In 1996, more than 1,000 bills were introduced in state legislatures dealing with managed care health insurance. Forty states passed legislation and updated regulations on managed care last year. As of early October, according to a national newsmagazine, states had passed 182 laws on managed care this year, many of them under comprehensive consumer protections spelling out the rights of members of managed care organizations (MCOs). MCOs include health maintenance organizations (HMOs), preferred provider organizations (PPOs) and other types of plans in which insurers contract with doctors and other health professionals to provide services to plan members or enrollees.

The 1997 revisions in Medicaid and Medicare regulations turn increasing control of those programs -- both major insurers of people with disabilities -- over to states, most of which contract with MCOs to provide services. Comprehensive "health care reform" isn't likely to come out of Washington. For the time being, states, not the federal government, regulate insurance. So changes at the state level have the most direct impact on medical insurance for all Americans, including those with disabilities.

Now is the hour to make sure the new consumer protection bills and Medicaid "reforms" in your state address your needs. Virtually every state-mandated health-care improvement has come about as the result of people who are affected -- patients, parents, doctors and other health-care professionals -- working together and persuading lawmakers of the need for change.

SPECIAL NEEDS

"Managing Managed Care" in Quest, no. 3, 1997, reviewed some needs that people with neuromuscular diseases often find unmet in private managed care. Primary among them are:

• the ability to see specialists of their choice
  
  
• ongoing physical and occupational therapy for maintenance rather than rehabilitation
  
  
• adequate coverage of durable medical equipment and ventilators, including repair and supplies
  
  
• home health care and personal assistance services

Managed care consumer protection legislation, though written to assist the general population and to emphasize preventive care, does begin to address some of the concerns of those with disabilities and progressive or chronic disorders. Many of the new state laws make MCOs more accountable by:

• Banning gag rules, in which some MCOs prohibit their doctors from discussing all treatment options with patients without prior management approval.
  
  
• Allowing emergency care without prior authorization so crucial treatment will not be delayed.
  
  
• Letting patients continue seeing the same doctor for 60 to 120 days after the doctor leaves an MCO network or a patient changes health plans.
  
  
• Requiring disclosure to new and prospective enrollees of more complete information about how a health plan operates, including grievance procedures and limits of coverage.

SPECIALIST PHYSICIANS

HMOs and other managed care organizations often limit members' access to specialists by requiring that they first see their "gatekeeper" physician (usually a general practitioner or internist) and get a referral every time they want to see a specialist. Some MCOs are so focused on short-term treatments, and keeping costs down, that they even deny specialist referrals if a patient's disease is "incurable." Many people with neuromuscular diseases would like to solve these problems by naming their neurologists as their primary care or gatekeeper physicians.

Other problems arise when an MCO network has a specialist in neurology or orthopedics who isn't familiar with a specific disease, or is an adult specialist but the patient is a child. Even when patients feel a specialist isn't qualified to treat their diseases, MCOs are reluctant to refer them to specialists outside their network. Many people may have experienced this when attending the MDA clinic. The clinic team makes every attempt to work with respective MCOs but, ultimately, patients themselves may be required to mediate with the MCOs to which they belong.

To make specialist referrals more readily available, at least 20 states now require that an MCO allow a woman to name her obstetrician-gynecologist as her primary care physician or to see the ob-gyn without a referral. States are also beginning to recognize that access to specialists is a vital issue for people with chronic diseases.

In New York, Texas and New Jersey, for example, MCOs are now required to make out-of-network referrals if there's no specialist in the network that meets a patient's needs. They may also designate a specialist as primary care provider for individuals with life-threatening, disabling or degenerative conditions. And they must have a procedure by which a member who needs ongoing specialty care can get a standing referral to a specialist. These provisions don't guarantee that you can see any doctor you choose, but they provide easier access to specialists and a basis for asking that specialist services be covered.

