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S1458aa.....................................by COMMERCE AND HUMAN RESOURCES
CONTRACTS - MANAGED CARE - Amends and adds to existing law to provide that
no managed care organization may require, as an element of any provider
contract, that any person agree to the unnegotiated adjustment by the
managed care organization of the provider's contractual reimbursement rate
to equal the lowest reimbursement rate the provider has agreed to charge
any other payor or to a requirement that the provider adjust, or enter into
negotiations to adjust, his or her charges to the managed care organization
if the provider agrees to charge another payor lower rates or to a
requirement that the provider disclose his or her contractual reimbursement
rates from other payors; to prohibit best price or most favored nations
clause inclusion in stock or mutual insurance company health care provider
participation contracts; and to provide a best price or most favored
nations clause as an element of any service provided by a hospital or
professional service corporation.
02/13 Senate intro - 1st rdg - to printing
02/16 Rpt prt - to Com/HuRes
02/25 Rpt out - to 14th Ord
Rpt out amen - to engros
02/26 Rpt engros - 1st rdg - to 2nd rdg as amen
02/27 2nd rdg - to 3rd rdg as amen
03/04 3rd rdg as amen - PASSED - 35-0-0
AYES -- Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Diede, Dunklin, Frasure, Geddes, Hansen,
Hawkins, Ingram, Ipsen, Keough, King, Lee, McLaughlin, Noh, Parry,
Richardson, Riggs, Risch, Sandy, Schroeder, Sorensen, Stennett,
Sweeney, Thorne, Twiggs, Wheeler, Whitworth
NAYS -- None
Absent and excused -- None
Floor Sponsor - Cameron
Title apvd - to House
03/05 House intro - 1st rdg as amen - to Res/Con
03/06 Rpt out - to Bus
03/20 Rpt out - rec d/p - to 2nd rdg
03/20 Rls susp - PASSED - 58-10-2
AYES -- Barraclough, Barrett, Bell, Bieter, Bivens, Black(23), Boe,
Bruneel, Campbell, Chase, Clark, Crane, Crow, Deal, Denney,
Ellsworth, Field(13), Field(20), Gagner, Geddes, Gould, Hadley,
Hansen, Henbest, Hornbeck, Jaquet, Jones(9), Jones(22), Judd,
Kellogg, Kempton, Kendell, Kjellander, Kunz, Lake, Linford,
Loertscher, Marley, McKague, Meyer, Miller, Mortensen, Newcomb,
Pischner, Pomeroy, Reynolds, Richman, Ridinger, Robison, Stevenson,
Stoicheff, Stone, Stubbs, Watson, Wheeler, Wood, Zimmermann,
Mr Speaker
NAYS -- Alltus, Black(15), Callister, Cuddy, Jones(20), Mader, Sali,
Schaefer, Tilman, Trail
Absent and excused -- Taylor, Tippets
Floor Sponsor - Gagner
Title apvd - to Senate
03/20 To enrol - rpt enrol - Pres signed
03/23 Sp signed - to Governor
03/30 Governor signed
Session Law Chapter 422
Effective: 07/01/98
S1458|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fourth Legislature Second Regular Session - 1998IN THE SENATE SENATE BILL NO. 1458, As Amended BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO INSURANCE FOR HEALTH CARE; AMENDING SECTION 41-3927, IDAHO CODE, 3 TO PROVIDE THAT NO MANAGED CARE ORGANIZATION MAY REQUIRE AS AN ELEMENT OF 4 ANY PROVIDER CONTRACT THAT ANY PERSON AGREE TO THE UNNEGOTIATED ADJUSTMENT 5 BY THE MANAGED CARE ORGANIZATION OF THE PROVIDER'S CONTRACTUAL REIMBURSE- 6 MENT RATE TO EQUAL THE LOWEST REIMBURSEMENT RATE THE PROVIDER HAS AGREED 7 TO CHARGE ANY OTHER PAYOR OR TO A REQUIREMENT THAT THE PROVIDER ADJUST, 8 OR ENTER INTO NEGOTIATIONS TO ADJUST, HIS OR HER CHARGES TO THE MANAGED 9 CARE ORGANIZATION IF THE PROVIDER AGREES TO CHARGE ANOTHER PAYOR LOWER 10 RATES OR TO A REQUIREMENT THAT THE PROVIDER DISCLOSE HIS OR HER CONTRAC- 11 TUAL REIMBURSEMENT RATES FROM OTHER PAYORS; AMENDING CHAPTER 28, TITLE 41, 12 IDAHO CODE, BY THE ADDITION OF A NEW SECTION 41-2873, IDAHO CODE, TO PRO- 13 HIBIT BEST PRICE OR MOST FAVORED NATIONS CLAUSE INCLUSION IN STOCK OR 14 MUTUAL INSURANCE COMPANY HEALTH CARE PROVIDER PARTICIPATION CONTRACT; AND 15 AMENDING CHAPTER 34, TITLE 41, IDAHO CODE, BY THE ADDITION OF A NEW SEC- 16 TION 41-3443, IDAHO CODE, TO PROHIBIT A BEST PRICE OR MOST FAVORED NATIONS 17 CLAUSE AS AN ELEMENT OF ANY SERVICE PROVIDED BY A HOSPITAL OR PROFESSIONAL 18 SERVICE CORPORATION. 