February 28, 2001

For more information contact:

Stanley S. Jones, Jr.

404-817-6133

           Greetings from under the Gold Dome!  The General Assembly took the day as a day for Budget activity.   However, Committees did hold meetings.  It was also Macon Day at the Capitol.  Cherry trees and 'blossom' buttons were everywhere.  The day's events were topped off by the annual party at the Georgia Depot.  Food from all the Macon eateries was available; needless to say, it was a party.  Below will outline some of the day's events: 

Newly Introduced Legislation 

SB 253 – This has been introduced by Sen. Hecht and others which amends Chapter 11 of Title 14 concerning "Georgia Limited Liability Company Act" in order to change some definitions and cross-references, change the provisions relating to the approval rights of members and managers, change the provisions concerning distributions upon the event of dissociation, and change provisions relating to the assignment of limited liability company interest.  The bill also changes provisions relating to taxation.  The bill has been forwarded to the Senate Judiciary Committee. 

SB 269 – Sen. Kemp and others have introduced this bill amending O.C.G.A. § 5-3-30 by adding a new subsection (b) which pertains to the calendaring of appeals in the superior or state courts and trial juries therein.  Specifically, it states that "upon filing an appeal pursuant to subsection (a) of this Code section, the monetary limitations provided for in paragraph (5) of Code Section 15-10-2 shall no longer apply to any verdict and judgment entered by the superior or state court." 

SB 280 – Sen. Nadine Thomas has authored this bill amending Article 1 of Chapter 7 of Title 31 concerning regulation of hospitals and related institutions in an effort to require that citations of deficiencies of licensed nursing homes be accompanied by written concurrence of not fewer than 20% of the personal physicians of the residents.  Sen. Thomas has stated publicly that she has been having problems with the Department of Human Resources' Office of Regulatory Services which conducts these site visits. 

SB 282 – Sen. Hecht and others have authored this bill amending the Patient Protection Act of 1996 found at Chapter 20A of Title 33 in order to provide standards and procedures for verification of benefits and pre-certifications relating to managed health benefit plans.  It also provides for liability and personnel.  Further, it amends the unfair insurance practices found at O.C.G.A. § 33-6-5 so that violations of the Patient Protection Act are covered as unfair practice.  Under the definitions portion of the bill, "facility" is now defined as a "hospital, ambulatory surgical treatment center, birthing center, diagnostic and treatment center, or similar institution for examination, diagnosis, treatment, surgery, or maternity care but does not include physicians' or dentists' private offices and treatment rooms in which such physicians or dentists primarily see, consult with, and treat patients."  The terms "precertification" and "verification" are also defined. 

""Precertification" means a determination made by an insurer or agent thereof prior to an enrollee's receiving health care services that such services are a medical necessity, as defined in Code Section 33-20A-31; and "verification of benefits" means a determination by an insurer or agent thereof of whether given health care services are a covered benefit under the enrollee's health benefit plan without a determination as to whether the services are a medical necessity for an enrollee under the plan."

          Further, the bill will now require that when an enrollee, a provider, or a facility requests "verification of benefits" from a managed care plan, that managed care plan shall advise that caller in a non-recorded statement that: 

"(1) Such verification is only a determination of whether given health care services are a covered benefit under the health benefit plan and is not a guarantee of payment for those services; and
(2) If the health care services so verified are a covered benefit, whether precertification is required and the phone number to request precertification." 

          In addition, when an enrollee, provider, or facility obtains precertification for a service, then the managed care plan is liable for those services at the reimbursement level provided under the health benefit plan for the those services unless the enrollee is no longer covered by the health benefit plan at the time the services are received by the enrollee.  If a managed care plan requires precertification, then that health benefit plan must have available such staff 24 hours per day, seven days a week to provide such precertifications by telephone.  These new provisions would be applied to health benefit plan contracts issued, delivered, issued for delivery, or renewed in Georgia after July 1, 2001.

