Many of the new state laws passed this year and last to rein in HMOs' perceived abuses were driven by providers or citizens groups. But in Minnesota, one of the most active parties behind the state's new Patient Protection Act surprisingly was the Minnesota Council of Health Plans.
Minnesota's HMOs figured they would fare better viewed as leaders rather than as obstacles, said Michael Scandrett, executive director of the council, which represents all 10 plans operating in Minnesota.
Working with several consumer groups, the council introduced a broad consumer protection bill. Signed into law last month, it requires 24-hour emergency-care coverage and outlaws gag clauses on contracting providers (See chart, p. 56).
As of mid-June, 10 states, including Minnesota, had adopted laws during their 1997 legislative sessions to protect consumers from managed care, according to the Health Policy Tracking Service of the National Conference of State Legislatures. That brings the total number of states with such laws to 23, the service said (See chart below).
At least 16 other states considered similar proposals, but they didn't survive the session. As of June 12, bills in about five states were awaiting action by the governors, according to the tracking service.
The bills are known as "Patient Protection Acts" or "Managed Care Consumers' Bill of Rights." They frequently ban gag clauses, require the disclosure of financial incentives paid to providers and require plans to establish enrollee grievance systems.
Shortly after the managed-care council in Minnesota introduced its version of the bill, two others followed.
Scandrett said all three bills covered the same themes: preservation of communication between physicians and patients; disclosure of financial incentives; and the availability of information to help healthcare consumers make choices.
All three were designed in counsel with the state attorney general and special-interest groups representing labor and consumers.
"None of these concepts were controversial in principle," he said. "It was all `devil in the details.' "
For example, consumer advocates wanted managed-care plans to disclose their payment methods for specific providers when people first enrolled. But some plans use so many payment methods, they don't know what will be in place until enrollees pick their providers, Scandrett said.
The council explained the problem. The result was a compromise that requires plans to provide general information on enrollment and more specific information later on request.
"Right now, as I read the national scene, there is a complete disconnect between the consumer groups and the industry," Scandrett said. "Once you sit down with the groups, you suddenly have a much narrower range of disagreement."
State Sen. Linda Berglin (D-Minneapolis) said that although consumer groups didn't get as much as they would like, "with the HMO group committed to passing a bill this year, we probably got more than we might have."
But Minnesota's managed-care industry did get one back from providers. A provision of the new law repeals the state's 3-year-old healthcare antitrust exemption law.
That law gave healthcare providers in the state antitrust exemptions for mergers and acquisitions in exchange for certain regulatory restrictions on their behavior. The law, in effect, allows providers to consolidate their market share, increasing their ability to fend off discount-seeking managed-care plans.
The exemption has been awarded only once, in 1994 to HealthSpan, which is now a division of Allina Health System. Because of the exemption, the state attorney general didn't challenge the creation of HealthSpan, which then controlled about 28% of the Twin Cities' acute-care hospital market.
In exchange for antitrust clearance, the state required Allina to regularly report to the state health department how it was improving quality and access while passing on the promised cost savings of its consolidation to consumers.
An Allina spokeswoman said the system doesn't fear the repeal of its exemption because time has proved the consolidation to be beneficial to consumers and unlikely to be challenged by the state on antitrust grounds. The repeal means Allina no longer has to submit performance reports to the state.
