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SPONSOR: |
HBIC |
DATE TYPED: |
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HB |
631/HBICS |
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SHORT TITLE: |
Rural Health Care Provider Access Act |
SB |
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ANALYST: |
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APPROPRIATION
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Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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Indeterminate
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See Narrative |
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Responses
Received From
Health
Policy Commission (HPC)
Department
of Health (DOH)
SUMMARY
Synopsis
of Bill
The House Business
& Industry Committee Substitute for House Bill 631 modifies the New Mexico
Insurance Code to prohibit the exclusion of a health care provider from a
provider service network. Any provider has the right to participate under a
provider service network if the provider is willing to operate under the same
terms and conditions as those offered to any other provider.
The provisions of the
bill covers any person licensed as a physician, dentist, osteopathic physician
and a certified nurse practitioner.
The bill applies only to rural areas.
Bernalillo, Dona Ana,
A health care insurer
may also refuse to contract if the provider network already has reasonable
access for its members and the insurer is not acting unreasonably or
arbitrarily to exclude the provider.
The bill states that if
a provider believes that an insurer has refused to contract in violation of the
Act, the provider may file a complaint with the Superintendent of Insurance. If
the Superintendent believes there is reasonable cause for a violation, then the
Superintendent shall hold a hearing and enter an order as he deems
necessary.
Significant
Issues
HB 631/HBICS is
referred to in the health care and health insurance business as Any Willing
Provider (AWP) legislation. Consumer choice is a public policy objective served
by AWP laws. Access to care is as well enhanced through AWP laws.
Accountability, efficiency and health care cost containment are also public
policy objectives. Consumer and provider choice must be balanced with
accountability, efficiency and cost containment. Those are the fundamental
issues behind an AWP law.
Providers advocating
AWP legislation claim that a Managed Care Organization’s (MCO) emphasis on the
bottom line threatens quality care. Such laws will restore the emphasis in the
practice of medicine to patient care and restore a true doctor-patient
relationship without interference by a third party such as a clerk of an MCO
telling the physician or other provider how to practice medicine.
The HB 631/HBICS could
enhance choice for consumers because they will be permitted to choose their own
providers who are practicing in an area, but not currently part of a health
plan’s or organization’s provider net-work. In rural locations, this could
improve access to care by not forcing patients to seek care out-of-town, where
their insurance plan has a provider.
The HB 631/HBICS could
help improve rural
The bill could also improve
access throughout
Opponents believe AWP
laws undermine managed care’s ability to control the cost and quality of
clinical services provided to its members.
Managed care organizations rely on utilization review and other quality
assurance programs to ensure that patients receive high quality, cost-effective
care. These programs could lose their
effectiveness if managed care cannot selectively contract with providers who
satisfy the plan’s quality requirements and whose performance can be regularly
monitored by the plan.
The HB 631/HBICS could
result in increased costs to the health care system. Managed care plans achieve cost saving by
selective contracting and minimizing administrative overhead by utilizing a
selected network.
Estimates vary on how
much AWP laws increase costs, according to the National Council of State
Legislatures. Some studies have said the AWP statutes increase administrative
costs by 34% to 52%. Others said the laws increase HMO costs by 5.8% to 18.4%.”
HB 631/HBICS may be
viewed as a precedent-setting intrusion into the affairs of a business organization,
with legislation requiring an organization to do business with entities that
they choose not to do business with.
TECHNICAL ISSUES
The HPC notes HB
631/HBICS may be excluding Los Lunas and northern
OTHER SUBSTANTIVE ISSUES
Fee-for-service
medical care allows individuals to receive medical care from their provider of
choice. Under this model, individuals chose their health care provider, receive
care, and the provider bills an insurance plan on the basis of service
provided.
The emergence of
managed care organizations such as HMOs and PPOs narrowed and, in some cases,
eliminated this ability to choose one's health care provider. MCOs entered the
health care marketplace promising to reduce costs. MCOs maintain that the
primary way to cut costs is by purchasing medical care in bulk by creating
panels of selected providers who are promised patient volume in return for
reduced prices.
MCOs manage costs by
implementing cost-control mechanisms, such as utilization re-view. Central to
the concept is a limited and highly managed provider panel, composed of selected
high quality providers willing to accept reduced fees and utilization controls
in return for a promised volume of patients.
At the same time,
carefully developed and selected networks of providers have limited provider
panels to promote accountability and efficiency. By limiting the number of
providers in a network, managed care organizations such as Health Maintenance
Organizations (HMOs) and Preferred Provider Organizations (PPOs) are able to
reduce administrative costs related to developing contracts, to monitor and
better manage care with providers, to negotiate lower rates by offering a
higher volume of patients, and to possibly enhance the quality of care through
selective contracting of who is in their net-work.
Many employees, with
some exceptions, are offered only one or two health plans by their em-ployer.
Employees usually have little or no input into selecting the plan. More
economically for-tunate workers do have options and tend to choose their health
plan based on affordability and the ability to keep their own physician. Unfortunately
for many people, the only real decision is whether to pay extra to receive the
convenient, quality care of their choice or to have to change physicians to
have insurance coverage.
The Robert Wood
Johnson Foundation funded a study of the effect of AWP and freedom of choice
laws on HMOs. The researchers found that AWP laws are typically enacted in
states with little managed care activity, suggesting that states adopt them
proactively as a tool to curb managed care growth. The results showed that AWP
laws pertaining to physicians reduced HMO penetration. In addition, AWP laws
pertaining to hospitals significantly increased HMO administrative costs. The
laws, however, do not appear to have decreased the number or type of managed
care plans offered by employers or increased the premiums.
Several other states
have already passed AWP legislation including rural Western states such as
AMENDMENTS
· The HBIC Substitute for HB631
narrowly defines health care providers. It does not men-tion hospitals,
pharmacies, independent physical therapists, outpatient laboratories or
ra-diology centers, ambulatory surgery centers, home health agencies, hospices,
and others medical providers. If the intent of the bill is to improve access
for rural consumers, the HBIC substitute for HB631 may not go far enough to
provide comprehensive access. With the bill it is possible to have physicians,
nurse practitioners and dentists in a rural community be part of a provider network,
but the consumer may have to leave town for services beyond those provided by
physicians, nurse practitioners and dentists.
· The HBIC Substitute for HB631 could
define reasonable access in a manner similar to that which has previously been
in place for the Salud MCO program for Medicaid. Those standards are as
follows: 90 % of urban residents must travel no longer than 30 minutes to see a
PCP (Primary Care Physician); 90 % of rural residents must travel no more than
445 minutes to see a physician; and 90% of frontier residents must travel no
more than 60 minutes to see a physician. Urban counties are Bernalillo,
· The HBIC Substitute for HB631 could
be re-worded to insure inclusion of northern