0001| SENATE BILL 311 | 0002| 43RD LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 1998 | 0003| INTRODUCED BY | 0004| LINDA M. LOPEZ | 0005| | 0006| | 0007| | 0008| FOR THE HEALTH AND WELFARE REFORM COMMITTEE | 0009| | 0010| AN ACT | 0011| RELATING TO HEALTH CARE; ENACTING THE MEDICAID MANAGED CARE | 0012| ACT; PROVIDING REQUIREMENTS FOR MEDICAID MANAGED HEALTH CARE | 0013| PLANS; IMPOSING A CIVIL PENALTY. | 0014| | 0015| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0016| Section 1. SHORT TITLE.--This act may be cited as the | 0017| "Medicaid Managed Care Act". | 0018| Section 2. DEFINITIONS.--As used in the Medicaid Managed | 0019| Care Act: | 0020| A. "department" means the human services | 0021| department; | 0022| B. "enrollee", "patient" or "consumer" means a | 0023| person who is entitled to receive health care benefits from a | 0024| managed health care plan; | 0025| C. "essential community provider" means a person | - 1 - 0001| that provides a significant portion of its health or | 0002| health-related services to medically needy indigent patients, | 0003| including uninsured, underserved or special needs populations; | 0004| D. "health care facility" means an institution | 0005| providing health care services, including a hospital or other | 0006| licensed inpatient center, an ambulatory surgical or treatment | 0007| center, a skilled nursing center, a residential treatment | 0008| center, a home health agency, a diagnostic, laboratory or | 0009| imaging center and a rehabilitation or other therapeutic | 0010| health setting; | 0011| E. "health care insurer" means a person that has a | 0012| valid certificate of authority in good standing pursuant to | 0013| the New Mexico Insurance Code to act as an insurer, a health | 0014| maintenance organization, a nonprofit health care plan or a | 0015| prepaid dental plan; | 0016| F. "health care professional" means a physician or | 0017| other health care practitioner, including a pharmacist, who is | 0018| licensed, certified or otherwise authorized by the state to | 0019| provide health care services consistent with state law; | 0020| G. "health care provider" or "provider" means a | 0021| person that is licensed or otherwise authorized by the state | 0022| to furnish health care services and includes health care | 0023| professionals, health care facilities and essential community | 0024| providers; | 0025| H. "health care services" includes physical health | - 2 - 0001| services or community-based mental health or developmental | 0002| disability services, including services for developmental | 0003| delay; | 0004| I. "managed health care plan" or "plan" means a | 0005| health benefit plan of a health care insurer or a provider | 0006| service network that either requires an enrollee to use, or | 0007| creates incentives, including financial incentives, for an | 0008| enrollee to use health care providers managed, owned, under | 0009| contract with or employed by the health care insurer. | 0010| "Managed health care plan" or "plan" does not include a | 0011| traditional fee-for-service indemnity plan or a plan that | 0012| covers only short-term travel, accident-only, limited benefit, | 0013| student health plan or specified disease policies; | 0014| J. "person" means an individual or other legal | 0015| entity; | 0016| K. "primary health care clinic" or "clinic" means | 0017| a nonprofit community-based entity established to provide the | 0018| first level of basic or general health care needs, including | 0019| diagnostic and treatment services, for residents of an | 0020| underserved health care area as defined in rules adopted by | 0021| the department of health; and | 0022| L. "provider service network" means two or more | 0023| health care providers affiliated for the purpose of providing | 0024| health care services to enrollees on a capitated or similar | 0025| prepaid, flat-rate basis. | - 3 - 0001| Section 3. MEDICAID MANAGED HEALTH CARE PLAN OPERATIONS-- | 0002| ENROLLMENT RESTRICTIONS--ADMINISTRATIVE ABUSES--PROFITS LIMITED.-- | 0003| A. Except as otherwise provided in the Medicaid | 0004| Managed Care Act, the department shall monitor each managed health | 0005| care plan offered through the medicaid program and take all | 0006| reasonable steps necessary to ensure that each plan operates | 0007| fairly and efficiently, protects patient interests and fulfills | 0008| the plan's primary obligation to deliver high-quality health care | 0009| services. The department, in cooperation with the department of | 0010| health, shall be responsible for quality assurance and utilization | 0011| review oversight of medicaid managed health care plans. | 0012| B. No managed health care plan offered through the | 0013| medicaid program may directly