Pure Pierre Politics

One reason that legislation shouldn’t be judged by its title alone is that you never know what might actually be in those pages of legalese. What could be more innocuous and mind-numbing than a bill that begins, “An Act to revise the requirements for health maintenance organizations”? We look forward to the hearing in the Senate Commerce and Energy Committee on SB 67 to learn more about what is actually intended in the 22 pages and 41 sections. One purpose clearly is to greatly expand the legal definition of an HMO.

Currently state law refers to “comprehensive health maintenance services” that “enrollees might reasonably require to be maintained in good health” including “as a minimum, but not limited to,  emergency care, inpatient hospital and physician care, outpatient medical services, and preventive medical services.” SB 67 would leave that definition alone but add another definition for “limited health service.” The legislation specifically lists for that proposed new category “dental care services, vision care services, mental health services, substance abuse services, pharmaceutical services, podiatric care services and such other services as may be determined by the director to be limited health services.” The legislation further states, “Limited health service does not include hospital, medical, surgical, or emergency services except as these services are provided incident to the limited health services.”

The legislation was introduced at the request of the state Department of Labor and Regulation, of which the state Division of Insurance is a part. Allowing limited health services to be offered through a HMO would open an avenue to issue contracts with enrollees on a preferred provider, exclusive provider or closed-panel basis.

The legislation also includes a proposed definition for a “risk bearing entity” which is defined in the measure as “an intermediary organization that is a financial risk for services provided through the contractual assumption of the obligation for the delivery of specified health care services to covered persons of the health maintenance organization.” The financial condition of the risk-bearing intermediary wouldn’t be available to the public under the proposed law.

The presence of this legislation suggests something major is already changing in health care, and/or someone wants to start changing in some big ways who’s in the HMO business, in South Dakota. SB 67 probably is legislation worth watching.