0001| HOUSE LABOR AND HUMAN RESOURCES COMMITTEE SUBSTITUTE FOR | 0002| HOUSE BILL 351 | 0003| 43rd legislature - STATE OF NEW MEXICO - first session, 1997 | 0004| | 0005| | 0006| | 0007| | 0008| | 0009| | 0010| | 0011| AN ACT | 0012| RELATING TO HEALTH CARE; ENACTING THE MEDICAID MANAGED CARE | 0013| ACT; | 0014| PROVIDING REQUIREMENTS FOR MEDICAID MANAGED HEALTH CARE PLANS; | 0015| IMPOSING A CIVIL PENALTY. | 0016| | 0017| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0018| Section 1. SHORT TITLE.--This act may be cited as the | 0019| "Medicaid Managed Care Act". | 0020| Section 2. DEFINITIONS.--As used in the Medicaid Managed | 0021| Care Act: | 0022| A. "enrollee", "patient" or "consumer" means an | 0023| individual who is entitled to receive health care benefits from | 0024| a managed health care plan; | 0025| B. "essential community provider" means a person | 0001| that provides a significant portion of its health or | 0002| health-related services to medically needy indigent patients, | 0003| including uninsured, underserved or special needs populations; | 0004| C. "health care facility" means an institution | 0005| providing health care services, including a hospital or other | 0006| licensed inpatient center, an ambulatory surgical or treatment | 0007| center, a skilled nursing center, a residential treatment | 0008| center, a home health agency, a diagnostic, laboratory or | 0009| imaging center and a rehabilitation or other therapeutic health | 0010| setting; | 0011| D. "health care insurer" means a person that has a | 0012| valid certificate of authority in good standing under the New | 0013| Mexico Insurance Code to act as an insurer, a health | 0014| maintenance organization, a nonprofit health care plan or a | 0015| prepaid dental plan; | 0016| E. "health care professional" means a physician or | 0017| other health care practitioner, including a pharmacist, who is | 0018| licensed, certified or otherwise authorized by the state to | 0019| provide health services consistent with state law; | 0020| F. "health care provider" or "provider" means a | 0021| person that is licensed or otherwise authorized by the state to | 0022| furnish health care services and includes health care | 0023| professionals, health care facilities and essential community | 0024| providers; | 0025| G. "health care services" includes physical health | 0001| services or community-based mental health or developmental | 0002| disability services, including services for developmental | 0003| delay; | 0004| H. "managed health care plan" or "plan" means a health | 0005| benefit plan of a health care insurer or a provider service | 0006| network that either requires an enrollee to use, or creates | 0007| incentives, including financial incentives, for an enrollee to use | 0008| health care providers managed, owned, under contract with or | 0009| employed by the health care insurer. "Managed health care plan" | 0010| or "plan" does not include a traditional fee-for-service indemnity | 0011| plan or a plan that covers only short-term travel, accident-only, | 0012| limited benefit, student health plan or specified disease | 0013| policies; | 0014| I. "person" means an individual or other legal entity; | 0015| J. "primary health care clinic" means a nonprofit | 0016| community-based entity established to provide the first level of | 0017| basic or general health care needs, including diagnostic and | 0018| treatment services, for residents of a health care underserved | 0019| area as that area is defined in regulation adopted by the | 0020| department of health; and | 0021| K. "provider service network" means two or more health | 0022| care providers affiliated for the purpose of providing health care | 0023| services to enrollees on a capitated or similar prepaid, flat-rate | 0024| basis. | 0025| Section 3. MEDICAID MANAGED HEALTH CARE PLAN OPERATIONS-- | 0001| ENROLLMENT RESTRICTIONS--ADMINISTRATIVE ABUSES--PROFITS LIMITED.-- | 0002| A. Except as otherwise provided in the Medicaid | 0003| Managed Care Act, the human services department shall monitor each | 0004| managed health care plan offered through the medicaid program and | 0005| take all reasonable steps necessary to ensure that each plan | 0006| operates fairly and efficiently, protects patient interests and | 0007| fulfills the plan's primary obligation to deliver good quality | 0008| health care services. The human services department, in | 0009| cooperation with the department of health, shall be responsible | 0010| for quality assurance and utilization review oversight of medicaid | 0011| managed health care plans. | 0012| B. No managed health care plan offered through the | 0013| medicaid program may directly recruit new members for enrollment | 0014| into the medicaid program. All enrollment of eligible persons | 0015| into the medicaid program shall be arranged directly by the human | 0016| services department. | 0017| C. The human services department, through