THERAPY

Another new provision in some state laws helps solve another major obstacle faced by people with neuromuscular diseases in managed care. Most MCOs view physical, occupational and other kinds of therapy as rehabilitative services to restore function for someone recovering from an accident or short-term illness. People with neuromuscular diseases usually hit a brick wall when they try to get ongoing, maintenance therapy that doesn't lead to "improvement."

Under a provision in the managed care consumer protection law passed in Texas this spring, if an MCO allows a certain number of therapy visits per year and a doctor prescribes the maximum sessions al-lowed, the organization can't deny or terminate treatment because a patient isn't making "progress." The therapy only has to "meet or exceed treatment goals," which are set by the doctor. The law even spells out that "treatment goals may include maintenance of functioning or prevention of or slowing of further deterioration."

The Texas "therapies amendment" was introduced and passed as a result of a concerted effort by 27 groups, including doctors, therapists, and consumers, working together through the state's Disability Policy Consortium. The consortium wrote proposed legislation and testified before the legislature and the state insurance department. The decision makers responded to personal stories from parents who explained why their children with disabilities needed ongoing therapy.

"The amendment we wrote is very different from the one that was finally passed, but the intent is still the same," Nancy E. Epstein, director of the consortium, explained. The amendment makes two points, she said: "That the HMO can't just arbitrarily say you can't continue because you're not making enough progress, and that the real fulcrum of the decision is with the doctor. If the doctor said this is medically necessary, and there were benefits in the contract to cover it, then the child [or adult] should get the care." Doctors may also specify that the sessions be spread out over a year, instead of 60 days as many MCOs normally require.

DENIALS AND GRIEVANCES

In managed care, doctors' recommendations are examined in a utilization review process, by which plan administrators determine whether a doctor's orders meet standards of necessity, quality and cost-effectiveness.

Utilization review often follows a set of protocols or criteria specifying how long a person can stay in the hospital for a particular procedure and defining what's "medically necessary" for certain conditions. This practice led to a nationwide outcry about "drive-by deliveries" in 1995. Utilization review is a key to the financial success of managed care, but it angers doctors to have their judgments overruled by nonmedical personnel.

The most progressive changes in this area occurred in New Jersey and New York, where only health-care professionals can conduct utilization review. New Jersey's Health Care Quality Act -- considered one of the most comprehensive consumer protection laws in the nation -- states that the medical director of an MCO, who must be a licensed physician, "shall ensure that any utilization management decision to deny, reduce or terminate medical benefits shall be made by a physician."

Other states have passed laws designating longer hospital stays for specific procedures, such as mastectomy or childbirth. Others say a patient must agree to a protocol before it can be enforced.

Related to utilization review is the grievance or appeals process, by which a member can ask that a decision not to authorize or pay for a service be reconsidered. Many states have improved MCOs' grievance procedures, by requiring binding arbitration or placing limits on the time an MCO can take to review a denial of service, especially when delay would increase the member's health risk.

Perhaps most important, several states now require that a managed care member be able to appeal a decision outside the MCO. For instance, New Jersey established the Independent Health-Care Appeals Program, under which MCO decisions appealed by patients are reviewed by independent utilization review organizations.

As of Jan. 1, in what the Wall Street Journal says puts "Tennessee at the forefront of a national movement to increase managed care regulation," consumers in that state can register their complaints through the Department of Commerce and Insurance. Brian McGuire, director of Tennessee Citizen Action, a watchdog group that pushed the legislation through, said, "What we ended up with is a bill that treats HMO complaints very much like a property and casualty insurance complaint."

MEDICAID

Medicaid is a federally funded health insurance program administered by the states that covers low-income children under age 21 and certain low-income adults, including those with disabilities. Increasingly, states are contracting with MCOs to provide Medicaid services. Many states have introduced the practice gradually, with children with disabilities the last group required to enroll in Medicaid managed care.

TennCare, Tennessee's Medicaid managed care program, also covers people who are "uninsurable," said Dara Howe, communications director of the Tennessee Disability Coalition. By "uninsurable," the regulation refers to people who have been turned down by private insurance because of chronic disorders or pre-existing conditions. Her coalition is working to expand coverage to people who are offered insurance through their employers but can't afford the premiums.