SR 262 – Sen. Tate and others have introduced this Resolution to create the Joint Task Force on Developing a Federally Funded Prescription Drug Benefit for Low-Income Elderly Citizens. 

HB 750 – Reps. Heard, Hugley, and Harbin have authored this amendment to Title 33 concerning Insurance in order to require that group members be notified of the cancellation, non-renewal, or other termination of their insurance either in person or by at least first-class, United States Mail.  This bill has been forwarded to the House Insurance Committee. 

HB 784 – Rep. Larry Walker has reintroduced this bill concerning office-based surgeries performed by physicians.  In this version, the bill provides for the comprehensive regulation by the Composite State Board of Medical Examiners of physicians who provide those services in their offices.  The bill was originally introduced to address those physicians who are performing liposuction procedures in their offices.  The bill defines "office based surgical procedures" as those procedures conducted in: 

"any physician's office or any office, building, or facility attached or adjacent to the physician's office that is owned or leased by the physician or the physician's medical practice and in which patients undergo surgical procedures.  Such term shall not include:
(A) Any entity where the only surgical procedures performed therein are appropriately performed without anesthesia or under the administration of local anesthesia, topical anesthesia, or a minor nerve block, unless such surgical procedures consist of 'large volume liposuction,' as that term is defined by the board; or
(B) Any ambulatory surgical treatment center required to have a permit under Article 1 of Chapter 7 of Title 31." 

          The Board would require any physician who provides or supervises the provision of anesthesia services in an office-based surgical setting to be credentialed once every three years to provide or supervise the provision of those services.  A physician may be deemed credentialed to provide the services in an office-based setting those surgical procedures for which the physician has "specific, unlimited privileges as a member of the active medical staff in a hospital located within 50 miles of the physician's primary office."   The physician would be required to provide to the Board written proof of his or her credentialing and any changes to that credentialing.  Hospitals get immunity if this type of credentialing is used.  Further, the Board would require every office-based surgical setting in which a patient undergoes a surgical procedure to be accredited once every three years by an accrediting entity approved by the Board (such as JCAHO, NCQA, etc.).  If a sentinel event occurs, then the physician would be required to notify the Board in writing within 30 days.         

Committee Activity 

          The most interesting activity dealt with the bills being fueled in response to Northside Hospital's dominance in the market in Fulton County.  As a result, two committees held meetings which dealt with legislation introduced concerning this market dominance issue.  More details are below: 

House Judiciary Committee 

          In a Subcommittee meeting hosted by Rep. Mary Squires, members of the House Judiciary Committee took up HB 102.  This bill was introduced this Session by Rep. Squires and Rep. Rene'e Unterman to amend the State's current law pertaining to contracts in Title 13.  Specifically, their bill states at O.C.G.A. § 13-8-2: 

"(c) Any contract for health services, including any renewal of or amendment to such contract, entered into between an insurer and any hospital which is the sole provider of hospital obstetric services within a one-mile radius of its facility is against public policy and is void and unenforceable when said contract, renewal, or amendment has the effect of interfering with a consumers' ability to receive or obtain other health services from another hospital also located within said radius under the same terms and conditions as the payor contracted with the sole provider hospital for such other services." 

          Rep. Unterman presented the bill before the Subcommittee because of constituents' complaints about the exclusion of neighboring facilities which are comparable with the exception of perhaps one or two services (such as obstetrical services in this instance).  Specifically, Rep. Unterman noted that St. Joseph's Hospital was being excluded from managed care contracts as it did not have a certificate of need to offer obstetrical services whereas Northside Hospital did. 

          There were a great number of questions raised.  Rep. Tom Bordeaux asked if it was the intention of the authors to interfere with how private entities contract with one another?  Rep. Unterman stated that was not the issue – she was more interested in the development of public policy.  She claimed that Northside Hospital is compromising women, and their family members, by making them drive great distances or waiting to get care. 