its own | 0018| offices and employees, joint powers agreements with other state | 0019| agencies or by contract with one or more brokering agencies | 0020| independent of any managed health care provider, shall fully | 0021| inform medicaid eligible persons of their choices for enrollment | 0022| into a managed health care plan. The department shall ensure that | 0023| the enrollment process includes adequate time and information for | 0024| enrollees to make informed choices about a plan. No managed | 0025| health care plan offered through the medicaid program shall enroll | 0001| medicaid recipients into its managed health care plan unless the | 0002| enrollment is in accordance with arrangements approved by the | 0003| department. | 0004| D. The human services department shall regulate the | 0005| marketing activities of managed health care plans offered through | 0006| the medicaid program and prevent administrative abuses in the | 0007| operation of the plans. | 0008| E. No managed health care plan offered through the | 0009| medicaid program shall be allowed to earn profits in excess of | 0010| eight and one-half percent. The human services department shall, | 0011| in cooperation with the department of insurance, adopt regulations | 0012| to administer the provisions of this subsection. The human | 0013| services department shall enforce the provisions of this | 0014| subsection. Any profits earned in excess of eight and one-half | 0015| percent shall be returned to the human services department, | 0016| deposited by the department into an appropriate state fund and | 0017| expended for the purpose of expanding access to health care for | 0018| the uninsured or underinsured. | 0019| Section 4. SPECIALIZED HEALTH CARE PROGRAMS--ESSENTIAL | 0020| COMMUNITY PROVIDERS.--Except as otherwise provided in the Medicaid | 0021| Managed Care Act, until January 1, 2000, no managed health care | 0022| plan offered through the medicaid program shall offer specialized | 0023| behavioral or developmental disability health services. The | 0024| provisions of this section apply to the specialized health care | 0025| services needed for a person treated for a developmental | 0001| disability, a developmental delay, a seriously disabling mental | 0002| illness, a serious emotional disturbance, physical or sexual abuse | 0003| or neglect, substance abuse or other behavioral health problem as | 0004| defined in regulation adopted by the department of health. Such | 0005| specialized behavioral or developmental disability health services | 0006| shall instead be provided, until January 1, 2000, only by | 0007| providers, including essential community providers, that have been | 0008| determined pursuant to regulation adopted by the department of | 0009| health or the children, youth and families department to be | 0010| qualified to offer specialized behavioral or developmental | 0011| disability health services. | 0012| Section 5. HEALTH CARE PROVIDER PARTICIPATION.--Any health | 0013| care provider that meets a medicaid managed health care plan's | 0014| reasonable qualification requirements and that is willing to | 0015| participate in the plan under its established reasonable terms and | 0016| conditions shall be allowed to participate in the plan. | 0017| Section 6. PRIMARY HEALTH CARE CLINICS PARTICIPATION.-- | 0018| A. A managed health care plan offered through the | 0019| medicaid program shall be required to use under reasonable terms | 0020| and conditions any primary health care clinic that elects to | 0021| participate in the plan, if the primary health care clinic meets | 0022| all reasonable quality of care and service payment requirements | 0023| imposed by the plan. The terms shall be no less favorable than | 0024| those offered any other provider, and they shall provide payments | 0025| that are reasonable and adequate to meet costs incurred by | 0001| efficiently and economically operated facilities, taking into | 0002| account the disproportionately greater severity of illness and | 0003| injury experienced by the patient population served. | 0004| B. A managed health care plan offered through the | 0005| medicaid program may not limit the number or location of primary | 0006| health care clinics that elect to participate in the plan. | 0007| C. In providing payments under the medicaid program, | 0008| the human services department shall ensure that a primary health | 0009| care clinic that was or would have qualified as a federally | 0010| qualified health center in 1996 under the federal act, as defined | 0011| in 42 U.S.C. Section 1396d(l)(2), shall receive one hundred | 0012| percent reasonable cost-based reimbursement for services, as was | 0013| provided in the federal act during 1996 for the centers pursuant | 0014| to the provisions of 42 U.S.C. Section 1396a(a)(13)(E). | 0015| D. In administering the medicaid program, the human | 0016| services department shall ensure that any managed care program