recruit new members for enrollment | 0014| into the medicaid program. All enrollment of eligible persons | 0015| into the medicaid program shall be arranged directly by the | 0016| department. | 0017| C. The department, through its own offices and | 0018| employees, joint powers agreements with other state agencies or by | 0019| contract with one or more brokering agencies independent of any | 0020| managed health care provider, shall fully inform medicaid-eligible | 0021| persons of their choices for enrollment into a managed health care | 0022| plan. The department shall ensure that the enrollment process | 0023| includes adequate time and information for enrollees to make | 0024| informed choices about a plan. No plan offered through the | 0025| medicaid program shall enroll medicaid recipients into its managed | - 4 - 0001| health care plan unless the enrollment is in accordance with | 0002| arrangements approved by the department. | 0003| D. The department shall regulate the marketing | 0004| activities of managed health care plans offered through the | 0005| medicaid program and prevent administrative abuses in the | 0006| operation of the plans. | 0007| E. A plan offered through the medicaid program shall | 0008| be required to maintain a medical loss ratio of at least ninety | 0009| percent, so that, at a minimum, ninety percent of all premium | 0010| dollars collected are paid for the direct provision of health care | 0011| services. The department of insurance shall adopt rules to define | 0012| the medical loss ratio consistent with the provisions of this | 0013| subsection. | 0014| Section 4. SPECIALIZED HEALTH CARE PROGRAMS--ESSENTIAL | 0015| COMMUNITY PROVIDERS.--Except as otherwise provided in the Medicaid | 0016| Managed Care Act, until January 1, 2000, no plan offered through | 0017| the medicaid program shall offer specialized behavioral or | 0018| developmental disability health services. The provisions of this | 0019| section apply to the specialized health care services needed for a | 0020| person treated for a developmental disability, a developmental | 0021| delay, a seriously disabling mental illness, a serious emotional | 0022| disturbance, physical or sexual abuse or neglect, substance abuse | 0023| or other behavioral health problem as defined in rules adopted by | 0024| the department of health. Those specialized behavioral or | 0025| developmental disability health services shall instead be | - 5 - 0001| provided, until January 1, 2000, only by providers, including | 0002| essential community providers, that have been determined pursuant | 0003| to rules adopted by the department of health or the children, | 0004| youth and families department to be qualified to offer specialized | 0005| behavioral or developmental disability health services. | 0006| Section 5. HEALTH CARE PROVIDER PARTICIPATION.--A health | 0007| care provider that meets a medicaid managed health care plan's | 0008| reasonable qualification requirements and that is willing to | 0009| participate in the plan under its established reasonable terms and | 0010| conditions shall be allowed to participate in the plan. | 0011| Section 6. PRIMARY HEALTH CARE CLINICS PARTICIPATION.-- | 0012| A. A plan offered through the medicaid program shall | 0013| be required to use under reasonable terms and conditions any | 0014| clinic that elects to participate in the plan, if the clinic meets | 0015| all reasonable quality-of-care and service payment requirements | 0016| imposed by the plan. The terms shall be no less favorable than | 0017| those offered any other provider, and they shall provide payments | 0018| that are reasonable and adequate to meet costs incurred by | 0019| efficiently and economically operated facilities, taking into | 0020| account the disproportionately greater severity of illness and | 0021| injury experienced by the patient population served. | 0022| B. A plan offered through the medicaid program may not | 0023| limit the number or location of primary health care clinics that | 0024| elect to participate in the plan. | 0025| C. In providing payments under the medicaid program, | - 6 - 0001| the department shall ensure that a clinic that was or would have | 0002| qualified as a federally qualified health center in 1996 under the | 0003| federal Medicaid Act, as defined in 42 U.S.C. Section 1396d(l)(2), | 0004| shall receive one hundred percent reasonable cost-based | 0005| reimbursement for services, as was provided in the federal | 0006| Medicaid Act during 1996 for the centers pursuant to the | 0007| provisions of 42 U.S.C. Section 1396a(a)(13)(E). | 0008| D. In administering the medicaid program, the | 0009| department shall ensure that any program offering managed care | 0010| for participants, whether implemented