ADA Audio Conference

Thank you for standing by and holding for the managed care and ADA conference call. At this time all participant lines are in a listen only mode. Later there will be a question-and-answer session and instructions will be given at that time. If you do need assistance during the call today, please press the star followed by the zero. Today's conference is being recorded. I would now like to turn the conference over to Jennifer Bowerman. Please go ahead.

Welcome everyone to the ADA Distance Learning 2000 series. This session today is on Managed Care and the ADA. It is hosted by your regional Disability and Business Technical Assistance Center. If you have any questions or need some troubleshooting throughout the session, please feel free to call your regional Disability and Business Technical Assistance Center at 800-949-4232. This session is currently being real-time captioned in our ADA Forum at www.adagreatlakes.org Each site should have received handouts prior to this session. The handouts are also available on the web site and there be also be an additional outline of the session posted to the web for your convenience. Today we have two presenters, very experienced in the issue of managed care and the ADA.

Mary Anderlik is research professor at the Health Law and Policy Institute at the University of Houston. She has a law degree from Yale and a Ph.D. specializing in biomedical ethics from Rice University.

Wendy Wilkinson is an attorney and project director for the Southwest Disability and Business Technical Assistance Center. Both Mary and Wendy are the investigators on the "Legal Protections for People with Disabilities," a research project of the Research and Training Center on Managed Health Care and Disability. This project has been an exciting project as it looks at researching the experiences of people with disabilities as they access managed care. At this point I will turn it over to Mary and Wendy

Good afternoon. This is Wendy Wilkinson. First, a little bit about the barriers in managed care that people with disabilities experience. You are a person with a disability and need medical care and have been told by your plan that your doctor is not included. Now, picture yourself in a maze. You need to see a doctor but you can't see the doctor that you have been seeing for years. You are told that now you must choose a primary care physician, whatever that may be. To negotiate this maze, you've been given this new map. It is rather large and does not appear to be any kind of language that you're familiar with. But you hang on to it with confidence because apparently it explains the route that you must take to get medical care. You begin your journey. At each stopping place there is another barrier. The barriers encountered could be any number of things: a primary care doctor's office is not accessible; a doctor that thinks that providing effective communication means only that they mouth the words slowly, accompanying their words with expressive hands; a doctor that doesn't understand the implications of your disability.

So, you are forced to try to educate them in the 60 seconds that you have to bond with them. Frustrated, you check through your map and find something that says you can see specialist out-of-network. However you must get a referral from that primary care doctor. Eventually you convince the doctor that you really need to see the specialist and kind of wonder about his reluctance to refer you. You're about to go skipping off, referral in-hand, when you're told that some higher authority must approve it-someone you have never seen. You are tired. Upset. But then you find a help line number. Oh, boy. Someone that can help you through this maze. You call. A warning: be prepared to spend some time on hold contemplating the meaning of your life. When you finally get through, you may discover that the person that is supposed to help you may not be as helpful or knowledgeable as you expected. They seem to be good at placing more barriers in your way, have been through that "just say no" training. They lead you to believe that they have attempted to absorb the managed care manual by osmosis.

I have painted a rather negative portrait of the managed care experience as I see it. I must admit my own bias. I'm a person with a disability and a consumer of managed care. Today I must admit it has not been a warm and fuzzy relationship. Like many of my friends and colleagues, I have a thick file with my contacts and names. I have gotten really good at taking names and finding creative things to do while on hold. It took me months to get the simple surgery that I needed because of the paperwork burden. I had to go out of the managed care provider network. For the surgery, the surgeon expressed his anger to me about how much the provider had interfered with the way he wanted to treat me. It was a good thing I had already had that "happy shot" or I may not have wanted to proceed. I had a coworker that needed a simple orthopedic shoe because he was having problems with his foot because of his diabetes. It took him 30 calls to get one simple shoe, a shoe that costs $100 and that was a really good preventive device that would have also headed off any more expensive surgery or treatment.

I am a fairly sophisticated consumer of health care and also being from New York, I am capable of bringing out what I would like to call my "aggressive take-no-prisoners advocacy skills." Just think of what happens to people who don't have resources. Individuals in the public system generally have more serious disabilities. They also face additional barriers such as poverty and have less access to the tools needed to negotiate through the complex health care maze than the privately insured population. It is likely that more and more people will be facing these barriers as under the Balanced Budget Act of 1997, recipients of managed care may get dumped into a program involuntarily. Distinguishing what may be considered discrimination based on disability in health care is a difficult exercise, and it is subject of a great deal of debate.

