Not content with the numerous piecemeal victories they achieved in 1996, advocates of regulating health plans this year are introducing--and in some cases helping pass--comprehensive reform bills in legislatures across the country.
At least 31 states have introduced comprehensive legislation to regulate HMOs, says Molly Stauffer, policy specialist at the Health Policy Tracking Service of the National Conference of State Legislatures in Washington.
Such legislation typically covers a range of issues including consumer grievance procedures, emergency-care service, solvency, gag clause bans, performance outcomes, access to primary care and other providers, and minimum healthcare services.
The number of states that will succeed in enacting wholesale legislation is difficult to predict, but some states, such as New Jersey, have already signed bills into law. Indeed, every state except Kentucky, which is out of session this year, has introduced at least one bill to regulate health plans.
The shift from piecemeal to comprehensive reform has its roots in attitudes and legislation that arose in 1995 and 1996. Those years could be characterized as "anti-managed care," Stauffer says. But now the attitude has moved into "an era of consumer rights, or protection," she says. "We see legislatures trying to find a balance between cost savings and quality."
Why the changing attitude? "Some of the sponsors of this legislation feel that a comprehensive bill is a better way to do public policy," Stauffer says. Legislators have told her that they are realizing "they can't make decisions disease by disease."
Another reason behind the move to wholesale reform is the success provider and consumer groups enjoyed last year, says Carol O'Brien, division counsel for patient advocacy of the American Medical Association in Chicago.
"In 1996, nearly half of all the states passed some kind of law that would prohibit health plans from gagging physicians. That was an amazing phenomenon," O'Brien said. "States buoyed by the success of the piecemeal legislation are entering a new phase . . . taking on larger, more complex types of bills aimed to more broadly address systemic problems."
Still, there is plenty of legislation today that attacks individual issues. For example, by the end of April, 25 states had enacted provisions to allow patients direct access to obstetric and gynecological care, up from 20 at the end of 1996. At least six other states that had no laws regulating access to this type of care have introduced such legislation.
One of the new areas legislators are seeking to regulate this year is guaranteeing health plan enrollees access to care outside of the authorized health plan network, Stauffer says. Five states have already enacted legislation that mandates health plans must offer point-of-service options, and 28 states have introduced similar legislation.
Disclosing financial incentives between health plans and providers is also a hot topic. For example, Ohio has introduced a major protection bill that prevents providers that deny or withhold treatment from being paid to do so.
The Louisiana Senate, for its part, passed a bill at the end of May that precludes HMOs and insurers from paying incentives to providers as inducements to deny or limit medical services.
All told, 800 to 900 healthcare-related bills were introduced in state legislatures in the first four months of 1997, compared with 1,200 to 1,300 bills for all of 1996. Given current trends, the number of bills introduced in 1997 will almost surely surpass last year's total, Stauffer says.
While much legislation is being written and some is being passed, it's unlikely to have much of an effect on health plans, says Paul Ginsburg, president of the Center for Studying Health System Change in Washington.
"The events of the past year have set very specific limits on physician discretion, which I personally think is not a very effective way to go," Ginsburg says. Though for the most part, the specific limitations "aren't a big threat to the health plans," the piecemeal provisions that have passed might come to haunt providers who lobbied for them.
Ginsburg suggests that as medical technology and patterns of practice change, doctors might be hampered in improving patient care because of the laws.
Moreover, health plans are insisting that legislation aimed at them also be applied to provider organizations, which doctors and hospitals would find burdensome.
But a particular type of legislation--any-willing-provider laws--could pose much more of a problem for health plans, Ginsburg says. Such laws require health plans to accept any provider that meets their participation criteria. The AMA reports that 31 states have any-willing-provider laws of various kinds.
One of the country's most comprehensive state any-willing-provider laws, which was enacted by the Arkansas Legislature in 1995, was struck down by a federal judge earlier this year.
If and when these bills are enacted into law, health plans will lose a substantial portion of their power to pick doctors and to pressure them to accept lower fees in exchange for more business, Ginsburg says.
The tensions among provider, consumer and health plan interests seen in state capitals around the country are the natural result of the growth in market share of health plans, says Herb K. Schultz, director of state advocacy, American Association of Health Plans in Washington.
But rather than pursue the go-it-alone strategy they have pursued in the last few years, these forces are coming together.
"I do see a growing trend that the providers and consumers and plans are working much closer together than they've ever worked before," Schultz says.
Legislators are also getting the message, according to Ginsburg. "It's much more encouraging to take this comprehensive approach," he says, because insurers, for example, would likely be willing to accept provisions that outlaw egregious behavior in the hope that the industry as a whole would benefit.
"Compromise is a lot easier to achieve than these disease-of-the-month bills," Ginsburg says.
Howard Isenstein is a Washington-based freelance writer.