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.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

New Mexico Health Policy Commission

SUMMARY

Synopsis of Bill

House Bill 708 provides definition for liability issues that health managed care companies by amending the Patient Protection Act and amending and adding new sections to NMSA 1978.

Significant Issues

House Bill 708 requires a number of new standards: Included in these are:

    1. The duty to exercise ordinary care.

    2. Liability for damages caused by employees, agents, apparent agents and representatives who are acting on behalf of the plan.

Defenses to actions against the plan include:

    1. If the above mentioned parties did not control, influence or participate in the health care treatment decision.

    2. The plan did not deny or delay payment for any treatment prescribed or recommended by a provider.

The above mentioned standards create no obligation to provide treatment that is not covered in the plan. Liability is not created by an employer group purchasing organization or a pharmacy that purchases coverage or assumes risk on behalf of its employees. A plan may not remove a provider or refuse to renew a provider for the reason of advocating for appropriate and medically necessary treatment for an enrollee. A plan may not enter into a contract with a provider or pharmaceutical company that includes an indemnification or hold harmless clause for the acts or conduct of the plan.

In an action against a plan, a finding that a provider is an employee, agent, etc. of the plan shall not be determined solely on proof that his name appears in a listing of approved health care providers made available to enrollees of the plan.

No civil action against a plan may be taken unless the affected enrollee has exhausted all administrative remedies pursuant to the Patient Protection Act; gives written notice of the claim; agrees to submit the claim to a review by the department. There is a fourteen day time requirement for submittal of the claim by the department, and the court may ask the parties to submit to an independent review or some other means of dispute resolution that the court deems appropriate. Other provisions regarding the submittal of a claim against a plan are also included and time frames for the filing of documents and pleadings is defined in the proposed act.

ADMINISTRATIVE IMPLICATIONS

Administration of these new provisions will require significant communication with plan providers on

the very specific requirements that are now contained in statute.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

Unknown at this time

OTHER SUBSTANTIVE ISSUES

Managed care providers provide a significant amount of coverage to enrollees in New Mexico. Standards that are fair and protect the rights of enrollees and plan companies are necessary if we are to continue to provide coverage in this manner.

MB/njw