The coalition is also pushing for better enforcement of the benefits to which Medicaid recipients are entitled, including Early Periodic Screening, Diagnosis and Treatment. Under this provision, "if something (such as a neuromuscular disease) is found as part of the EPSDT screening procedure, then a child has a right to receive treatment to address whatever the screening found," Howe said, in-cluding therapies and medical devices.

"The reality is, in most states, advocates would say that EPSDT has never been fully realized," Howe added. "There are children who are covered under EPSDT Medicaid requirements who have tremendous difficulty getting what they need."

One reason the services are hard to get is that "MCOs, when they signed on to take responsibility for the Medicaid population, really didn't read the fine print about EPSDT. So there's a great deal of interpretation of what the contract says they have to do, versus what Medicaid law says they have to do. In the meantime, children get caught in between while the elephants do battle."

Another reason is that states can get waivers from the federal government that allow them more flexibility in administering Medicaid. A class action suit has been filed to bring TennCare more in line with the federal mandate. Similar legal action has been taken in Pennsylvania. Tennessee has improved the appeals process for Medicaid recipients. About a year ago, the TennCare Bureau adopted a grievance procedure.

"Advocates fought very hard in that negotiation to cut out step one, which was to appeal it to the MCO," Howe said. "We pointed out, what possible incentive would an MCO have to reverse a decision they've made? It's just a waste of time. Now appeals go directly to the TennCare Bureau, which negotiates with the managed care organization." A recent newspaper story cites a bureau report that about 75 percent of such complaints are decided in favor of the patient.

Another approach to Medicaid is that of Massachusetts. There, families of children with disabilities can purchase a policy through CommonHealth, the state Medicaid program, as primary or secondary insurance, with fees based on family income. Consumer purchase of the program isn't allowed in most other states.

While consumers in states like Tennessee work to bring Medicaid managed care into conformity with federal guidelines and consumer needs, other states are taking a cautious approach before putting people with special needs into managed care systems. West Virginia and Minnesota are two of the states conducting pilot programs before requiring all disabled Medicaid recipients to enroll in managed care.

In New Jersey, several advocacy groups serve on the Work Group on Medicaid Managed Care for People with Disabilities. For more than two years, this group has met with the Medicaid Division of the Department of Human Services to help set up guidelines that MCOs must follow in order to get managed care contracts from the state. The New Jersey work group has also consulted with consumers in Oregon, which has one of the most successful mandatory managed care programs for disabled children.

One piece of advice from Oregon that the New Jersey group is following is to emphasize care coordination, a requirement that a nurse or social worker be appointed to oversee the total health care picture for each person with special needs. "This is the person who really looks at the whole person, the big picture, and sees exactly what is being done, what needs to be done, so that things aren't falling through the cracks," including medical, school and social services, Beverly Roberts, a member of the work group, said.

"The people in Oregon have said that this is the glue that keeps their program together. And there's obviously an extra cost, so it was a very significant victory, we felt, when our state Medicaid Division said we are going to insist that this has to be there," added Roberts, who is director of the Mainstreaming Medical Care Program for The Arc of New Jersey. The division has also agreed to give Medicaid managed care recipients a choice of MCOs, with at least two contractors offered in each county.

STATE BY STATE

You can find out the status of health care laws in your state from the health insurance counseling section of the state's insurance department.

A small handful of people can make a big difference in state legislation -- far more easily than at the federal level. Working with the legislators from your district, or with those who already have an interest in health care or disabilities, you can explain how your health care or your child's is affected by current managed care policies.

Although special needs advocacy groups have generally had good response from state governments, insurance companies exercise a lot of clout as well. In October, for instance, Gov. Pete Wilson of California vetoed a law that would have prevented an MCO from denying critically ill patients treatments recommended by their doctors. But in general, politicians respond to public pressure and publicity. They don't like to be portrayed as "bad guys" in media reports about children or adults who've been denied vital health care.

