Connecticut Law Restricts HMO Denial of Treatment

On May 21, 1997, The Connecticut General Assembly passed a law allowing the state to overturn a health provider's decision not to pay for a needed medical procedure. Other states, notably New York and Georgia, are looking at similar proposals. President Clinton said that his commission to draft a "bill of rights" for health plan enrolees must include a guarantee they will be able to appeal denial of coverage to an impartial agency.

Connecticut State Representative Moira Lyons said, "This external appeal is at the heart of reforming managed care. Everyone has been questioning whether HMOs are ratcheting down care to control costs. I can't answer that, but this takes the cost factor out of decision making."

The insurance industry of course opposed the legislation, Their line is that increased regulation could lead to higher costs, and that insurance companies already have internal review of such decisions. By their reasoning, this would make external review merely a useless duplication of effort.

The bill also includes other useful provisions. Insurance providers are not allowed to prevent doctors from telling their patients about possible treatment options. HMOs must respond in three hours to a doctor's request to extend a patient's hospital stay; no response is automatic approval. Emergency room visits must be covered even if no serious medical problem is discovered, so long as the patient had "reasonable cause for concern".

The new Connecticut law does not allow immediate outside appeal of a decision to deny care. After a managed-care company has turned down coverage for a procedure recommended by the doctor, the patient must first go through three stages of appeals within the company before going to the state. Appeals are then made to the state's Insurance Department, not to the state's Health Department.

This report has been condensed from an article appearing in the New York Times, May 22, 1997.