          Rep. Aubrey Villines, the lobbyist for St. Joseph's Hospital, spoke in favor of HB 102.  He noted that St. Joseph's Hospital is the oldest hospital in Atlanta and it has been in operation since 1880 when it was begun by a group of nuns.  It has 336 beds and all services except obstetrical services.  Moreover, it is one of the nation's leading heart hospitals – one of two in Atlanta which can do heart transplants.  It also operates St. Joe Mercy Care.  Approximately 25% of the hospital's revenues go towards funding the Mercy Care.  The bill would abolish the 'scheme of dominance' whereby a hospital is allowed to dictate to insurers which hospitals to exclude in a network.  Mr. Villines noted that 60% of the Atlanta market is affected by these restricted contracts.  Further, he acknowledged that there was litigation pending between the hospitals and that should not be a factor in this legislation which deals with the subject of subrogation.  He also stated that this legislation was not an attempt to repeal the State's certificate of need law. 

          Susan Atkinson, Counsel for St. Joseph's Hospital, also spoke in favor of HB 102.  She stressed that the bill would not void existing contracts but would address future contracting issues.  She also stated that if the State's certificate of need law was repealed, that would hurt St. Joseph's business. 

          There were a number of persons who testified who had been patients or relatives of patients.  Some of these persons have insurance contracts with Principal, Guardian, or Blue Cross Blue Shield of Georgia (Platinum).  All complained that using St. Joseph's Hospital rather than Northside put them at risk for uncovered care – or care which they would have to pay for with higher copayments. 

          Northside was also represented at this meeting.  A vice president of Northside stated that this bill would violate Georgia's Constitution concerning special laws which would help special interests.  He claimed that St. Joseph's Hospital was one of the most profitable hospitals in Georgia.  He pointed out that Northside was a not-for-profit facility and was the second highest provider of indigent care in Atlanta (following Grady Hospital).  He also claimed that Northside was not a 'dominant' facility in the provision of obstetrical services but a preferred provider of obstetrical services.  There are 30 hospitals in Atlanta and 22 of those provide obstetrical services.  Managed care came about in the mid 1980s – Northside was one of the first facilities to embrace managed care by entering into contracts in order to get volume discounts.  

          Following very emotional testimony, it was decided that no vote would be taken on the bill.  Instead, a study over the interim would occur. 

Senate Insurance and Labor Committee 

          The first bill that the Committee addressed on its agenda dealt with the uniform licensing of insurance agents.  HB 352 would provide for reciprocity of licensing of agents.  This bill was brought by Chairman Jimmy Lord to amend Chapter 23 of Title 33 as a result of the Gramm-Leach-Bliley law passed by the United States Congress.  This would require that the states address the licensing of agents before the end of 2002.  HB 352 would take effect on July 1, 2002 – this was done in order to allow enough time to get the Insurance Rules and Regulations in place to manage this new reciprocity of licensure.  An agent would have to be licensed in his or her own state and request licensure in Georgia.  There would be continuing education requirements as well.  After the bill was presented, the Committee voted to pass the bill.  It now proceed to the Senate Rules Committee. 

          The next bill was SB 148, authored by Sen. Tom Price.  Sen. Price claimed that the reason for SB 148  was that "something ain't right."  He thanked the Lt. Governor and Sen. Robert Brown for their support in moving this legislation forward in the process.  He claimed that there was a "wicked" power over the sick caused by a hospital – Northside Hospital.  The hospital has been forcing insurers into exclusionary contracts.  Sen. Price claimed that this was increasing the risks of the sick rather than working for the benefit of the community.  Here, there was an example of a network provider being the sole provider.  Sen. Price claimed that the issue really was access to healthcare as constituents cannot go to their local hospitals.  Instead, many drive great distances in order not to pay greater copayments.  SB 148 has also been supported by the Fulton County Commission. 

          A number of Senators asked questions about whether this bill borders on restraint of trade?  Sen. Dean asked if this was a mandate.  