Roberts said working on legislation is "an enormous investment in time."

"Anyone who's going to try to do this has to realize that to do it right, you really have to be willing to devote countless hours to going to all the meetings and reading all the documents," she said. "But it's worth it in the end. If we end up with a decent system, which we hope we will, then it is worth it."

State agencies are also open to consumer input when they're writing the specific regulations by which new laws will be carried out.

RESOURCES

Almost every state has a disability consortium or coalition. You can find out about these through the governor's office on disabilities. These coalitions, which often join with senior citizen and parent organizations, bring small groups together to support each other's causes and strengthen their impact.

See "Managing Managed Care" in Quest, no. 3, 1997, for resources and suggestions on getting better coverage in your own MCO. "Health Care Reform Comes at Slow Pace" in Quest, no. 5, 1997, reviews some new federal laws.

To inform yourself about health-care legislation, try the following resources:

Community Catalyst, 30 Winter Street, Boston, MA 02108; (617) 338-6035. Answers questions and issues a series of publications on managed care from the consumer's point of view, including one on disability.

Families USA Foundation, 1334 G. St. NW, Washington, DC 20005; (202) 628-3030; info@familiesusa.org; www.familiesusa.org. This group advocates for high-quality, affordable health care. Among its publications are "HMO Consumers at Risk: States to the Rescue," available on the Web site or in hard copy. An update is expected early in 1998.

Family Voices, P.O. Box 769, Algodones, NM 87001; (505) 867-2368; famv01rw@wonder.em.cdc.gov; www.ichp.edu/. A national network of families of children with special health care needs. It publishes "Children with Special Health Care Needs in Managed Care: Questions to Ask and Answer."

Health Insurance Sourcebook, edited by Wendy Wilcox, 1997. 560 pages. $75. Omnigraphics, Penobscot Building, Detroit, MI 48226; (313) 961-1340.

National Health Law Program, 2639 S. La Cienega Blvd., Los Angeles, CA 90034; (310) 204-6010; nhelp@healthlaw.org; www.healthlaw.org. See "Medicaid Managed Care Contracts: An Advocacy Checklist for People with Disabilities" on the Web site.

President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry, 200 Independence Ave. SW, Suite 118F, Washington, DC 20201; (202) 205-3038.

MEANWHILE, BACK IN WASHINGTON...

In the middle of this river of pro-consumer health care legislation being passed in almost every state, there's a large, threatening, jagged rock. It's a federal law called ERISA, the Employee Retirement Income Security Act of 1974, which was originally enacted to protect employee pension funds and benefits. Briefly, this law exempts self-funded insurance programs from many state insurance regulations. Self-funded, or employer-sponsored, health plans are those in which employers pay insurance claims of employees directly. These tend to be large- and medium-size employers.

An estimated 60 million MCO members are insured by ERISA-covered plans. These MCOs don't have to obey state regulations, and if the plan makes a decision that harms a member, the injured party can't file suit against the organization in state court. Members can sue in federal court, but only for the cost of the denied procedure, not for damages or negligence.

An act introduced in Congress in July, Senate bill 1136, and a few recent court decisions are chipping away at ERISA's authority. In May, Texas became the first state to allow patients to sue managed care organizations for medical malpractice over a decision to deny or delay treatment that causes injury.

Also on the federal level, the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry, a panel made up of 34 insurance executives, doctors and consumer advocates, is drafting a bill of rights for people in health insurance plans. The commission has held public hearings and heard testimony from experts, individuals and consumer groups, including people with disabilities and chronic conditions.

It's expected that President Clinton will draw from the recommendations to propose new health care legislation next year.

New federal ideas on managed care could either be passed as laws that supersede state laws; be established as minimum standards for MCOs across the country, with states allowed to pass and enforce more restrictive laws; or be issued as voluntary guidelines. Federal laws could also be written to override ERISA exemptions.