pediatricians as specialists, enrollees could
                          be required to obtain referrals before taking their children to a pediatrician.
                          To promote access to pediatric care

                          • Senate bills 300 and 326 prohibit plans from requiring enrollees to obtain
                            prior authorization or referrals for pediatric care and
                          • Senate bill 6 requires plans to offer enrollees the option to designate a
                            pediatrician as a child’s primary care physician.

                          As shown in table II.3, none of the 15 states prohibit plans from requiring
                          enrollees to obtain prior authorization or referrals for pediatric care; but, 4
                          states achieve the same objective--allowing direct access to pediatricians--
                          by including pediatricians in their definition of primary care physicians.
                          According to officials in many of the 15 states, health plans generally
                          consider pediatricians to be primary care physicians. As a result, most of
                          the state officials we contacted do not believe there is a problem obtaining
                          direct access to pediatricians.




                          Page 14                                                             GAO/T-HEHS-99-85
                        Appendix II
                        Detailed Comparison of State Patient
                        Protection Provisions and Proposed Federal
                        Provisions




                        Table II.3: Access to Pediatricians

                                                                Requires option to   Definition of
                                                                designate            primary care
                                           Prohibits prior      pediatrician as      physician
                                           authorization or     primary care         includes
                                           required referral    physician            pediatricians
                        Senate bills
                        S. 6                                    X
                        S. 300, S. 326     X
                        States
                        California                                                   X
                        Colorado
                        Connecticut
                        Florida
                        Kentucky                                                     X
                        Maryland
                        Massachusetts
                        Minnesota                                                    X
                        New Jersey                                                   X
                        New York
                        Ohio
                        Oregon
                        Pennsylvania
                        Texas
                        Vermont




Access to Specialists   Controlling access to expensive specialty care is integral to most managed
                        care plans, but consumers are concerned that such controls may
                        inappropriately restrict their access to specialty care, especially for chronic
                        medical conditions such as diabetes or cardiac disease. Also, managed
                        care enrollees with chronic conditions may find it particularly burdensome
                        to repeatedly seek referrals to a specialist while receiving ongoing care
                        from the specialist. To provide easier access to specialists, the majority of
                        states we reviewed have laws and regulations that require plans to:




                        Page 15                                                           GAO/T-HEHS-99-85
                                                Appendix II
                                                Detailed Comparison of State Patient
                                                Protection Provisions and Proposed Federal
                                                Provisions




                                                • Have and/or disclose procedures for referrals to specialists;
                                                • Have procedures for designating a specialist to be an enrollee’s primary
                                                  care physician for enrollees with chronic, disabling, or life-threatening
                                                  conditions or for allowing specialists to coordinate care for certain
                                                  enrollees; and/or
                                                • Have procedures for granting enrollees a “standing referral” to a
                                                  specialist. Standing referrals allow enrollees to obtain ongoing care for
                                                  specific medical conditions from a specialist without seeking further
                                                  referrals from the primary care physician.

                                                As shown in table II.4, all three Senate bills and 12 of the 15 states have one
                                                or more of these provisions, and 6 states have all three provisions.

                                                None of the 15 states have provisions guaranteeing direct access to all
                                                specialists. As previously noted, some states provide direct access to
                                                OB/GYN and pediatric physicians. Some states may also require plans to
                                                provide direct access to other types of specialists. For example, Florida
                                                requires plans to allow enrollees up to five visits per year to a dermatologist
                                                without prior approval.



Table II.4: Access to Specialists

                     Requires that plans          Requires that plans have        Requires that plans have
                     have and/or disclose         procedures for designating      procedures for granting
                     procedures for               specialist as primary care      enrollees standing
                     referrals to specialists     physician                       referrals to specialists   Comments
Senate bills
S. 6                 X                            X                               X
S. 300, S. 326       X
States
California           X                            X                               X
Colorado             X                                                                                       Plans must have a
                                                                                                             process for timely or
                                                                                                             expedited referrals to
                                                                                                             specialists
Connecticut          X
Florida              X                                                            X
Kentucky
Maryland
Massachusetts