through a federal waiver, | 0011| block grant or otherwise, shall require each plan to permit | 0012| contracting with each clinic in its service area that was or would | 0013| have qualified as a federally qualified health center in 1996 | 0014| under the federal Medicaid Act, as defined in 42 U.S.C. Section | 0015| 1396d(l)(2), for delivery of covered services at terms no less | 0016| favorable than those offered to other providers in the plan for | 0017| equivalent services. The department shall provide timely payments | 0018| at least quarterly to federally qualified health centers to cover | 0019| the difference between their one hundred percent reasonable costs, | 0020| as was provided in the federal Medicaid Act during 1996 for the | 0021| centers pursuant to the provisions of 42 U.S.C. Section | 0022| 1396a(a)(13)(E), and the payments under medicaid managed care that | 0023| are received by the federally qualified health centers. | 0024| Section 7. INDIAN HEALTH SERVICE.--A Native American | 0025| enrolled in a managed health care plan offered through the | - 7 - 0001| medicaid program shall retain the option of withdrawing | 0002| participation in that plan at any time and may receive services | 0003| directly from the Indian health service or health services | 0004| provided by tribes under the federal Indian Self-Determination and | 0005| Education Assistance Act, the federal urban Indian health program | 0006| or the federal Indian children's program. If an eligible Native | 0007| American chooses the option of receiving services directly from | 0008| the Indian health service or health services provided by tribes | 0009| under the federal Indian Self-Determination and Education | 0010| Assistance Act, the federal urban Indian health program or the | 0011| federal Indian children's program, the managed health care plan | 0012| shall ensure that the Indian health service receives the same | 0013| payment it would have received for the services rendered if the | 0014| patient did not participate in the plan. | 0015| Section 8. UNIVERSITY OF NEW MEXICO HEALTH SCIENCES | 0016| CENTER.-- | 0017| A. A managed health care plan offered through the | 0018| medicaid program shall include participation by the university of | 0019| New Mexico health sciences center. The department shall | 0020| administer a program to ensure the participation includes delivery | 0021| of primary care and tertiary care services and to attempt to | 0022| ensure, to the extent permitted by federal law, that the medicaid | 0023| patient population served by the university of New Mexico health | 0024| sciences center remains at least at a level similar to that served | 0025| by the university of New Mexico health sciences center prior to | - 8 - 0001| implementation of the medicaid managed health care program. | 0002| B. A plan offered through the medicaid program shall | 0003| provide payments to the university of New Mexico health sciences | 0004| center at rates that are reasonable and adequate to meet costs | 0005| incurred by efficiently and economically operated facilities, | 0006| taking into account the disproportionately greater severity of | 0007| illness and injury experienced by the patient population served. | 0008| C. The department shall administer a program and | 0009| cooperate with the university of New Mexico health sciences center | 0010| to ensure an adequate and diverse patient population necessary to | 0011| preserve the health sciences center's educational programs. The | 0012| department shall also ensure continuity of general support under | 0013| the state medicaid program to the university of New Mexico health | 0014| sciences center for medical education and for serving a | 0015| disproportionately large indigent patient population. | 0016| Section 9. PUBLIC NONPROFIT HOSPITALS.-- | 0017| A. A plan offered through the medicaid program shall | 0018| be required to use under reasonable terms and conditions any | 0019| public nonprofit hospital that elects to participate in the plan, | 0020| if the hospital meets all reasonable quality-of-care and service | 0021| payment requirements imposed by the plan. The terms shall be no | 0022| less favorable than those offered by any other provider, and they | 0023| shall provide payments that are reasonable and adequate to meet | 0024| costs incurred by efficiently and economically operated | 0025| facilities, taking into account the disproportionately greater | - 9 - 0001| severity of illness and injury experienced by the patient | 0002| population served. | 0003| B. A managed health care plan offered through the | 0004| medicaid program may not limit the number or location of public | 0005| nonprofit hospitals that elect to participate in the plan. | 0006| Section 10. LAS VEGAS MEDICAL CENTER.