          One gentleman gave a compelling story about his son.  His son went to North Fulton Hospital in an emergency situation – his insurance did not cover the treatment there but it was the closest hospital.  He was admitted and cared for in the critical care unit for four weeks.  Now, the young man is well.  His father claimed that they would have to pay greater amounts of money for his care;  further, in many instances Northside Hospital oftentimes does not have the bed space for patients. 

          A physician, Michael Daily, also spoke in favor of Sen. Price's bill.  He is a physician with privileges at St. Joseph's, North Fulton and Northside with a specialty in infectious disease and internal medicine.  He claimed that this was an 'exclusive contract arrangement' much like that what Bill Gates arranged with Microsoft's web browser.  His biggest concern is the lack of beds at Northside and the distances patients and their families must travel when they live in northern Fulton County (or beyond). 

          The Consumer's Insurance Advocate, Cathey Steinberg, testified in favor of SB 148.  She stated that it was time to return the healthcare decisions to the consumers.  Choice is needed for consumers and she supports the legislative efforts to eliminate the restriction of choice.  The fact that Northside is a 'delivery' hospital gives it an edge; it also is a premiere obstetrical service.  Steinberg noted that before managed care, certificate of need helped control costs of healthcare.  When asked by Sen. Bill Stephens if there were other areas of Georgia impacted by these exclusionary contracts, Ms. Steinberg noted the Hall County hospital example – Northeast Georgia Medical Center and Lanier Park Hospital.  Sen. Harbison also noted that in Columbus there was an issue of exclusions to the hospital network. Traffic is a real issue as well. 

          Sen. Susan Cable noted that she strongly supports the bill as well.  The State should not set up restrictions – she noted that such had occurred in Macon with the creation of the Department of Community Health which oversees the State's health plan for its employees.  She believes that this actually costs more dollars. 

          Sen. Lamutt believes that as the legislation was narrowly drawn, this would only 'fix' one area.  It would appear that there are other problems. 

          Northside's representative noted that the facility was the most preferred hospital in Atlanta.  Further, he noted that the "Patient Protection Act" addressed by way of consumer choice option the access to any hospital and physician. 

          There was no action taken on the bill at this meeting.

Other News 

          SB 53, the bill authored by Sen. Walker which relates to unfair practices in consumer transactions and provides standards for certain health benefit plan contracts and obligations and fees thereunder, passed by Floor Substitute yesterday in the Senate.  This would prohibit a physician from balance billing insurance enrollees once that physician has contracted with a health plan for services.  The bill is now in process of making its way through the House and has been assigned to the House Insurance Committee. 

          SB 210, authored by Sen. Tanksley and others, which amends Part 2 of Article 2 of Chapter 9 of Title 24 concerning medical information and procedures for obtaining such information by subpoena as well as to reconcile such information with federal privacy regulations, passed out of the Senate on Monday, February 27, as amended by the Senate Judiciary Committee, and was read in the House and assigned to the House Judiciary Committee. 

          The House Judiciary Committee passed out HB 737 with a Substitute bill yesterday.  HB 737 amends O.C.G.A. § 9-15-14 concerning litigation costs and attorney's fees assessed for frivolous actions and defenses.  This would provide in (g) that attorney's fees and expenses of litigation awarded under this Code section in a prior action be treated as court costs with regard to the filing of any subsequent action.  Also, the House Judiciary Committee passed out by Substitute, HB 569, relating to service and filing of pleadings subsequent to the original complaint in order to provide that service of judgments is also not required when service is waived.  It also amends O.C.G.A. §15-6-21 relating to the time for deciding, filing, and notification of motions in order to provide that notification is not required when service has been waived.  Both of these bills now proceed to the House Rules Committee. 

          The Speaker's bill regarding the elimination of the regional service boards in the provision of home- and community–based services to those with mental health, mental retardation and substance abuse needs, HB 498, is anticipated on the Floor of the House tomorrow, March 1, 2001.  There is a rumor circulating that the bill will have HB 332, authored by Rep. Carl von Epps, attached as well.