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HMO Regulation Dead

By: JASON CALLICOAT
State Capital Bureau

May 04, 1995

JEFFERSON CITY _ Legislative efforts to regulate health maintenance organizations have been declared dead for the 1995 session.

After a failed attempt Wednesday night (May 3) to pass his HMO regulation bill by tacking it onto another bill, Sen. John Scott, D-St. Louis, conceded defeat.

"The bill is dead," Scott said.

The Patient Fairness Act would require Health Maintenance Organizations to explain their benefits plans to enrollees in easily understood terms.

The bill would also require HMOs to accept applications from all physicians in their geographic area and inform applicants of the reasons used if they are rejected.

Scott's measure is still bottled up in the House Insurance committee, which Scott blames on the power of the insurance industry and its lobbyists.

"They hired lobbyists from the length and breadth of the entire United States," Scott said. "They came in by the planefull to be against that bill."

One lobbyist agreed that stopping this legislation outright, rather than reaching a more acceptable compromise, was the industry's intent from the beginning.

"We worked damn hard to kill it," said Randy Scherr, a lobbyist for Prudential Insurance Company. "It was full of problems. It was technically flawed, and it was costly."

HMOs objected to giving up their complicated and confusing policy descriptions, Scott said.

"They think its just terrible that we'd pass legislation to make them print a plain language policy that you or I could understand."

But the plain language clause in the bill is a minor provision, and is not the target of the insurance industry opposition, Scherr said.

"We don't have any concern about giving them that," Scherr said. "But it's just a shroud the doctors are putting over this bill to make it look better. This is not a patient protection act, it's a doctor protection act."

The main objection HMOs have to the bill stems from the cost of implementing its requirements for the physician application process, Scherr said.

"Why should a network take applications from 1200 physicians if it doesn't need any more?" Scherr asked.

"And then to require all the decisions to be made on the record, that carves out special rights for doctors that no other employee in the state has," he said. "All this bill does is increase the cost of health care."

Scott said he had not ruled out re-introducing the Patient Fairness Act in the next legislative session.

Scott had tried a last-ditch effort in the Senate to save the bill by offering an amendment that would have added it to a House-passed bill on flexible health plans for state government workers.

But Scott's amendment was ruled out of order by Senate President Pro Tem Jim Mathewson, D-Sedalia, as going beyond the scope of the bill before the Senate.