State Updates

Managed care was a hot topic of conversation in State Capitols around the country in 1996! As we prepare for the 1997 legislative sessions, let’s look back on what happened in ‘96.

Thousands of bills were introduced around the country dealing with managed care issues. The popular reforms last year were mandated 48 hour maternity stays, use of prudent layperson standard for emergency services, prohibition of gag rules, and direct access to ob/gyns. Most of the legislation enacted was in these areas, but some states did take on — and win — more comprehensive reforms. By and large, though, most states deferred action on managed care, guaranteeing that this will be a very busy year for health care activists.

Outside the legislative arena, consumers and workers are fighting mergers, for-profit conversions, and other highly charged issues that will have huge impacts on care for the uninsured, the control of public assets, consumer and community control of the health care infrastructure, jobs and profits. Quality assurance and consumer protection are the banner issues for consumers, while the cost control, “value,” (and profit) drive business interests.

As the economic forces begin to shape a health care system that is dominated by a few large companies in each metropolitan area, it is more important than ever that consumers are involved in setting the standards those companies must meet. Legislators are certainly feeling the heat of consumer concerns about their health care and are looking for ways to address the issues in the face of an industry that claims any state regulation will drive up costs.

Legislators and regulators seem to be taking their lead from the National Association of Insurance Commissioners, which has developed model bills to regulate managed care organizations. The NAIC models are viewed as an “objective” source by policy makers, although they were developed with tremendous influence by the health plans and do not represent consumer interests.

Consumer groups have been most effective in influencing managed care legislation when they work in broad coalitions. Advocates in New York, Texas and Missouri have been very effective bringing together large coalitions of consumer and provider groups to work together on regulations and legislation for the commercial health plan market and have greatly influence the move toward Medicaid managed care.

The state summaries below describe some of the policy proposals that are being raised. The contact people listed after each state provided information for the Quality Connection and have agreed to serve as a resource to other activists.

We urge you to communicate directly with the individuals listed by each state if you have questions regarding their campaigns.

The Consumer Coalition collects policy proposals, consumer responses and other campaign materials developed by local groups. Call the Consumer Coalition with questions about state activity or call the contact person in that state.


Health care consumers won some significant victories in California this year. The managed care ballot initiatives faired far better than the '94 single payer initiative, with Prop 214, the HMO Patient Rights Initiative winning 42% of the vote and Prop 216, the Patient Protection Act winning 39%. Both initiatives faced a $5-7 million opposition ad campaign.

In the midst of the debate over the initiatives, significant new laws were enacted. Legislation banning gag rules was enacted, although it still does not protect whistleblowing doctors and other health care workers from being fired without just cause. Legislation banning many forms of financial incentives and bonuses, independent appeal for denial of experimental treatments, and some limited independent quality monitoring were enacted. Health care advocates will continue to campaign through the legislative process for many of the issues in the propositions including second opinions, public disclosure of criteria for payment and just cause for physicians. Health Access will be supporting legislation requiring HMOs to have consumers and workers on their boards of directors and that forces them to have safe and reasonable response times.

Also in California a new, independent ombudsman program for commercial HMO consumers is being launched by the Center for Health Care Rights in the greater Sacramento area. This program, and the survey of ombudsman programs that preceded it, will help advocates across the country make the case for similar programs.

Bruce Livingston
Health Access
942 Market Street, Suite 402
San Francisco, CA 94102
415-395-7959; 415-395-7956 (fax)

Peter Lee
Center for Health Care Rights
520 Lafayette Park Place, Suite 214
Los Angeles, CA 90057
213-383-4519; 213-383-4598 (fax)


The Connecticut House unanimously passed a Managed Care Bill of Rights that was vehemently opposed by the insurance industry. The Senate refused to vote. That bill will be back and appears to have gained momentum through the elections. Also, Connecticut was granted a 1915 Medicaid waiver that is currently being implemented amid some controversy over inadequate networks. Governor Rowland is investigating the possibility of creating a giant purchasing pool that would include state employees, Medicaid retirees and the entire corrections system that rolls all these groups into managed care.

In addition, Connecticut is one of 6 states working together on a federal waiver proposal to allow the integration of Medicare and Medicaid to provide managed care for dually eligible individuals. The proposal is revolutionary in scope: no waiver has been proposed that would encompass a region as large as the New England states and no waiver’s design has included as large a spectrum of services in its monthly capitation fee. Also, the model does
not limit enrollment based on frailty, but will include elders at all levels of health and independence. The coalition involved with the dually eligible waiver has requested the Coalition's assistance to organize state and regional activity and communication among advocates.

Tom Swan
Connecticut Citizen Action Group
45 S. Main St. #305
West Hartford, CT 06105
860-561-6006; 203-561-6018 (fax)

Jan Van Tassel
Legal Resource Center of CT
80 Jefferson St., Hartford, CT 06106
860-278-5688; 860-278-2957 (fax)


In December the Michigan legislature passed a sweeping package of health reform bills called the Patient Bill of Rights. It requires health plans and insurance companies to provide comprehensive information on their benefits, coverage, and health providers in plain English; establish formal grievance procedures and expedited grievance procedures for cases that jeopardize the life or health of the patient; requires health plans to open their provider panels at least every four years; and guarantees renewal of health policies except in cases of fraud and failure to pay.

