Executive Order  No. 405: Massachusetts managed care consumer protection measures

WHEREAS, the Governor's Special Advisory Commission on Managed Care (the "Special Commission") was established Executive Order No. 395 to make recommendations on all aspects of managed health care in the Commonwealth; and

WHEREAS, the Special Commission submitted its report and recommendations on July 31, 1997; and

WHEREAS, legislation implementing the Commission's recommendations has not yet been enacted by the legislature; and

WHEREAS, some of the Commission's recommendations can be implemented without legislation;

NOW, THEREFORE, I, Argeo Paul Cellucci, Governor of the Commonwealth of Massachusetts, by virtue of the authority vested in me as Supreme Executive Magistrate, do hereby order as follows:

Section 1. Consumer Guide to Managed Care Organizations. The Division of Health Care Finance and Policy (the "Division") is hereby directed to develop and make available to the public a Managed Care Consumer Information Guide (the "Consumer Guide") presenting information about managed care organizations in a manner that is accessible and useful to consumers. The Division is hereby further directed to complete the production Consumer Guide on or before September 1, 1998, and annually thereafter. The Consumer Guide shall contain the following kinds of information:

a. A brief explanation of the nature of managed care and provider networks;

b. A description of the service area of each managed care organization reviewed;

c. Addresses and telephone numbers for customer service for each managed care organization reviewed;

d. An explanation of managed care organization accreditation and presentation of accreditation data with respect to each managed care organization reviewed;

e. Information about whether each managed care organization reviewed has agreed to adhere to the standards recommended by the Special Commission as set forth in Section 3 below with respect to its members, whether or not they are covered under contracts with the Group Insurance Commission or the Division of Medical Assistance:

f. Such other data as the Division, in conjunction with the Managed Care Consumer Advisory Board in Section 2, determines to be useful to consumers in selecting a managed care organization and in accessing health care services through managed care organizations.

Section 2. Managed Care Consumer Advisory Board. A Managed Care Consumer Advisory Board (the "Board") is hereby established within, but not subject to the control of, the Department of Public Health. The Board shall be composed of the the following individuals or their designees: the Commissioner of the Division of Health Care Finance and Policy; the Commissioner of the Department of Public Health; the Commissioner of the Division of Insurance; the Commissioner of the Division of Medical Assistance; the Director of the Office of Consumer Affairs and Business Regulation; and the Chair of the Board of Registration in Medicine. The Board shall annually elect a chairperson from among its members. The Board shall have the following duties:

a. To assist the Division in developing the Consumer Guide each year and in compiling information about managed care organizations that is publicly available, including but not limited to information that is reported to the agencies represented on the Board, for inclusion in the Consumer Guide;

b. To select and appoint the Ombudsman established in Section 4 hereof, subject to the Governor's approval;

c. To oversee the activities of the Ombudsman and further refine his or her duties within the parameters set forth in Section 4 hereof;

d. To hold at least three open forum discussions about managed care each year, in different regions of the Commonwealth, to hear consumer concerns; and e. To report and recommend to the Governor as necessary any further administrative actions that can be taken to implement the recommendations of the Special Commission and any administrative or legislative actions it deems necessary or appropriate to protect and assist consumers of managed care in the Commonwealth.

Section 3. Commonwealth Managed Care Contracts. The Division of Medical Assistance and the Group Insurance Commission are hereby requested (i) to review the managed care contracts within their respective jurisdictions to which the Commonwealth is a party to determine whether such contracts include the standards recommended by the Special Commission, as set forth below, and (ii) to incorporate into such contracts as soon as practicable any such standards not already included in such contracts. The standards recommended by the Special Commission are as follows:

a. prohibition of physician compensation arrangements in which a single physician is put at financial risk for the costs of treating a patient that are outside the physician's direct control;

b. requirement that the managed care organization explain physician compensation arrangements in its member handbooks;

c. requirement that the managed care organization ensure that physicians disclose the nature, but not the amount, of their specific compensation arrangements at the request ,of their patients;

d. requirement that the managed care organization pay for screening and stabilization services mandated by the federal Emergency Medical Treatment and Active Labor Act, 42 U.S.C. § l395dd, as amended from time to time;

e. requirement that the managed care organization adhere to the most current standards for emergency services established by the National Committee for Quality Assurance;

f. requirement that the managed care organization use its best efforts to reach agreement with each of its contracting hospitals that (i) neither the managed care organization nor the hospital will require a member to pay for emergency services beyond screening and stabilization services (other than deductibles and copayments and similar charges) if a prudent layperson, acting reasonably, would have believed that an emergency medical condition existed, and (ii) the contract between the managed care organization and the hospital will include a provision for resolving disputes about whether the managed care organization or the hospital should pay for such emergency services;

g. requirement that the managed care organization will agree to submit disputes with hospitals with which it does not contract about payment for emergency services beyond screening and stabilization services (other than deductibles and copayments and similar charges) in cases where a prudent layperson, acting reasonably, would have believed that an emergency medical condition existed, to an outside adjudication panel composed of one member selected by the hospital, one member selected by the managed care organization and one member selected by the division of insurance;

h. requirement that the managed care organization inform members in their member handbooks that they may access emergency services through the 911 emergency response system.

All Commonwealth agencies that contract with hospitals are directed to encourage their contracting hospitals to agree to the provisions in paragraphs (f) and (g) with respect to payment for emergency services beyond screening and stabilization services, where a prudent layperson, acting reasonably, would have believed that an emergency medical condition existed.

Section 4. Managed Care Ombudsman. There is hereby established under the Board a Managed Care Ombudsman (the "Ombudsman"), who shall be appointed by the Board, subject to the approval of the Governor, and who shall serve at the pleasure of the Governor. The Ombudsman shall be available through a toll-free telephone number to assist members of managed care organizations in understanding their rights and the processes available to them according to their managed care organization's internal grievance procedures. The Ombudsman, where necessary, may assist members in using managed care organization internal review mechanisms for clinical and administrative decisions. The Ombudsman shall maintain data on the volume of calls received and the types of assistance requested, and shall catalogue managed care organizations' alternative dispute resolution processes, and shall make such information available to the Board and to the public, on request. Such information may be included in the Consumer Guide issued pursuant to Section 1 above. The Ombudsman may, where he or she deems it necessary, consult with and request the assistance of the Board, any of the agencies represented on the Board, or any appropriate federal agency in connection with any particular consumer complaint or problem. The Board is directed to implement the provisions of this section by July I, 1998.

Section 5. Administrative Support and Professional Expertise. All agencies are hereby authorized and directed to cooperate with the Board, the Ombudsman, and the Division as they carry out their respective duties and functions hereunder, and to provide administrative, technical and financial support and services as well as expertise, as appropriate.

Section 6. Construction. Nothing in this Order shall be interpreted to preclude or supplant enforcement by any agency of the Commonwealth of any provision of law, regulation or contract.

Given at the Executive Chamber in Boston this 27th day of May in the year one thousand nine hundred and ninety-eight.

Argeo Paul Cellucci

Acting Governor

Commonwealth of Massachusetts

William Francis Galvin

Secretary of the Commonwealth