                                                Page 16                                                            GAO/T-HEHS-99-85
                                          Appendix II
                                          Detailed Comparison of State Patient
                                          Protection Provisions and Proposed Federal
                                          Provisions




               Requires that plans           Requires that plans have             Requires that plans have
               have and/or disclose          procedures for designating           procedures for granting
               procedures for                specialist as primary care           enrollees standing
               referrals to specialists      physician                            referrals to specialists         Comments
Minnesota      X                             X                                    X
New Jersey     X
New York       X                             X                                    X
Ohio           X                             X                                    X
Oregon         X
Pennsylvania   X                             X                                    X
Texas          X                             X
Vermont        X                             X                                    X




Continuity of Care                        When a provider leaves a health care plan, the plan generally will not
                                          continue to cover services obtained from that provider. Enrollees may face
                                          the choice of changing providers in the midst of their treatment or paying
                                          out-of-pocket to continue care with the provider. To enable continuity of
                                          care in certain circumstances, many states have laws or regulations that:

                                          • require managed care plans to cover care with a provider that leaves the
                                            plan if an enrollee is undergoing a course of treatment or has a specific
                                            condition; and/or
                                          • require plans to continue coverage for a specific period of time.

                                          As shown in table II.5, the 3 Senate bills and 9 of the 15 states have
                                          continuity of care provisions for enrollees in managed care plans.1
                                          However, all of these states have some continuity of care conditions that
                                          are different than those in the Senate bills. For example, the 3 Senate bills
                                          require continuity of care for enrollees in institutional care, but none of the
                                          15 states explicitly require continuity of care for institutionalized enrollees.
                                          The Senate bills and most states require that pregnant women be in their
                                          second trimester of pregnancy to be eligible for continuity of care, while
                                          Florida limits eligibility to women in their third trimester. For states that
                                          require continuation of coverage during the course of a treatment or for
                                          patients with special needs, the duration of required coverage ranges from
                                          60 to 120 days, though for a terminal illness, Texas requires coverage for
                                          9 months, and Senate bill 6 has no duration limit. In Texas, however,


                                          1
                                            These continuity of care provisions do not apply to situations where providers have been terminated
                                          by the plan due to concerns about quality of care.




                                          Page 17                                                                          GAO/T-HEHS-99-85
Appendix II
Detailed Comparison of State Patient
Protection Provisions and Proposed Federal
Provisions




continuity of care provisions for pregnancy, disability, acute care needs,
and terminal illness apply only if discontinuing care with a provider that
leaves the plan could harm the patient. Florida and New Jersey require
continued coverage for non-pregnancy-related care only when preserving
the relationship between the patient and the provider is “medically
necessary.”

States that do not address these specific continuity of care issues may have
related provisions. For example, Colorado requires that plans provide
60 days continuation of coverage in cases where the plan fails to provide
proper advanced notice to enrollees that their provider’s contract is being
terminated.




Page 18                                                     GAO/T-HEHS-99-85
                                               Appendix II
                                               Detailed Comparison of State Patient
                                               Protection Provisions and Proposed Federal
                                               Provisions




Table II.5: Continuity of Care

                    Conditions for continuing care if        Required duration of
                    provider leaves plan                     coverage                         Comments
Senate bills
S.6
                    Course of treatment                      90 days
                    Pregnancy                                Through postpartum care          Must be in second trimester to qualify
                    Terminal illness                         No limit
                    Institutional care                       Until discharge
S. 300, S. 326
                    Course of treatment                      90 days
                    Pregnancy                                Through postpartum care          Must be in second trimester to qualify
                    Terminal illness                         90 days
                    Institutional care                       Lesser of 90 days or discharge
States
California
                    Pregnancy                                Through postpartum care          Must be in second trimester or high risk
                                                                                              to qualify
                    Acute or serious chronic conditions      90 days
Colorado            See comment                              See comment                      Plans must provide 60 days continued
                                                                                              coverage if they do not give enrollee
                                                                                              proper advanced notice that their
                                                                                              provider’s contract is being terminated
Connecticut
Florida
                    Pregnancy                                Through postpartum care          Must be in third trimester
                    Life threatening disease                 60 days                          Only “medically necessary” conditions
                                                                                              qualify
                    Disabling or degenerative disease        60 days                          Only “medically necessary” conditions
                                                                                              qualify
Kentucky
Maryland            Course of treatment                      90 days                          The state law has a discrepancy as to
                                                                                              whether 90 days is a minimum or
                                                                                              maximum
Massachusetts
Minnesota           “Special medical needs”                  120 days
New Jersey




