State 'Mandatory Assignment' laws gain ground: Laws also target prompt payment

OB/GYN News, March 15, 2002 by Joyce Frieden

WASHINGTON -- Whether they join provider networks or not, health plans in Alabama and Alaska will pay physicians directly for their services this year, thanks to new laws passed in those states.

Susan Laudicina, director of state services research at the Blue Cross and Blue Shield Association, finds these "mandatory assignment" laws disturbing. "This is troublesome because it [undermines] health care networks," she said at a press briefing sponsored by the association.

Not only do nonnetwork physicians now get paid directly by the plans, but unlike in-network providers, they can also bill patients for the remainder of their charges, even above what the plan allows. Ms. Laudicina predicts that 13 more states will debate such measures in 2002. (New Jersey passed a similar measure last year, but it applies only to dentists.)

Health plan liability is another issue that Ms, Laudicina expects state legislatures to take up. Last year, four states passed laws allowing consumers to sue their health plans under certain circumstances; this year, she expects eight more states to consider similar measures. In two of the states with new liability laws--Oregon and West Virginia--consumers may sue only if the health plan fails to abide by the decision of an independent review authority.

Prompt payment laws--another favorite topic for legislators--saw a lot of action last year. The laws require insurers to pay "clean" claims within a certain time frame or face monetary penalties. Thirty-one states debated prompt payment bills last year, with 15 new laws passed. Now, Idaho and South Carolina are the only states without a prompt payment law on the books, according to Ms. Laudicina.

On the consumer front, laws to increase the number of low-income residents enrolled in publicly funded health plans--such as Medicaid and the State Children's Health Insurance Program--are usually high on state lawmakers' "to-do" lists. But the recent economic downturn may prevent some of states from expanding these programs, Ms. Laudicina said. Last year, 19 states passed laws increasing publicly funded health care coverage, but this year, only 10 states are likely to seek such expansions.

Access to prescription drugs will be another focus for state lawmakers. Last year, 13 states passed laws expanding financial assistance programs for the elderly and low-income populations, as well as increasing the size of prescription drug purchasing pools. This year, Ms. Laudicina expects nine states to take up similar measures.

As always, mandated offerings legislation--provisions that require insurers to either offer coverage for or to cover particular treatments and procedures--will be discussed in many state houses. In particular, mental health care parity could see a lot of action this year, with 17 states likely to take up the issue, Ms. Laudicina said. Coverage for treatment of infertility procedures like in vitro fertilization is also expected to be debated.

Although more than 1,400 state-mandated benefits are currently on the books, none can be enforced with many large, multistate health plans, which are covered by a federal law known as the Employee Retirement Income Security Act (ERISA). Plans covered by ERISA are exempt from most state laws relating to health insurance coverage.

States With the Highest Number of Mandated Benefits (*)

Maryland        52
Texas           45
Florida         44
California      43
Connecticut     43
Nevada          42
Minnesota       42
Virginia        40
Utah            36
New York        36
North Carolina  36
Arizona         34
Maine           34
Massachusetts   34
New Mexico      33
Montana         32

(*)Includes mandated offerings.

Source: Blue Cross and Blue Shield Association 2001 Survey of Plans