Health Care Lawyers & Attorneys : Schottenstein Zox & Dunn Law Firm : Strategic Planning, Managed Care, Insurance : Columbus, Cleveland, Cincinnati, Central Ohio

On October 3, 2008, Congress passed and President Bush signed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 as part of the Emergency Economic Stabilization Act of 2008 (the bailout bill).  It amends the Mental Health Parity Act of 1996 (29 U.S.C.A. § 1185a). 

According to the new legislation, if an employer’s group health plan provides mental health and substance use disorder benefits (“mental health benefits”), then it may not discriminate in its coverage between those benefits and the medical and surgical benefits.   The plan may not have higher deductibles, copayments, coinsurance, or out-of-pocket expenses for mental health services.  Neither may the plan have more restrictive treatment limitations, such as limitations on the frequency of treatment, number of visits, days of coverage, or other limits on the scope or duration of treatment.  Also, if the plan provides coverage for medical and surgical benefits provided by out-of-network providers, then it must similarly cover mental health benefits provided by the out-of-network providers.  The law applies to employers health plans with more than 50 enrolled employees.

Congress had previously tried to pass this legislation on multiple occasions in 2007 and 2008, but had yet to overcome disagreements between the House and Senate versions, partly revolving around paying for the costs of the legislation.  In the end, the new legislation contains no provision to directly pay the estimated $3.4 billion dollar cost of the new legislation.  In the context of a $700,000,000,000 bailout, however, Congress was apparently no longer concerned.

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Ohio HealthCare Simplification Act creates a new Chapter 3963 in Ohio Revised Code.  ORC 3963.04 is the provision governing material amendments to a health care contract.  Under ORC 3963.04, if an amendment to a health care contract is not a material amendment, the contracting entity is only required to give providers a notice of amendment at least 15 days prior to the effective date of the amendment.   

For a material amendment, the contracting entity must provide the participating provider the material amendment in writing at least 90 days prior to the effective date of the material amendment. The notice shall be conspicuously entitled “Notice of Material Amendment to Contract.” 

The provider must object within 15 days if it does not accept the material amendment. If the parties cannot resolve the objection, either party may terminate the health care contract.  If the participating provider does not object to the material amendment in the manner described above, the material amendment shall be effective. 

The issue is whether the material amendment will become effective if the parties cannot reach a resolution on the provider’s objection. 

Some payors have taken the position that if the parties cannot resolve their differences, the proposed material amendment becomes effective.  

This has caused confusion to some providers. In some cases, it has even taken away the benefit of providers' original contract provision.  Nor is it clear if this interpretation is consistent with the legislative intent of ORC 3963.04.   Many in the industry agree that this issue would benefit from clarification from the Ohio Department of Insurance.

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An interesting Government Accountability Office report was posted recently regarding the problems that CMS and the SSA (Social Security Administration) have had with implementing systems to withhold Medicare Advantage ("MA") and Part D Plan ("PDP") premiums from social security checks. 

Amidst a chronicling of the difficulties and problems encountered, and the efforts of the government to address them, are the executive recommendations.  One of the GAO's suggestions is that CMS consider allowing plans to bill beneficiaries directly until the premium withholdings are processed.  If this suggestion is implemented, it could have a significant impact on managed care providers operating MA or PDP plans.

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As many of you know, the Healthcare Simplification Act, one of the most significant managed-care laws in Ohio’s recent history, went into effect on June 25. From a legal perspective, this law is particularly significant because of the degree to which it directly affects the provider/payor contract terms, an area Ohio has previously been hesitant to legislate. 

The next step in the development of this law is for the Ohio Department of Insurance (“ODI”) to issue rules and regulations to address the questions and fill in some of the details under the new law.  ODI’s website has a page dedicated to the Healthcare Simplification Act, where you can link to the law, submit questions and suggestions for rule-making, and it even has a FAQ section where ODI answers common questions. If you are dealing with a Simplification Act issue, it is worth checking out here.

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A recent story from Healthcare IT News presents an interesting intersection between the managed care and health information technology areas.  New Jersey's Horizon Blue Cross is apparently providing funding for electronic medical record implementation in network hospitals.  

For those of you thinking on a national scale, EMRs for eight hospitals may be a relatively small step, but one that may foreshadow more intriguing possibilities.  After all, who else has as much to gain from, and is in a better position to support electronic health information exchange, as the payors?  Not to mention the impact that a program like that could have on payor contract negotiations.

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