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HMO Party Called Over

January 15, 1997
By: Andy Kravetz
State Capital Bureau

JEFFERSON CITY - Managed care companies were warned Wednesday "the party is over," as a special legislative committee announced its plan to bring the industry under tighter regulation.

"For the HMOs, the party is over. And there's a torpedo headed right for the party barge." said committee member John Griesheimer.

Griesheimer, a Republican House member from Franklin County, along with other members of the joint committee held a news conference Wednesday to discuss the legislative they filed that afternoon.

Business organizations and managed care companies immediately warned the committee's proposals would drive up the cost of health care.

Committee co-chairs Rep. Tim Harlan, D-Columbia, and Sen. Joe Maxwell, D-Mexico, said making sure people knew what their health plan covered or didn't cover was important to any reform package.

"People ought to have the right to know what they are buying," Maxwell said.

Harlan and Maxwell both said they want to give patients and doctors the advantage in dealing with HMOs and other managed care operations.

Managed care seeks to control the cost of health care by limiting when and where a person can receive health care. There are about 2 million Missourians involved in some form of managed care. It is estimated that figure will double in the next few years.

The bill includes all of the recommendations included in the committee's final report last November. Highlights to the bill include:

* Elimination of the immunity of HMOs to malpractice suits and a requirement that all medical directors with managed care companies be licensed to practice medicine in the state.

* Requiring HMOs to pay for an emergency room visit based on the patient's symptoms, not on the final diagnosis.

* Allowing patients to see plan-approved specialists without first getting authorization from their family physician. Managed-care companies use these doctors as "gatekeepers" to reduce costs by limiting patient access to specialists.

Chris Long, a spokesman for Associated Industries of Missouri, said the committee's intentions are good-hearted, but don't fix the problem.

"We are writing legislations based upon isolated, anecdotal evidence rather than on the ones that permeate our health care system," he said. "Until we can decide the differences between the two issues, it is very risky writing encompassing legislation."

Maxwell disagreed, saying, that "the number of witnesses that came forward clearly showed that it wasn't isolated and if it was, then there is plenty of opportunity for people to come forward," referring to upcoming hearings.

Long and representatives from the managed care industry have said that allowing people to pick and chose when they want to go to a doctor or a specialist defeats the principle of managed care.

Mike Winter, a lobbyist for the Missouri Managed Healthcare Association, said the health care industry is changing so rapidly that any reform will be difficult.

He says that market forces have already caused much of the reform that Harlan and Maxwell are seeking.

"The companies out there providing health services are doing the best that they in a changing marketplace," he said.

Harlan said Associated Industries, one of the largest business organizations in the state, has more at stake than just increased premiums.

"Associated Industries is in the HMO business and they have put their interests before that of Missouri consumers," he charged.

In a news release, Long said requiring HMOs to use a "prudent lay person's" definition of an medical emergency would drive up costs by at least 2 percent and as much as 9 percent. Overall, he claims, the financial effect of the bill would be an increase of about 22 percent.

Harlan countered that most HMOs in the state already implement many of the bill's provisions. He used the example of Cigna of St. Louis, which now uses the "prudent lay person's" definition, saying their costs are in line with competitors.

HMOs and other managed care operations should allow better access to physicians, especially in rural areas where people may have to drive hours or wait weeks to see a doctor, according to Maxwell.

"That will go a long way to solving many of the problems," he said.