NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

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(Parenthesis ( ) Indicate Expenditure Decreases)

(Parenthesis ( ) Indicate Revenue Decreases)

Relates to HB244, Patient Protection Ombudsman's office.

SOURCES OF INFORMATION

Public Regulation Commission (PRC)

NM Health Policy Commission (HPC)

Attorney General's Office (AG)

State Agency on Aging (AOA)

Children, Youth and Families Department (CYFD)

Human Services Department (HSD)

SUMMARY

Synopsis of Bill

HB593 would establish an ombudsman program to assist consumers in navigating managed care systems and in resolving problems encountered in obtaining appropriate health care. The office would operate under contract with the Insurance Division of the PRC and function independently of government agencies and health plans.

Under the provisions of the bill, the PRC would contract with one or more independent organizations through a multi-term contract for 3-year terms to operate the managed care ombudsman program. The program would be granted access to the individual's medical and administrative records, health plan, licensing and data reporting records, and as such, would be required to receive permission of the individual or designated representative to access these records.

Significant Issues

Implementation of the managed care ombudsman office could lead to confusion and duplication between the patient protection ombudsman function at PRC, and the ombudsman functions carried out by HSD, CYFD, the AG, and AOA.

FISCAL IMPLICATIONS

HB593 proposes that funding for the managed care ombudsman's office would be generated from a surcharge assessed on premiums received by insurers offering health plans. The surcharge is assessed at the rate of one-tenth of one percent of the premium dollar amount collected by the insurer for coverage of enrollees in the insurer's health plans, whether from privately paid insurance or from publically funded programs including Medicaid's SALUD! program.

The Insurance Division of the PRC indicates the bill would generate approximately $1.0 million in FY2000 to be deposited in the managed care ombudsman fund from which the managed care ombudsman program would be funded. However, it is unclear how this estimate was derived. Additionally, the PRC and AOA indicate concerns that the revenue generated may not be sufficient to fund the program.

Currently, HB2 as amended by HAFC, contains $500.0 in general fund appropriated to the Insurance Division of the PRC to establish a patient protection ombudsman office in FY2000. The office would receive an additional 7-10 FTE.

Also, HB244 appropriates $500.0 in general fund in FY2000 to the PRC to establish a patient protection ombudsman office.

OTHER SUBSTANTIVE ISSUES

The PRC indicates the bill would create conflicting responsibilities between the PRC staff (including the patient protection ombudsman staff) and the contractor prescribed for under the provisions of HB593.

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