19 Be It Enacted by the Legislature of the State of Idaho: 20 SECTION 1. That Section 41-3927, Idaho Code, be, and the same is hereby 21 amended to read as follows: 22 41-3927. HEALTH CARE PROVIDERS -- PARTICIPATION BY ANY QUALIFIED, WILLING 23 PROVIDER -- CONTRACTS -- GRIEVANCE PROCEDURE. (1) Any managed care organiza- 24 tion issuing benefits pursuant to the provisions of this chapter shall be 25 ready and willing at all times to enter into care provider service agreements 26 with all qualified providers of the category or categories which are necessary 27 to provide the health care services covered by an organization if the health 28 care providers: are qualified under the laws of the state of Idaho, desire to 29 become participant providers of the organization, meet the requirements of the 30 organization, and practice within the general area served by the organization. 31 (2) Nothing in this section shall preclude an organization from refusing 32 to contract with a provider who is unqualified or who does not meet the terms 33 and conditions of the organization's participating provider contract or from 34 terminating or refusing to renew the contract of a health care provider who is 35 unqualified or who does not comply with, or who refuses to comply with, the 36 terms and conditions of the participating provider contract including, but not 37 limited to, practice standards and quality requirements. The contract shall 38 provide for written notice to the participating health care provider setting 39 forth any breach of contract for which the organization proposes that the con- 40 tract be terminated or not renewed and shall provide for a reasonable period 41 of time for the participating health care provider to cure such breach prior 42 to termination or nonrenewal. If the breach has not been cured within such 43 period of time the contract may be terminated or not renewed. Provided how- 2 1 ever, that if the breach of contract for which the organization proposes that 2 the contract be terminated or not renewed is a willful breach, fraud or a 3 breach which poses an immediate danger to the public health or safety, the 4 contract may be terminated or not renewed immediately. 5 (3) Every managed care organization issuing benefits pursuant to this 6 chapter shall establish a grievance system for providers. Such grievance sys- 7 tem shall provide for arbitration according to chapter 9, title 7, Idaho Code, 8 or for such other system which provides reasonable due process provisions for 9 the resolution of grievances and the protection of the rights of the parties. 10 (4) No managed care organization may require as an element of any pro- 11 vider contract that any person agree: 12 (a) To deny a member access to services not covered by the managed care 13 plan if the member is informed that he will be responsible to pay for the 14 noncovered services and the member nonetheless desires to obtain such ser- 15 vices; 16 (b) To refrain from treating a member even at that member's request and 17 expense if the provider had been, but is no longer, a contracting provider 18 under the managed care plan and the provider has notified the member that 19 the provider is no longer a contracting provider under the managed care 20 plan ; 21 (c) To the unnegotiated adjustment by the managed care organization of 22 the provider's contractual reimbursement rate to equal the lowest reim- 23 bursement rate the provider has agreed to charge any other payor; 24 (d) To a requirement that the provider adjust, or enter into negotiations 25 to adjust, his or her charges to the managed care organization if the pro- 26 vider agrees to charge another payor lower rates; or 27 (e) To a requirement that the provider disclose his or her contractual 28 reimbursement rates from other payors . 29 (5) A managed care organization shall not refuse to contract with or com- 30 pensate for covered services an otherwise eligible provider or nonpartic- 31 ipating provider solely because the provider has in good faith communicated 32 with one (1) or more current, former, or prospective patient regarding the 33 provisions, terms or requirements of the organization's products as they 34 relate to the needs of the provider's patients. 