--A plan offered | 0007| through the medicaid program that offers mental health services | 0008| shall include participation by the Las Vegas medical center for | 0009| hospitalized care of mental health patients and other health care | 0010| services the center provides. A plan shall provide payments to | 0011| the Las Vegas medical center under reasonable terms and | 0012| conditions. For medicaid-eligible populations, the terms shall be | 0013| no less favorable than those offered any other provider, and they | 0014| shall provide payments that are reasonable and adequate to meet | 0015| costs incurred by efficiently and economically operated | 0016| facilities, taking into account the disproportionately greater | 0017| severity of illness and injury experienced by the patient | 0018| population served. | 0019| Section 11. AUTHORIZATION FOR MEDICAID MANAGED CARE | 0020| CONTRACTS DIRECTLY WITH PUBLIC AGENCIES, HOSPITALS, ESSENTIAL | 0021| COMMUNITY PROVIDERS AND PROVIDER SERVICE NETWORKS.--In | 0022| administering the medicaid program or a managed health care plan | 0023| for the program, the department may contract directly with a | 0024| government agency or public body, public nonprofit hospital, the | 0025| university of New Mexico health sciences center, an essential | - 10 - 0001| community provider or a provider service network. In doing so, | 0002| the department is not required to contract with any such entity | 0003| only through arrangements with a health care insurer. | 0004| Section 12. ENFORCEMENT OF THE MEDICAID MANAGED CARE | 0005| ACT.-- | 0006| A. The department or a person who suffers a loss as a | 0007| result of a violation of a provision in the Medicaid Managed Care | 0008| Act may bring an action to recover actual damages or the sum of | 0009| one hundred dollars ($100), whichever is greater. When the trier | 0010| of fact finds that the party charged with the violation acted | 0011| willfully, the court may award up to three times actual damages or | 0012| three hundred dollars ($300), whichever is greater, to the party | 0013| complaining of the violation. | 0014| B. A person likely to be damaged by a denial of a | 0015| right protected in the Medicaid Managed Care Act may be granted an | 0016| injunction under the principles of equity and on terms that the | 0017| court considers reasonable. Proof of monetary damage or intent to | 0018| violate a right is not required. | 0019| C. To protect and enforce an enrollee's or a health | 0020| care provider's rights in a plan offered through the medicaid | 0021| program, an enrollee and a health care provider participating in | 0022| or eligible to participate in a medicaid managed health care plan | 0023| shall each be treated as a third party beneficiary of the managed | 0024| health care plan contract between the health care insurer and the | 0025| party with which the insurer directly contracts. An enrollee or a | - 11 - 0001| health care provider may sue to enforce the rights provided in the | 0002| contract that governs the managed health care plan. | 0003| D. The court shall award attorney fees and costs to | 0004| the party complaining of a violation of a right protected in the | 0005| Medicaid Managed Care Act if the party prevails substantially in | 0006| the lawsuit. | 0007| E. The relief provided in this section is in addition | 0008| to other remedies available against the same conduct under the | 0009| common law or other statutes of this state. | 0010| F. In a class action filed under this section, the | 0011| court may award damages to the named plaintiffs as provided in | 0012| this section and may award members of the class the actual damages | 0013| suffered by each member of the class as a result of the unlawful | 0014| practice. | 0015| G. A person shall not be required to complete | 0016| available grievance procedures or exhaust administrative remedies | 0017| prior to seeking relief in court regarding a complaint that may be | 0018| filed under this section. | 0019| Section 13. PENALTY.--In addition to other penalties | 0020| provided by law, the secretary of human services may impose a | 0021| civil administrative penalty of up to twenty-five thousand dollars | 0022| ($25,000) for each violation of the Medicaid Managed Care Act. An | 0023| administrative penalty shall be imposed by written order of the | 0024| secretary after holding a hearing as provided for in the Public | 0025| Assistance Appeals Act. | - 12 - 0001| Section 14. RULES.--The department may adopt rules it deems | 0002| necessary or appropriate to administer the provisions of the | 0003| Medicaid Managed Care Act. | 0004| Section 15. EFFECTIVE DATE.--The effective date of the | 0005| provisions of this act is July 1, 1998. | 0006| |