                                               Page 19                                                                GAO/T-HEHS-99-85
                                          Appendix II
                                          Detailed Comparison of State Patient
                                          Protection Provisions and Proposed Federal
                                          Provisions




               Conditions for continuing care if        Required duration of
               provider leaves plan                     coverage                       Comments
               Course of treatment                      120 days                       Only "medically necessary" conditions
                                                                                       qualify
               Pregnancy                                6 weeks after delivery
New York
               Course of treatment                      90 days
               Pregnancy                                Through postpartum care        Must be in second trimester to qualify
Ohio
Oregon
Pennsylvania
               Course of treatment                      60 days
               Pregnancy                                Through postpartum care        Must be in second trimester to qualify
Texas
               Disability or acute care                 90 days                        Applies only if discontinuing care could
                                                                                       harm the patient.
               Pregnancy                                6 weeks after delivery         Applies only if discontinuing care could
                                                                                       harm the patient or if the patient is past
                                                                                       the 24th week of pregnancy when her
                                                                                       provider leaves the plan.
               Terminal illness                         9 months                       Applies only if discontinuing care could
                                                                                       harm the patient.
Vermont
               Pregnancy                                Through postpartum care        Providers must agree to abide by plan’s
                                                                                       payment rates, and special provisions
                                                                                       exist for new members
               Life-threatening disease                 60 days                        Providers must agree to abide by plan’s
                                                                                       payment rates, and special provisions
                                                                                       exist for new members
               Disabling or degenerative disease        60 days                        Providers must agree to abide by plan’s
                                                                                       payment rates, and special provisions
                                                                                       exist for new members




Drug Formularies                          Managed care plans often use drug formularies (lists of prescription drugs
                                          normally covered by the plan) to reduce the variety of drugs they cover,
                                          thereby enabling plans to negotiate larger volume discounts with
                                          pharmacies and pharmaceutical manufacturers. Although plans may try to
                                          structure their formularies to include some varieties of most types of drugs,
                                          some individuals may require a specific drug not in the formulary because
                                          of the enrollees’ individual characteristics (such as race, age, or gender),
                                          the complexity of their medical conditions, or unusual adverse reactions to



                                          Page 20                                                               GAO/T-HEHS-99-85
Appendix II
Detailed Comparison of State Patient
Protection Provisions and Proposed Federal
Provisions




certain varieties of a drug. In response to concerns that a health plan’s
formulary may prevent coverage of a drug most appropriate to an enrollee’s
needs, states often have laws or regulations that:

• Require managed care plans to disclose the use of drug formularies and/
  or the drugs included in the formulary, upon request;
• Require managed care plans to disclose procedures for obtaining drugs
  not on a formulary, if the plan selectively provides coverage for
  nonformulary drugs; and/or
• Require managed care plans to have procedures for obtaining non-
  formulary drugs.

As shown in table II.6, the three Senate bills and 10 of the 15 states have
one or more provisions regulating the use of formularies. Four states—
California, Oregon, Pennsylvania, and Vermont—have all three of the above
drug formulary provisions. Nine states require managed care plans to
disclose the use of drug formularies and/or the drugs included in the
formulary upon request by the enrollee, and six states require that plans
have procedures for enrollees to obtain nonformulary drugs. Some states,
such as Vermont, provide enrollees with access to nonformulary drugs
under specific circumstances, including when a formulary drug is
ineffective or may reasonably be expected to cause adverse reactions.
Beyond these regulations of drug formularies, some states mandate
coverage of some specific drug treatments and off-label uses of drugs.




