Hostname: page-component-cd9895bd7-dzt6s Total loading time: 0 Render date: 2024-12-24T02:08:00.316Z Has data issue: false hasContentIssue false

Mandated Benefits: Their Social, Economic, and Legal Implications

Published online by Cambridge University Press:  27 April 2021

Extract

Expenditures for health care have reached a point where they represent almost 10 percent of the gross national product; health care has become one of the country's largest industries. Moreover, the cost of health care continues to increase more rapidly than inflation. Many policy makers and critics of the health care system believe that the promotion of competition among health care providers can be instrumental in keeping the price of health services down.

The health care boom and ever accelerating health care expenditures have stimulated the availability of new providers, and many hope that these alternative providers will enhance competition in the health care system. Non-physician practitioners, such as podiatrists, optometrists, chiropractors, and nurse-midwives, and such non-traditional delivery mechanisms as health maintenance organizations (HMOs), preferred provider organizations (PPOs), ambulatory surgical centers, and birthing centers, have been gaining increasing support at both the federal and state levels of government. Proponents believe that these alternative providers and mechanisms not only produce more options for consumers but also help contain the cost of health care in the United States.

Type
Article
Copyright
Copyright © American Society of Law, Medicine and Ethics 1983

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1981 Spending for Health Care is Up by 15.1%, New York Times, July 27, 1982, at A1, col. 5.Google Scholar
Lewin & Associates, Inc., Competition Among Health Practitioners: the Influence of the Medical Profession on the Health Manpower Market, Volume 1: Executive Summary and Final Report (report to the Federal Trade Commission) (February 1981) and [hereinafter referred to as Competition Among Health Practitioners].Google Scholar
Id. See also Letter from Berman, Benjamin I., of the Federal Trade Commission, to Davis, Caroline, Administrator of the Health Care Financing Administration (March 1983); Pollard, M.R. Leibenluft, R.F., Antitrust & the Health Professions: Policy Planning Issues Paper (Office of Policy Planning, Federal Trade Commission, Washington, D.C.) (July 1981) at 13.Google Scholar
Letter from Berman Benjamin I., supra note 3; District of Columbia City Council Bill No. 5-166 (1983) (prohibiting hospitals from denying staff privileges to psychologists, nurse practitioners, nurse anesthetists, and podiatrists).Google Scholar
Kissam, P.C., Applying Antitrust Law to Medical Credentialing, American Journal of Law & Medicine 7(1): 131 (Spring 1981); Competition Among Health Practitioners, supra note 2.Google ScholarPubMed
See generally Collins, L.A. Heitler, G., Why Blue Cross Opposes Piecemeal Legislation, Pension & Welfare News, p. 25 (May 1973); States Mandating Health Insurance Benefits— Increasing the Number of Providers, and Payments and Price Tag, Perspective, pp. 29–36 (Fall 1976).Google Scholar
At least thirty-three states now have laws requiring the availability of insurance for treatment of alcoholism, according to studies by the Blue Cross and Blue Shield Association, in Chicago, Illinois, on State Required Health Care Benefits. See also Md. Ann. Code art. 48A §490(F) (Cum. Supp. 1982).Google Scholar
Md. Ann. Code art. 48A §§361E, 470Q, 477W (Cum. Supp. 1983) (Maryland law requiring carriers to offer coverage for services provided by a hospice); Md. Health Gen. Code Ann. §19-901 (Supp. 1982) (defining hospice as “a facility that provides a hospice-care program and is separate from any other facility, and admits at least two, but not more than eight individuals, who are unrelated and have no reasonable prospect of cure and are expected to die within six months”).Google Scholar
Md. Ann. Code art. 48 §470J (Cum. Supp. 1983) (Maryland law mandating benefits for home health care in contracts providing coverage for in-patient hospital care; previously, only the offer of benefits was mandated).Google Scholar
Md. Ann. Code art. 48A, §§470A, 470A-1, A-2 (Cum. Supp. 1983).Google Scholar
