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HMO Regulation

February 13, 1996
By: Angie Gaddy
State Capital Bureau

For more details, see the sidebar stories:

  1. Main provisions of HMO bills.
  2. What is an HMO?
JEFFERSON CITY - If Missouri lawmakers need a better understanding about the frustrations Missourians have about HMOs, they need look no further than outside the windows of the Capitol offices.

Less than two years ago, state government moved it's work force into HMOs. Since then, lawmakers have been hearing a growing chorus of complaints.

"If you think of the patient who's on one of these health care plans," said bill sponsor Sen. John Scott, D.-St. Louis. "And then the doctor is frozen out of the plan, then the patient no longer has access to the doctor he has faith in."

Scott's bill is one of more than a dozen bills being introduced which would regulate HMOs - an area that got almost no legislative attention just a few years ago.

One of those patients could be state employee, Aron Wisneski. He's one of the 48,000 state employees enrolled under Missouri's Consolidated Health Care Plan, which offers state employees eight different HMO options and two fee-for-service insurance programs.

He said he thinks Missouri's HMOs need some doctoring. "In our office, we're always talking about the health care plan," Wisneski said. "The general feeling around here is that it is very limiting."

Wisneski began working as a research analyst for the Social Services Department a year ago. That meant signing up for a new health care insurance program. That also meant "major inconveniences," said the 24-year-old University of Missouri graduate.

From having to go through an assigned general practitioner for every visit, to finding a doctor with convenient hours close to his Columbia home, to worrying if his doctor will be able to refer him to a specialist, Wisneski said his health insurance program is too constraining for his needs.

The state-employee health care system does offer less restrictive plans. But that kind of plan would cost Wisneski about $300 a year more for health insurance.

One of Wisneski's biggest complaints about his HMO plan is the requirement that he first see his "primary care physician" before he can go to a medical specialist.

"Once I thought I had pink eye, so I went to my general practitioner, and he prescribed medication," said Wisneski. "After two weeks, it didn't clear up, so I had to be referred to a specialist."

After a bit of hesitation, said Wisneski, his doctor referred him to a specialist. But Wisneski was more upset about what he found out afterward.

"I found out later that HMOs have written contracts with doctors not to refer patients to specialists," he said. If a doctor refers patients too many times, then the doctor could be dropped from the plan.

But health care managers say that's not always the case.

"We've had more problems with the physicians leaving the plans than the plans dropping physicians," said Ron Meyer, director of Missouri's Consolidated Health Care Plan. "To some extent, they (enrollees) have a legitimate concern."

After two years of the state being contracted out through HMOs, the first priority was grappling with the cost of health care. That's why the state has contracted out to the HMO which promised to cost the state the least.

But in the future, when looking at new plans, Meyer said they will also look at the HMO's provider network, customer satisfaction and what doctors on the HMO's list say.

"First we had to get our arms around the cost issue," Meyer said.

If current measures go into law, then premiums will go up, warned Milt Svetanics, a lobbyist for General American Life Insurance.

"It's going to cost the state a lot of money and employers a lot of money," he said.

And, for enrollees like Wisneski, another concern is making sure he can continue seeing the same doctor.

From one year to the next, there's no guarantee which doctors will be covered by a particular HMO.

"I grew up going to the same doctor," Wisneski said. "Now I'm taking care of my own health care needs. For some state employees the system encourages jumping from HMO to HMO because of changing cost schedules."

Since Missouri contracts to the lowest bidder for HMO programs annually, the doctors on the lists can change, depending which group has contracted with certain doctors.

Down the street at the Capitol, consumers and doctors echo the same concerns.

"In essence (HMOs) are turning health care into a commodity," said Peter DeSimone, executive director of Missouri Association of Social Welfare, a social-welfare lobbying group. "When in fact, it (the health-care choice) is very private and intimate."

He said the state is not doing a thorough enough job regulating the HMO explosion. HMOs are making the decisions doctors and patients should be making, he said. There's no state regulation keeping HMOs from kicking doctors off lists and kicking patients out of beds, he said.

"So, in this situation, it's our typical way to turn to the government and say, `Help Us,'" he said.

An unusual coalition of both Democratic and Republican lawmakers agree.

Legislative bill sponsors say the measures they propose would give both doctors and patients more levering power.

For example, in "The Patient Fairness Act" sponsored by Sen. Jet Banks, D-St. Louis, HMOs would be required to disclose information to enrollees. Presently, HMOs are not required to give out information on the terms and conditions of the plan.

But the insurance industry said if it is required to disclose information and open up application processes to all doctors, then the industry would loose the power of negotiating prices. That's what keeps the health-care costs down.

"Essentially, we feel it will dismantle competitive bidding," said Ron Casteel, spokesperson for Missouri Consolidated Health Care Plan.

The small business community argues regulatory bills will hurt them, too.

"The people who will end up paying the price will be the business community," said Dan Mehan, a lobbyist for Missouri Chamber of Commerce. He said businesses have to be able to offer health insurance to employees to remain competitive in attracting employees. "It's a necessary thing to have now," he said.

But this is not just a business issue, according to the sponsor of one of the HMO-regulation bills.

Sen. Betty Sims, R-St. Louis County, HMOs need more regulation because of Missouri's Medicaid program. The state contracted out seven different HMO plans in 1994 for the program which finances health care for the low income.

"We have contracts with those who now have their own insurance. They carry their own cards. This is a whole new world for them. Wouldn't it be great if they could read and understand it?," she said.

Another Republican bill sponsor agrees.

Sen. Ted House, D-St. Charles County, has introduced legislation, which would require HMOs to set "community ratings" as well as include enrollees with pre-existing conditions.

"My biggest concern is that the people know what they're getting with their insurance," House said.

Instead of being allowed to set different rates for pre-existing conditions, HMOs would only compete on age and location of the clients.

But, he added those that are healthy will be paying higher premiums. "That means 55-year-old men will be paying for maternity coverage, and others will be paying for coverage for 55-year-old men," House said.

The Insurance Department would be required to increase regulation.

"If legislature wants to give us authority on that, that's fine, " said Jay Angoff, director of the Insurance Department. "We don't heavily regulate."

He said his department regulates Missouri's 30 HMOs by the number of doctors and hospitals the HMO includes and the amount of money an HMO has in the bank - but not rate regulation.