Page 21                                                    GAO/T-HEHS-99-85
                   Appendix II
                   Detailed Comparison of State Patient
                   Protection Provisions and Proposed Federal
                   Provisions




                   Table II.6: Drug Formularies

                                                           Requires disclosure   Requires procedures
                                      Requires             of procedures to      to obtain
                                      disclosure of        obtain nonformulary   nonformulary
                                      formularies          drugs                 drugs
                   Senate bills
                   S. 6               X                                          X
                   S. 300, S. 326     X                    X
                   States
                   California         X                    X                     X
                   Colorado
                   Connecticut        X
                   Florida            X
                   Kentucky           X
                   Maryland
                   Massachusetts
                   Minnesota                               X                     X
                   New Jersey
                   New York           X
                   Ohio                                                          X
                   Oregon             X                    X                     X
                   Pennsylvania       X                    X                     X
                   Texas              X
                   Vermont            X                    X                     X




Patient-Provider   Concerned that health plans may try to prevent physicians from discussing
                   certain issues with their patients, such as treatment options not covered by
Communications     the plan and grievance and appeal rights, states generally have laws or
                   regulations that

                   • prohibit “gag clauses” (restrictions on certain communications) in
                     contracts between plans and health care providers, and/or
                   • prohibit plans from terminating or otherwise penalizing health care
                     providers for discussing issues such as treatment options with their
                     patients.




                   Page 22                                                           GAO/T-HEHS-99-85
Appendix II
Detailed Comparison of State Patient
Protection Provisions and Proposed Federal
Provisions




As shown in table II.7, the three Senate bills2 and 13 of the 15 states have
provisions that prohibit gag clauses in contracts between health plans and
providers. While Massachusetts and New Jersey do not have these specific
provisions, they do have other relevant requirements. Massachusetts
health plans are prohibited from refusing to contract with or compensate
providers who have discussed the health plan’s rules with their patients as
they relate to the patients’ needs. Similarly, New Jersey regulations
stipulate that enrollees are entitled to receive from their physician or
provider an explanation of their medical condition, recommended
treatment, risks of treatment, expected results, and reasonable medical
alternatives, whether or not they are covered benefits.

As further shown in table II.7, Senate bill 6, and 14 of the 15 states explicitly
prohibit managed care plans from penalizing providers for discussing
certain issues with their patients, such as treatment options not covered by
the plan. Some states, such as Massachusetts, prohibit specific types of
penalties, such as refusing to compensate a provider, while other states
prohibit penalties without specifying any type of penalty.



Table II.7: Patient-Provider Communications

                                            Explicitly prohibits
                     Prohibits gag          penalizing providers
                     clauses in             for medical
                     insurer/provider       communications with
                     contracts              patients                     Comments
Senate bills
S. 6                                        X
S. 300, S. 326       X
States
California           X                      X
Colorado             X                      X
Connecticut          X                      X
Florida              X
Kentucky             X                      X
Maryland             X                      X




2
  Senate bills 300 and 326 prohibit any restrictions on communications between health care providers
and plan enrollees, in effect prohibiting gag clauses in contracts between plans and providers.




Page 23                                                                         GAO/T-HEHS-99-85
Appendix II
Detailed Comparison of State Patient
Protection Provisions and Proposed Federal
Provisions




                                      Explicitly prohibits
                  Prohibits gag       penalizing providers
                  clauses in          for medical
                  insurer/provider    communications
                  contracts           with patients          Comments
Massachusetts     See comments        X                      Health plans may not
                                                             refuse to contract with
                                                             or compensate
                                                             providers because of
                                                             content of medical
                                                             communications
Minnesota         X                   X
New Jersey        See comments        X                      Members are entitled to
                                                             receive from the
                                                             member's physician
                                                             explanations of the
                                                             member's health
                                                             conditions, treatment
                                                             options, and similar
                                                             issues
New York          X                   X
Ohio              X                   X
Oregon            X                   X
Pennsylvania      X                   X
Texas             X                   X
Vermont           X                   X




Page 24                                                            GAO/T-HEHS-99-85
Page 25   GAO/T-HEHS-99-85
Page 26   GAO/T-HEHS-99-85
Page 27   GAO/T-HEHS-99-85
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(101794)   Leter   Page 28                                                GAO/T-HEHS-99-85
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