Tenn. Code Ann. §56.7.1001 (Cum. Supp. 1982) (Tennessee law requiring insurers to make available benefits for pediatric nursing care for newborns in every group contract requiring maternity services).Google Scholar
See generally Heitler, G. Ader, M., Blue Cross and Blue Shield Plan Contracts with Providers: Cost Containment Objectives amid Conflicting Legislative Schemes, Journal of Legal Medicine 2(3): 265, 285 (September 1981).Google ScholarPubMed
Servein, Paying for Medical Care in the United States (1953) at 17.Google Scholar
See supra note 7.Google Scholar
Letter from Bailey, Patricia, member of the Federal Trade Commission, to Polly Shackleton, Councilwoman for Washington, D.C., concerning the Health Care Facility and Agency Licensure Act of 1983, District of Columbia City Council Bill No. 5-66 (June 22, 1983).Google Scholar
Barbanel, J., Group Insurers to Add Benefits for Alcoholism, New York Times, August 9, 1983, at B1, col. 6.Google Scholar
Competition Among Health Practitioners, supra note 2, at II-9, II-32.Google Scholar
Larson, Mandated Health Insurance Coverage: A Study of Review Mechanisms (Department of Allied Health Professions, Medical College of Virginia, Virginia Commonwealth University) (1979).Google Scholar
Whereas 11 percent of podiatrists of all ages in the United States list surgery as their primary clinical activity, 26 percent of podiatrists under the age of 35 so designate themselves. Bureau of Health Manpower, U.S. Dept. of Health, Education & Welfare, A Report to the President and Congress on the Status of Health Professional Personnel in the United States (U.S. Gov't Printing Office, Washington, D.C.) (1980).Google Scholar
See generally Heitler, Ader, supra note 12, at 287-89.Google Scholar
For example, Blue Cross and Blue Shield of Massachusetts estimates that mandatory reimbursement for nurses and social workers providing outpatient mental health and alcoholism care will cost $1 billion by 1990. Blue Cross and Blue Shield Digest (July 21, 1983) at 4. See also Blue Cross and Blue Shield of Massachusetts, Special Report: Outpatient Psychiatric Payment Experience (April 1980) (from 1976 to 1979, mandated payments for outpatient psychiatric care for group business rose from less than $500,000 per quarter to $6.1 million per quarter); Health Economics Department, Blue Cross and Blue Shield of Minnesota, Financial Impact of Ambulatory Mental Health Benefits: The Minnesota Experience (October 1980) (within five years of the time that nonmedical therapists became eligible for reimbursement, nonmedical outpatient treatment visits increased 214.8 percent).Google Scholar
For example, in 1982, the California Board of Medical Quality Assurance, the state agency which licenses and polices California physicians and other health professionals, considered a proposal to repeal or revise the Medical Practice Act and permit lay practitioners to provide health care. Carlova, J., Will Low-Cost “Healers” Replace M.D.s? Medical Economics 59(16): 84 (August 9, 1982). If this proposal were adopted, it would not be long before various lay practitioners began demanding third-party reimbursement in the name of competition.Google Scholar
Indeed, corporate executives are concerned that “rising benefit costs are the biggest obstacle to developing compensation and benefit plans to reinforce corporate values.” Blue Cross and Blue Shield Digest (October 13, 1983).Google Scholar
U.S. Const, art. 1, §10.Google Scholar
Home Building and Loan Ass'n v. Blaisdell, 290 U.S. 438 (1934).Google Scholar
Allied Structural Steel Co. v. Spannus, 438 U.S. 243, 249–50(1978).Google Scholar
Employee Retirement Income Security Act of 1974, 29 U.S.C. §1144(a) (Supp. 1976).Google Scholar
Wadsworth v. Whaland, 562 F.2d 70 (1st Cir. 1977), cert. denied, 435 U.S. 980 (1978); Metropolitan Life Ins. Co. v. Whaland, 410 A.2d 635 (N.H. 1979); Attorney General v. Travelers Ins. Co., 433 N.E.2d 1223 (Mass. 1982), vacated, 51 U.S.L.W. 3937 (July 6, 1983).Google Scholar
Michigan United Food and Commercial Workers Union v. Baerwaldt, No. 82-73821 (E.D. Mich. June 16, 1983, as amended, September 28, 1983).Google Scholar
51 U.S.L.W. 3937 (July 6, 1983).Google Scholar
433 N.E.2d 1223, 1228–29 (Mass. 1982).Google Scholar