for | 0017| medicaid, whether implemented through a federal waiver, block | 0018| grant or otherwise, shall require each health plan participating | 0019| in the medicaid managed care program to contract with each primary | 0020| health care clinic in its service area that was or would have | 0021| qualified as a federally qualified health center in 1996 under the | 0022| federal act, as defined in 42 U.S.C. Section 1396d(l)(2), for | 0023| delivery of covered services at terms no less favorable than those | 0024| offered to other providers in the plan for equivalent services. | 0025| The department shall provide timely payments at least quarterly to | 0001| federally qualified health centers to cover the difference between | 0002| their one hundred percent reasonable costs, as was provided in the | 0003| federal act during 1996 for the centers pursuant to the provisions | 0004| of 42 U.S.C. Section 1396a(a)(13)(E), and the payments under | 0005| medicaid managed care that are received by the federally qualified | 0006| health centers. | 0007| Section 7. INDIAN HEALTH SERVICE.--A Native American | 0008| enrolled in a managed health care plan offered through the | 0009| medicaid program shall be given the option of leaving that plan | 0010| and receiving services directly from the Indian health service or | 0011| health services provided by tribes under the federal Indian Self- | 0012| Determination and Education Assistance Act, the federal urban | 0013| Indian health program or the federal Indian children's program. | 0014| If an eligible Native American chooses to participate in a managed | 0015| health care plan, the Native American shall at all times retain | 0016| the option of receiving services directly from the Indian health | 0017| service or health services provided by tribes under the federal | 0018| Indian Self-Determination and Education Assistance Act, the | 0019| federal urban Indian health program or the federal Indian | 0020| children's program. In that event, the managed health care plan | 0021| shall ensure that the Indian health service receives the same | 0022| payment it would have received for the services rendered if the | 0023| patient did not participate in the plan. | 0024| Section 8. UNIVERSITY OF NEW MEXICO HEALTH SCIENCES | 0025| CENTER.-- | 0001| A. A managed health care plan offered through the | 0002| medicaid program shall include participation by the university of | 0003| New Mexico health sciences center. The human services department | 0004| shall administer a program to ensure the participation includes | 0005| delivery of primary care and tertiary care services and to attempt | 0006| to ensure, to the extent permitted by federal law, that the | 0007| medicaid patient population served by the university of New Mexico | 0008| health sciences center remains at least at a level similar to that | 0009| served by the university of New Mexico health sciences center | 0010| prior to implementation of the medicaid managed health care | 0011| program. | 0012| B. A managed health care plan offered through the | 0013| medicaid program shall provide payments to the university of New | 0014| Mexico health sciences center at rates that are reasonable and | 0015| adequate to meet costs incurred by efficiently and economically | 0016| operated facilities, taking into account the disproportionately | 0017| greater severity of illness and injury experienced by the patient | 0018| population served. | 0019| C. The human services department shall administer a | 0020| program and cooperate with the university of New Mexico health | 0021| sciences center to ensure an adequate and diverse patient | 0022| population necessary to preserve the health sciences center's | 0023| educational programs. The human services department shall also | 0024| assure continuity of general support under the state medicaid | 0025| program to the university of New Mexico health sciences center for | 0001| medical education and for serving a disproportionately large | 0002| indigent patient population. | 0003| Section 9. PUBLIC NONPROFIT HOSPITALS.-- | 0004| A. A managed health care plan offered through the | 0005| medicaid program shall be required to use under reasonable terms | 0006| and conditions any public nonprofit hospital that elects to | 0007| participate in the plan, if the hospital meets all reasonable | 0008| quality of care and service payment requirements imposed by the | 0009| plan. The terms shall be no less favorable than those offered by | 0010| any other provider, and they shall provide payments that are | 0011| reasonable and adequate to meet costs incurred by efficiently and | 0012| economically operated facilities, taking into account the | 0013| disproportionately greater severity of illness and injury | 0014| experienced by the patient population served. | 0015| B. A managed health care plan offered through the | 0016| medicaid program may not limit the number or location of public | 0017| nonprofit hospitals that elect to participate in the plan. | 0018| Section 10. LAS VEGAS MEDICAL CENTER.