98-02: Policy Statement - Enforcement of Open Referral Plans
To: All Health Maintenance Organizations Licensed in the State of Missouri
From: Jay Angoff
Re: Department of Insurance Policy Statement Regarding Enforcement of Open Referral Plans
Date: January 30, 1998
Section 354.618, RSMo (H.B. 335, 1997) requires a health maintenance organization (HMO) under certain circumstances to offer contract/holders and/or enrollees the option of purchasing an open referral plan. An open referral plan is a health benefit plan which allows the enrollee to obtain treatment for covered benefits without a referral from a primary care physician from any person licensed to provide such treatment.
The problem addressed by section 354.618 is the lack, or perceived lack, of choice an enrollee in a managed care plan has in selecting health providers. This problem is particularly acute in group plans that require the member to participate in a gatekeeper managed care plan (plans which require the enrollee to first see a primary care physician for any health care need).
The Department of Insurance has reviewed legal opinions and other input from various parties and has concluded that it has no authority to adopt rules to implement section 354.618, RSMo (H.B. 335, 1997). Nonetheless, this statute is within the enforcement authority of the Department.
The purpose of this bulletin is to provide guidance as to the Department's enforcement of section 354.618. In addition, this bulletin will provide "safe harbors" for certain types of sales practices and plans so that an HMO may engage in such sales practices and issue such plans with a reasonable degree of certainty that the Department will not challenge the HMO's conduct.
- SAFE HARBORS
The Department recognizes the importance for guidance in complying with the open referral requirements of section 354.618. The Department also recognizes the legitimate desire of HMOs to know in advance what conduct they may engage in without the possibility of an enforcement or disciplinary action by the Department. Thus, the Department is willing to set forth "safe harbors" of conduct regarding open referral plans; the Department will not challenge an HMO's conduct which falls within a safe harbor, absent extraordinary circumstances.
Some HMOs may interpret the safe harbors as defining the limits of HMO conduct that is permissible under the open referral law. This view is incorrect. The inclusion of certain conduct within the safe harbors does not imply that conduct falling outside the safe harbors is likely to be challenged by the Department. The safe harbors encompass only a subset of conduct regarding open referral plans that the Department is unlikely to challenge under section 354.618.
- An HMO which never offers a gatekeeper group plan as an exclusive or full replacement health plan to a group contract holder need not offer an open referral plan. An exclusive health plan is one which is the sole health plan offered by the group contract holder to its employees. A full replacement health plan is one which is a complete substitution for all health plans offered by the group contract holder to its employees.
- If an HMO offers a gatekeeper group plan as an exclusive or full replacement health plan to a group contract holder and also offers (as an additional health plan) an open referral plan to all group contract holders not covered by an explicit exception, the Department will not challenge the legality of the HMO's conduct under section 354.618. Explicit exceptions include: contracts currently in existence (until the next annual renewal after 8/28/97), section 354.618.1(2); multi-year contracts prior to the expiration of the contract unless the group contract holder elects to comply before that time, section 354.618.1(2); an employer who provides more than one health plan to its employees and at least one is an open referral plan, section 354.618.1(3); the Medicaid program, section 354.618.3; an HMO sponsored by a federally qualified health care center under certain circumstances, section 354.618.7; and, group contract holders whose health benefit plan is being provided pursuant to the terms of a collective bargaining agreement with a labor union, in accordance with federal law and the labor union has declined such option on behalf of its members, section 354.618.8. An exclusive health plan is one which is the sole health plan offered by the group contract holder to its employees. A full replacement health plan is one which is a complete substitution for all health plans offered by the group contract holder to its employees.
- An HMO may offer a traditional indemnity insurance plan as an open referral plan.
- An HMO may offer a Point-of-Service (POS) plan as an open referral plan, if the POS plan: does not require referral from a primary care provider for purposes of the enrollee's access to a specialist, and allows the enrollee access to any person licensed to provide treatment.
The Department hopes that this Bulletin will serve the dual purposes of providing advance certainty to HMOs regarding section 354.618 and protecting enrollees or prospective enrollees who should have access to open referral plans as intended by this state's General Assembly. The Department may revise this Bulletin. Unless revised in writing in the future, however, this Bulletin represents the Department of Insurance's position regarding enforcement of the section 354.618 in the context of open referral plans