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ROSALIND FRANKLIN UNIVERSITY OF MEDICINE AND SCIENCE

Medical Practice Strategies: Systems Based Practice - Business Laws Ethics

Janet Lerman, J.D.

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Class 10 - STATES

Many states have taken it upon themselves to create laws dealing with various healthcare issues. Some of the issues dealt with in state law later may become part of federal laws and vice versa, such as some federal laws may then become part of state laws.

Some states created laws to help women get longer lengths of stay in hospitals from their HMOs than women did prior to the enactment of such laws. These type of laws were commonly known as "drive through delivery" laws, to protect women from having to have a drive through delivery process in giving birth at hospitals. These type of laws came into effect when some HMOs allegedly were only providing, for example, two hours worth of coverage for child birth at a hospital. These type of laws set a designated time frame requiring HMOs to cover for child birth, such as 24 hours for vaginal deliveries and 48 hours for caesarian section deliveries.

Not all states have the same laws, though all states must comply with and abide by federal laws.

Patient Protection and Patient Rights Laws

Some states passed laws dealing with patient protection and patient rights while federal proposed patient's bill of rights types of laws remain pending in the United States Congress.

For Illinois, Managed Care Reform and Patient Rights Act, see Public Act 91-0617. Some interesting sections to note include:

Section 35. Medically appropriate health care protection - (b) This is basically a section stating the Illinois public policy that health care providers are to be patient advocates. This section states that it "is the public policy of the State of Illinois that a health care provider be encouraged to advocate for medically appropriate health care services for his or her patients." In this section look at Protest decisions, reasonable peer review, etc.

Section 40. Access to specialists. See re: standing referral, etc.; provide regular updates to the enrollee's primary care physician.

Section 45. Health care services appeals, complaints, and external independent reviews. See re: (b) (ii) "a treatment referral, service, procedure, or other health care service, the denial of which could significantly increase the risk to the enrollee's health, the health care plan must allow for the filing of an appeal either orally or in writing." Basically, then the health plan is to notify the party filing the appeal within 24 hours after the submission of the appeal of all information the health plan requires to evaluate the appeal and the the health plan must render a decision on the appeal within 24 hours after receipt of the required information.

Any Willing Provider Laws

Some say the "Any Willing Provider" type of legislation were the first type of laws in the managed care era created to help physicians, even though the help may have been minimal.

Any Willing Provider laws force managed care organizations to contract with any providers willing to agree to their contract terms. Anyone can write contracts that exclude most providers in favor of a few. For example, there could be requirements for physicians to have offices in buildings at specific addresses during specific hours with specific staff and specific years of experience and board certified. Another example could be requirements for hospitals to offer specific services within a certain distance of a specific bus stop.

The effect on physicians appears to allow physicians to have the right to contract with managed care organizations. The effect on managed care organizations is that most likely managed care organizations will find ways around any willing provider type laws.

Silent PPOs

A silent PPO is an unauthorized entity using information that it has access to for its own benefit, such as a third party administrator having knowledge of provider's rates and automatically paying providers lowest rates based on contracts not applicable to the services rendered. In this example, many providers are not equipped to identify this problem of receiving reduced rates that they have not agreed upon because the provider has other contracts referring to that amount. In this example, the third party administrator is acting like a hidden PPO, hence the term "Silent PPO"

Some states may have laws to protect providers from situations in which providers are not properly paid due to the wrongful actions of the payor or agent of the payor. For example, in situations commonly known as "Silent PPOs" a third party administrator ("TPA") may be handling multiple PPO accounts and know the lowest rate participating providers have agreed to and automatically apply that rate even for payors not contracted with such providers. Then, unless the provider's internal accounting system is able to identify/ audit and correct that error the provider is being paid at the wrong lower amount than such provider originally agreed to. Some State Departments of Insurance may come to the aid of the Provider in such "Silent PPO" situations as the TPA may be a licensed entity by the state. Additionally, some providers have been successful in litigating this type of matter around the country.