A tiered system of excluding coverage due to preexisting conditions was established for indemnity insurers. For people buying individual coverage or coming into a plan with 2-50 employees, an insurance company can exclude coverage for up to 12 months for any health condition diagnosed and treated in the previous six months. For people coming into a plan with 51 or more employees, insurers can only exclude for up to six months with a six-month look-back period. HMOs and Blue Cross & Blue Shield of Michigan both have six-month maximum exclusion with a six-month look-back. Governor Engler is expected to sign the bill.

Beverley McDonald, Chair
Consumer Health Care Coalition
Michigan League for Human Services
1520 Chateaufort Place
Detroit, MI 48207
313-567-4351; 313-567-4172 (fax)


Providers in Mississippi have been very resistant to managed care, but the state is attempting to move Medicaid recipients into managed care. Fourteen managed care organizations have applied for a license to operate in Mississippi and a Joint Legislative Committee recently released recommendations for the 1996 legislative session regarding Medicaid managed care. In 1994, the Legislature passed a Patient Protection Act supported by the medical society that had a few weak consumer protections in it, but much more is needed.

Timing is crucial for setting up a consumer friendly framework for managed care standards. AARP and the Mississippi Health Advocacy Program are working to help shape the consumer protections and quality assurance in Mississippi managed care.

Roy Mitchell
Mississippi Health Advocacy Program
PO Box 2248
Jackson, MS 39225
601-355-5520; 601-960-8493 (fax)

Mary Dillard
1015 N. 5th Avenue
Laurel, MS 39440


The Governor created a Joint House and Senate committee that met this summer and heard 10 days of testimony regarding the need (or lack of need) for managed care regulation. (The testimony can be accessed on the web at: The study committee was established after dozens of managed care bills were introduced the previous year. The Committee report was released mid-November.

The Missouri Association of Patients and Providers is also drafting legislation that will likely be the “consumer” bill. AARP has brought the Consumer Coalition model bill into those drafting discussions.

Medicaid managed care waivers have been approved from St. Louis to Mid Missouri to Kansas City, but the statewide waiver has been virtually dropped. Recommendations for standards for Medicaid managed care will be covered in the interim committee report.

Peter DeSimone
Missouri Association for Social Welfare
308 E. High Street
Jefferson City, MO 65101
314-634-2901; 314-635-1648 (fax)

Erma Cunningham
931 Country Ridge Drive
Jefferson City, MO 65109


A coalition led by AARP has drafted legislation to ensure health plan network adequacy and effective grievance procedures. Also, the coalition is using the Coalition’s Watchline to identify problems with managed care in Nebraska by publishing it in AARP brochures and distributing it to other organizations.

Nebraska implemented a Medicaid waiver for the mentally ill in 1997 without a sufficient number of providers, creating huge problems for the beneficiaries, hospitals and other providers. Despite those problems, the state appears to be committed to moving state employees and the rest of the Medicaid population in to managed care in the next year. The proposed legislation is an attempt to fix some of the problems already experienced and to establish better consumer protections for the next round of enrollees and commercially insured consumers.

Phyllis Bovee
AARP State Legislative Committee
1825 Normandy Lane
Lincoln, NE 68512

New York

Governor Pataki finally signed the managed care bill in late summer, but the state is still waiting on final approval of the Medicaid waiver from HCFA. Consumer groups seem united around a legislative campaign to pass an ombudsman program, but there is still concern about the need for independent complaint review. Also groups are quite concerned about how to monitor the implementation of the waiver.

Travis Plunkett
One Commerce Plaza, Suite 1947
Albany, NY 12260
518-434-4194; 518-434-6949 (fax)

Susan Dooha
Gay Men's Health Crisis
129 W. 20th St
New York, NY 10011
212-337-3342; 212-337-12236 (fax)

Richard Kirsch
Citizen Action
94 Central Ave
Albany, NY 12206
518-465-4600; 518-465-2890 (fax)


The Insurance Commission has written a bill that has been pre-filed for the upcoming session. Oregon Health Action Campaign (OHAC) has been working closely with the Commission, but it is unclear whether that bill will adequately deal with consumer concerns or whether a stronger, more pro-consumer bill will be necessary.

Ellen Pinney
3886 Beverly, NE Building I, #21,
Salem OR 97305
215-574-8520; 215-574-8523 (fax)


Comprehensive rulemaking on managed care by the Insurance Commission began this fall. Proposed rules are essentially NAIC models for network adequacy, emergency services, grievance and appeals, and provider contracts. The rules on provider contracts, general provisions, health service delivery, and grievance procedures are being amended and are set to be adopted the first week in April. New working groups have been established to deal with rules governing health care networks and disclosure and reporting. Expected completion date for these rules in Fall of 1997.

A coalition of consumer and labor organizations has been meeting to draft a bill for introduction in the 1997 Legislative session. The Washington Nurses Association has already drafted a bill.

Judy Krebs
Washington Citizen Action
100 S. King St., Suite 240,
Seattle, WA 98104
206-389-0050; 206-389-0049 (fax)

Diane Sosne
1199 NW SEIU
221 First Ave W. Suite 212
Seattle, WA 98119
206-283-1199; 206-283-3459 (fax)


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