Executive Summary

The Quality Imperative: Model State Legislation for Managed Care establishes a comprehensive, integrated and uniform approach to providing consumer protections and quality assurance in managed care plans. The Consumer Coalition for Quality Health Care supports this approach for all health care delivery systems.

For the purpose of this report, a broad definition of a managed care plan is employed. A managed care plan is defined as any plan that employs a network of participating providers and guarantees the provision of health benefits to a defined population for a fixed payment. In the model legislation, there are no distinctions between open and closed panel plans, IPA or staff models; any plan that accepts capitated payments for the provision of services to a defined population should be completely responsible and accountable for the quality of health care provided to its enrollees.

The Quality Imperative has seven primary sections:

There is a natural evolution and chronology to the model legislation's component parts. To enter the market, managed care plans must meet certain health plan standards in order to be licensed. The model legislation sets health plan standards, a state licensing process, and enforcement mechanisms for plans that do not comply.

Plans entering the market succeed or fail on the basis of enrollment. The model legislation creates a state health care information system for the purpose of producing annual comparative reports on plan performance. Informed consumer choice guides plan selection and influences enrollment.

Consumers enrolled in managed care plans are entitled to certain rights, none more important than the right to air complaints and appeal plan determinations. This is particularly important in the managed care setting because of the incentives of capitation and the potential for underservice. The model legislation establishes a comprehensive internal and external complaint and appeals system that protects the rights of enrollees to quality service and quality health care.

Consumers enrolled in managed care plans do not have the clinical expertise to evaluate the quality of care provided by health plans, particularly on a systemic basis. Health care plans and practicing health care professionals within plans need to keep abreast of the ever-changing medical knowledge base and need help in identifying best practices. The model legislation creates an independent quality monitoring and improvement program that monitors quality and access to care, assists plans in quality improvement, and holds plans accountable for achieving ever-improving patient care results.

Consumers, unfamiliar with managed care, need help in navigating this new world of health care delivery. The model legislation creates an independent managed care ombudsman program to serve as the consumer's advocate and to assist consumers in selecting plans and understanding their rights and responsibilities as plan members.

Finally, the active participation of all interests in the managed care delivery system should be institutionalized through the establishment of advisory bodies. The model legislation creates a Managed Care Policy Board, led by consumers, to advise the state on the design, implementation and evaluation of the managed care quality oversight system.

Pieced together, the pieces of the model legislation represent a comprehensive approach to common sense regulation and quality oversight of the managed care industry. Any state that enacts the entire model legislation will be assured of establishing the most integrated system of managed care quality oversight found anywhere in the country today.

It is understood, however, that many states pursue incremental strategies or may have already addressed some of the bill's elements. Therefore, each of the six components of the legislation, with minor adjustments, can stand alone as autonomous pieces of legislation.

In deference to each state's organizational structure and diversity, the model legislation does not assign responsibility for the conduct of programs and functions outlined in the bill to specific state agencies or officials. Each state and its consumer advocacy organizations are in the best position to authorize and assign policy and program responsibility based on existing organizational capacities and state laws.


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