Mandated Benefits: Their Social,Economic,and Legal Implications

1981 Spending for Health Care is Up by 15.1%, New York Times, July 27, 1982, at A1, col. 5.

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].

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.

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).

Kissam P.C. , Applying Antitrust Law to Medical Credentialing, American Journal of Law & Medicine 7(1): 1–31 (Spring 1981); Competition Among Health Practitioners, supra note 2.

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).

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).

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”).

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).

Md. Ann. Code art. 48A, §§470A, 470A-1, A-2 (Cum. Supp. 1983).

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).

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).

Servein , Paying for Medical Care in the United States (1953) at 17.

See supra note 7.

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).

Barbanel J. , Group Insurers to Add Benefits for Alcoholism, New York Times, August 9, 1983, at B1, col. 6.

Competition Among Health Practitioners, supra note 2, at II-9, II-32.

Larson , Mandated Health Insurance Coverage: A Study of Review Mechanisms (Department of Allied Health Professions, Medical College of Virginia, Virginia Commonwealth University) (1979).

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).

See generally Heitler, Ader, supra note 12, at 287-89.

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).

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.

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).

U.S. Const, art. 1, §10.

Home Building and Loan Ass'n v. Blaisdell, 290 U.S. 438 (1934).

Allied Structural Steel Co. v. Spannus, 438 U.S. 243, 249–50(1978).

Employee Retirement Income Security Act of 1974, 29 U.S.C. §1144(a) (Supp. 1976).

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).

Michigan United Food and Commercial Workers Union v. Baerwaldt, No. 82-73821 (E.D. Mich. June 16, 1983, as amended, September 28, 1983).

Id.

51 U.S.L.W. 3937 (July 6, 1983).

433 N.E.2d 1223, 1228–29 (Mass. 1982).

Shaw v. Delta Airlines, 51 U.S.L.W. 4968 (June 27, 1983).

Attorney General v. Travelers Ins. Co., supra note 32, at 1228-29.

Shaw v. Delta Airlines, supra note 33, at 4971.

Id. at 4972.

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).

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).

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).

See Competition Among Health Practitioners, supra note 2, at XIX.

“[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.

“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.

See Pollard Leibenluft , supra note 3, at 106; Symposium on the Antitrust Laws and the Health Services Industry, Duke Law Journal 1978(2): 303–752 (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).

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).

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).

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.