35 (6) As part of a provider contract, a managed care organization may 36 require a provider to indemnify and hold harmless the managed care organiza- 37 tion under certain circumstances so long as the managed care organization also 38 agrees to indemnify and hold harmless the provider under comparable circum- 39 stances. 40 (7) On request and within a reasonable time, a managed care organization 41 shall make available to any party to a provider contract any documents 42 referred to or adopted by reference in the contract except for information 43 which is proprietary or a trade secret or confidential personnel records. 44 (8) A managed care organization shall permit a contracting provider who 45 is practicing in conformity with community standards to advocate for his 46 patient without being subject to termination or penalty for the sole reason of 47 such advocacy. 48 (9) Subsections (1) and (2) of this section shall apply to provider par- 49 ticipation contracts entered into after July 1, 1994. 50 SECTION 2. That Chapter 28, Title 41, Idaho Code, be, and the same is 51 hereby amended by the addition thereto of a NEW SECTION , to be 52 known and designated as Section 41-2873, Idaho Code, and to read as follows: 53 41-2873. BEST PRICE -- MOST FAVORED NATIONS CLAUSE PROHIBITED. (1) No 3 1 stock or mutual insurance company (hereafter, insurance company) may require, 2 as an element of any health care provider participation contract, that any 3 provider agree: 4 (a) To the unnegotiated adjustment by the insurance company of the 5 provider's contractual reimbursement rate to equal the lowest reimburse- 6 ment rate the provider has agreed to charge any other payor; 7 (b) To a requirement that the provider adjust, or enter into negotiations 8 to adjust, his or her charges to the insurance company if the provider 9 agrees to charge another payor lower rates; or 10 (c) To a requirement that the provider disclose his or her contractual 11 reimbursement rates from other payors. 12 (2) For the purposes of this section, "provider" means any physician, 13 hospital, or other person licensed or otherwise authorized to furnish health 14 care services in Idaho. 15 SECTION 3. That Chapter 34, Title 41, Idaho Code, be, and the same is 16 hereby amended by the addition thereto of a NEW SECTION , to be 17 known and designated as Section 41-3443, Idaho Code, and to read as follows: 18 41-3443. BEST PRICE -- MOST FAVORED NATIONS CLAUSE PROHIBITED. No service 19 corporation may require, as an element of any service agreement, that any 20 licensee or hospital agree: 21 (1) To the unnegotiated adjustment by the service corporation of the 22 licensee's or hospital's contractual reimbursement rate to equal the lowest 23 reimbursement rate the licensee or hospital has agreed to charge any other 24 payor; 25 (2) To a requirement that the licensee or hospital adjust, or enter into 26 negotiations to adjust, their charges to the service corporation if the licen- 27 see or hospital agrees to charge another payor lower rates; or 28 (3) To a requirement that the licensee or hospital disclose his, her or 29 its contractual reimbursement rates from other payors.
STATEMENT OF PURPOSE
RS 08059
This legislation would prohibit provisions in health insurance or
managed care contracts which would require health care providers to
guarantee, in advance, to offer a health insurance company or managed
care organization their lowest price. Called "best price" or "most
favored nation" clauses, these provisions prevent providers from
offering lower priced services to competing insurance companies or
managed care organizations because they cannot agree to a single
discount without extending that discount to a competing insurance
company or managed care organization. In effect, these provisions
prevent health care providers from lowering their prices, thereby
artificially supporting higher than necessary health care costs.
FISCAL IMPACT
No fiscal impact.
CONTACT
Name: Ken McClure
Phone: 388-1200
STATEMENT OF PURPOSE/FISCAL IMPACT
S1458