--A managed health | 0019| care plan offered through the medicaid program that offers mental | 0020| health services shall include participation by the Las Vegas | 0021| medical center for hospitalized care of mental health patients and | 0022| other health services the center provides. A plan shall provide | 0023| payments to the Las Vegas medical center under reasonable terms | 0024| and conditions. For medicaid eligible populations, the terms | 0025| shall be no less favorable than those offered any other provider, | 0001| and they shall provide payments that are reasonable and adequate | 0002| to meet costs incurred by efficiently and economically operated | 0003| facilities, taking into account the disproportionately greater | 0004| severity of illness and injury experienced by the patient | 0005| population served. | 0006| Section 11. AUTHORIZATION FOR MEDICAID MANAGED CARE | 0007| CONTRACTS DIRECTLY WITH PUBLIC AGENCIES, HOSPITALS, ESSENTIAL | 0008| COMMUNITY PROVIDERS AND PROVIDER SERVICE NETWORKS.--In | 0009| administering the medicaid program or a managed health care system | 0010| for the program, the human services department may contract | 0011| directly with a government agency or public body, public nonprofit | 0012| hospital, the university of New Mexico health sciences center, an | 0013| essential community provider or a provider service network. In | 0014| doing so, the human services department is not required to | 0015| contract with any such entity only through arrangements with a | 0016| health care insurer. | 0017| Section 12. ENFORCEMENT OF THE MEDICAID MANAGED CARE | 0018| ACT.-- | 0019| A. The human services department or a person who | 0020| suffers a loss as a result of a violation of a provision in the | 0021| Medicaid Managed Care Act may bring an action to recover actual | 0022| damages or the sum of one hundred dollars ($100), whichever is | 0023| greater. When the trier of fact finds that the party charged with | 0024| the violation acted willfully, the court may award up to three | 0025| times actual damages or three hundred dollars ($300), whichever is | 0001| greater, to the party complaining of the violation. | 0002| B. A person likely to be damaged by a denial of a | 0003| right protected in the Medicaid Managed Care Act may be granted an | 0004| injunction under the principles of equity and on terms that the | 0005| court considers reasonable. Proof of monetary damage or intent to | 0006| violate a right is not required. | 0007| C. To protect and enforce an enrollee's or a health | 0008| care provider's rights in a managed health care plan offered | 0009| through the medicaid program, an enrollee and a health care | 0010| provider participating in or eligible to participate in a medicaid | 0011| managed health care plan shall each be treated as a third party | 0012| beneficiary of the managed health care plan contract between the | 0013| health care insurer and the party with which the insurer directly | 0014| contracts. An enrollee or a health care provider may sue to | 0015| enforce the rights provided in the contract that governs the | 0016| managed health care plan. | 0017| D. The court shall award attorney fees and costs to | 0018| the party complaining of a violation of a right protected in the | 0019| Medicaid Managed Care Act if the party prevails substantially in | 0020| the lawsuit. | 0021| E. The relief provided in this section is in addition | 0022| to other remedies available against the same conduct under the | 0023| common law or other statutes of this state. | 0024| F. In any class action filed under this section, the | 0025| court may award damages to the named plaintiffs as provided in | 0001| this section and may award members of the class the actual damages | 0002| suffered by each member of the class as a result of the unlawful | 0003| practice. | 0004| G. A person shall not be required to complete | 0005| available grievance procedures or exhaust administrative remedies | 0006| prior to seeking relief in court regarding a complaint that may be | 0007| filed under this section. | 0008| Section 13. PENALTY.--In addition to any other penalties | 0009| provided by law, the secretary of human services may impose a | 0010| civil administrative penalty of up to twenty-five thousand dollars | 0011| ($25,000) for each violation of the Medicaid Managed Care Act. An | 0012| administrative penalty shall be imposed by written order of the | 0013| secretary after holding a hearing as provided for in the Public | 0014| Assistance Appeals Act. | 0015| Section 14. REGULATIONS.--The human services department may | 0016| adopt regulations it deems necessary or appropriate to administer | 0017| the provisions of the Medicaid Managed Care Act. | 0018| Section 15. EFFECTIVE DATE.--The effective date of the | 0019| provisions of this act is July 1, 1997. | 0020|  |