Shaw v. Delta Airlines, 51 U.S.L.W. 4968 (June 27, 1983).Google Scholar
Attorney General v. Travelers Ins. Co., supra note 32, at 1228-29.Google Scholar
Shaw v. Delta Airlines, supra note 33, at 4971.Google Scholar
Id. at 4972.Google Scholar
Wilks v. American Medical Ass'n, [1982-3] Trade Cas. (CCH) ¶65,617 (7th Cir. 1983) (reversed jury verdict in favor of defendants who allegedly engaged in a conspiracy to eliminate the chiropractic profession); Virginia Academy of Clinical Psychologists v. Blue Shield of Virginia, 624 F.2d 476 (4th Cir. 1980) (reversed district court judgment for Blue Shield defendants, who refused to pay fees for psychotherapy unless supervised and billed through a physician); In re State Volunteer Mutual Ins. Co., No. 811-0048 (F.T.C. May 31, 1983) (consent decree was entered into by insurer whereby insurer agreed not to discriminate against physicians who employ, supervise, or affiliate in any manner with nurse-midwives).Google Scholar
Kass D., Comment of Bureaus of Economics, Consumer Protection, and Competition to the Deputy Health Commissioner of the State of Virginia (July 22, 1983) (FTC economist's response to criticisms concerning an application for a certificate of need by a low-cost home health care service); Letter from Benjamin I. Berman, supra note 3 (comments reflecting the Commission's support for changes that would permit hospitals to offer clinical privileges and staff membership to a wide range of health care providers).Google Scholar
See Kissam, supra note 5, at 6; Washington Optometric Ass'n v. Clallam County Physicians Service, No. C-83-158R (W.D. Wash. filed February 8, 1983); Yurko v. Carteret County Gen. Hosp. Corp., No. 82-2068 (4th Cir. 1983).Google Scholar
See Competition Among Health Practitioners, supra note 2, at XIX.Google Scholar
“[A] competitive market does not require that all suppliers/providers are assured a place in the market. Thus, for example, department stores, individually or in aggregate, are not required to offer all brands of a given product and an individual retailer is even free to offer only a single brand, including its own brand name. The ultimate test of success is consumer satisfaction and therefore would-be providers must demonstrate their value.” Id. at V-16.Google Scholar
“Where legislative and regulatory interventions are involved, they should be directed at removing obstacles to market entry and fair competition for non-traditional providers as opposed to guaranteeing their inclusion in private insurance. Procedural safeguards which limit organized professional restraints on such entry may also be appropriate….” Id. at V-11.Google Scholar
See Pollard, Leibenluft, , supra note 3, at 106; Symposium on the Antitrust Laws and the Health Services Industry, Duke Law Journal 1978(2): 303752 (May 1978); Halper, H.R., The Health Care Industry and the Antitrust Laws: Collision Course, Antitrust Law Journal 49:17 (1980); Address by Costilo, L.B., attorney for the Federal Trade Commission, on Guidance for Preventive Counseling— Antitrust, Risks Analysis and Update, Meeting of the American Bar Association's Joint Program of the Section on Antitrust Law and Forum Committee on Health Law, Washington, D.C. (September 24–25, 1981); Havighurst, H.H., Professional Restraints on Innovation in Health Care Financing, Duke Law Journal 1978 (2): 303-87 (May 1978); Heitler, G., Antitrust, Restraint of Trade, and Unfair Business Practices— Impact on Physicians, Journal of Legal Medicine 3(3): 443 (September 1982).Google Scholar
Pub. L. No. 97-248, 96 Stat. 324 (September 3, 1982) (changes in Medicare program such as those affecting skilled nursing facilities, home health agencies, and hospices).Google Scholar
1982 A.B. 799 (eff. July 1, 1982) (requiring federal approval; Medical patients would no longer be able to go to doctors or hospitals of their choice).Google Scholar
1982 A.B. 348 (effective as to institutional providers after January 1, 1982, and as to professional providers after July 1, 1983). Under this law, carriers could offer policyholders coverage of 100 percent of charges from selected hospitals or physicians, but pay only 80 percent or less to others. Insured groups could agree to use specific providers only.Google Scholar