Summary of Section Six  MANAGED CARE POLICY BOARD

Background - The full, democratic, engagement of the citizenry in public policy debates and the implementation of public programs is an accepted principle, if not practice, in this country. It is quite common and expected for government to institutionalize the participation of interested parties and experts when crafting legislative proposals or designing public programs through the mechanism of advisory commissions, boards and committees.

With the ascendancy of managed care both in the commercial health insurance market and in the Medicaid program, governors throughout the nation are appointing advisory committees to help the state develop, implement and evaluate managed care reforms. Washington, Maryland and Utah are a few of the states that have organized state health care policy commissions to ensure the active involvement of all affected parties in reform initiatives.

Additionally, governors often appoint a citizen's advisory committee when developing a state's waiver application to the federal government for starting or expanding Medicaid managed care. New York, for example, created a Medicaid Managed Care Advisory Committee to advise the state on the waiver application and program implementation.

At the federal level, President Clinton recently announced the formation of an Advisory Commission on Consumer Protection and Quality in the Health Care Industry. It is clear from Administration sources that this initiative was established to address growing public concerns over managed care. The Commission shall be composed of not more than 20 members to be appointed by the President. The members will be consumers, institutional health care providers, health care professionals, other health care workers, health care insurers, health care purchasers, state and local government representatives and experts in health care quality, financing and administration.

Consumer representatives are regularly included in state and federal health policy advisory initiatives but their participation is typically overwhelmed by the interests of plans, providers and the organized purchaser community. Because the ultimate customer of any managed care reform is the health care consumer, consumer representation on health policy advisory entities needs to be expanded and their participation better informed by education and training.

Conclusion - The institutionalization of citizen participation in health care policy debates and programmatic initiatives through advisory bodies is a well established principle. The advent of managed care as the dominant health care delivery and financing system in this country will likely spark the establishment of managed care policy entities at all levels of government. Consumer participation and leadership in these advisory bodies is imperative to ensuring that consumer interests and quality care is at the center of the policy debate.

Model Legislation Highlights

Specific functions of the Managed Care Policy Board include: providing review and comment on the planning, policy development, program design and evaluation of all provisions of this Act; recommending specific new standards for managed care plan licensing; recommending additions and modifications to the annual consumer guide; and recommending new functions for the independent quality monitoring and ombudsman programs. The Board is also responsible for reviewing state evaluations of the managed care regulatory and quality oversight system for the purpose of recommending needed policy and program revisions.

Finally, the Board is empowered by the state to conduct important managed care policy studies that contribute to the effective implementation of state managed care regulation. The model legislation specifically requires the Board to study and recommend state policy for risk adjusted payments of managed care plans. Such payments are needed to counter favorable risk selection by plans and to create greater incentives for plan responsiveness to vulnerable and sick enrollee populations, including the disabled, chronically ill, and disadvantaged. In addition, the Board will study and recommend policy on how individual consumer choice of managed care plans can be expanded. Presently, many consumers do not have the luxury of choosing plans or the choice is limited, undermining the model of health plan competition. The Board is also directed to study and recommend state policies for the creation of small employer and individual purchasing alliances. Alliances could be used to spread fragmented health risks across a community-wide insurance risk pool and to enhance the purchasing leverage of small employers and individuals in the managed care marketplace.

The Board shall present an annual report to the Governor and the public that highlights recommendations for managed care policy and quality oversight programs in the state.

The Board is to be appointed by the Governor and will be composed of no fewer than 15 and no more than 30 members. A majority of the Board will be health care consumers, with representation from managed care plans, health care professionals, health care workers, health care facilities, purchasers, unions, and experts in quality assessment and improvement. The term of office will be three years with the opportunity for reappointment for one additional term. The Board is required to meet at least four times a year, appoint its own officers, and is authorized to establish its own Committees. The Board will be given adequate funding to hire an Executive Director and staff, which will be derived from an assessment of managed care plan premiums.

Consumer Coalition for Quality Health Care

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