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HMO Regulation Rejected

State Capital Bureau

March 02, 1995

JEFFERSON CITY _ The Missouri Senate has rejected a proposal that would have prohibited HMOs from dropping physicians without cause _ forcing their patients to find new physicians.

The proposal was contained in an HMO regulation bill still pending before the Senate.

On Wednesday (March 1), the Senate adopted an amendment that removed from the bill a section that would have prohibited HMOs from dismissing their physicians without cause.

"I was concerned that the language as it was written would have prohibited them from having a contract for a certain term of years," said the amendment's author, Sen. John Schneider, D-St. Louis County.

"An organization would be required, effectively, to keep (a physician) for life," Schneider said.

But C.C. Swarens, executive vice president of the Missouri Medical Association, disagreed with Schneider's interpretation of the bill's language.

"Just read it; it doesn't say that," Swarens said. "It doesn't say they can't terminate (physicians). They just can't terminate them without cause."

If physicians are to be terminated during the term of their contract, there should be cause, Schneider said, but that is a different issue.

"I seriously question whether you can cancel a physician without cause, anyway," Schneider said.

But Swarens disagreed. Currently, HMOs can terminate physicians' contracts without cause and "they do it all the time," Swarens said.

"Most contracts are written so they can be terminated by the HMO or the physician with 30 days notice," he said. "A physician will just get a letter that says, `Effective April 1, you are no longer with (our) HMO.' It doesn't say why; it doesn't say anything."

The provision to prohibit physicians' contracts from being terminated without cause was an important part of the bill, not just for physicians, but for patients, Swarens said.

"Last year, one Kansas City HMO slashed several hundred providers in one month's time," Swarens said. "Think of all the patients that affected. It sent them scrambling to find other physicians."

The medical association has not determined exactly how it will proceed, Swarens said, but it will be discussing the amendment with Schneider and the bill's sponsor, Sen. John Scott, D-St. Louis.

"Other than that, we think the bill is in pretty good shape," Swarens said.

The bill still would require HMO plans to allow all providers in their geographic area to apply, if the HMO usually contracts with that type of provider.

Plans also would have to provide applicants with the reasons used if they are rejected, and must explain benefits packages to enrollees in easily understood terms, according to the bill.

The Senate has not taken final action on the bill.