There are many reasons that people with disabilities face barriers in managed care and Mary will talk about those a bit more. It is important to note that using the nondiscrimination laws, such as the Americans with Disabilities Act and the Rehabilitation Act of 1973 can be extremely effective, especially when you do systemic advocacy. But when you're dealing with an individual consumer that has health care complaint, it's best to use informal and administrative processes. And Mary will talk about those a bit more. Just a note about how successful these can be, I know a couple of great advocates who also happen to be attorneys. They have been successful in using these informal processes because they know how to use the mechanisms effectively. Their clients are children with cystic fibrosis that need expensive pieces of equipment that allow them to breathe. This is definitely life saving equipment and there is no question that it is necessary.

Still, in each case, they were denied until they had assistance from these people that understood how to negotiate the system. In each case, they were able to get the machine. But in each state where they represented a child, they encountered a very unsympathetic bureaucracy that had also been through that "just say no" training program. Again the fact that they are attorneys is not important. It's important that they understood how to negotiate this complex system.

Wendy has already briefed you on some of the basic aspects of managed care, such as a limited network of providers and restrictions on referrals. I'm going to get back to the problems with managed care, but I did want to say a few kind words. My perspective is shaped by an article I read early on. It was called "Managed Care: Jeckel or Hyde?" Often when we encounter managed care, it seems more like Mr. Hyde, but there are a few Jeckel plans out there that do a good job. And one of them was the Community Medical Alliance in Boston. The medical director of that plan identified seven principals for designing care systems to effectively meet the needs of people with disabilities and I wanted to share those with you.

The first is to develop true case management, not just to talk about it.

The second is to maximize the availability of clinicians who note the patient, so you don't get the run around.

The third is to create environment that foster strong personal relationships between patients and clinicians. So, you have to try to stop the amazing turnover on both sides.

The fourth is to help clinicians provide services in the most appropriate integrated setting, which means being flexible in terms of how resources are spent.

The fifth is to employ clinicians with special knowledge of patient's conditions. Often it seems that the people who are charged with the primary responsibility simply don't know what they're doing.

The sixth is to use early interventions aggressively to limit complications. That's really the promise of managed care, to prevent serious problems.

And the seventh is to use risk adjusted capitation to allow innovation in serving people with varying levels of need. Capitation is a very complicated area, but it is very important.

If you get the same amount of money for treating someone who has no serious health problems and someone with very serious health problems, you are obviously not going to be too happy about the second person and you might try to avoid having them as a patient or discourage them from coming back. That is what often happens when the payments aren't adjusted to reflect the needs. Wendy's stories made a point that comes up over and over again when you read complaints about managed care. There are a number of recurrent problems: bureaucratic rigidity, system complexity and the run around or the lack of follow through where one person says "oh, yeah, it is done" and then later on there is no action, inadequate resources and inadequate training of staff. We've been talking to lawyers and advocates of protection and advocacy agencies and I just wanted to share a few instances that they described. This is a quote from a transcript where someone was describing how difficult it is sometimes to get durable medical equipment. The person said one medical director testified upon oath that he would never approve a power wheelchair for a individual where there was someone who could push them. If there was nobody in the home, they would try to find somebody in the community. He thought that this was integrating the person more into the community. So that can give you an idea of the level of insensitivity at some managed care organizations.

Other advocates emphasize that if they could get a face-to-face meeting, it was often very effective in changing someone's mind, because they just really had no idea. Another attorney described trying to get coverage for day treatment services in the transition to managed care. They said "it may have been the case that these people with mental disabilities didn't need that intensity of service but there was no alternative." And the HMO didn't try to come up with an alternative. They just terminated the service. Another area I'd mentioned-training. Sometimes the primary care provider really doesn't have the background. This is a quote from a focus group report. This woman who had a child with a disability said my primary care physician is relatively new and he made this whole list of the physicians we see, and she looked at it and quote, he said, "Oh, my god, who was helping you? I said you are." He had this look and fear and panic in his face.

So, in many cases, physicians just aren't prepared. The resources aren't there. And a final area that has emerged as a real problem is provision of diapers and other support such as nutrition. Often plans will say this is just a convenience item. But if you can get a physician to sign an affidavit saying it's medically necessary, especially in the Medicaid program, that's often very effective. I wanted to just mention some general tips for consumers. Wendy mentioned informal process. Before you sue, what can you do?

The first tip is to read the member handbook, because it should be written in language you can understand. It should inform you of your rights, and it will also give you a clue to the magic words that you can use, for example if you're trying to get a service covered. What kind of description is there that you can mimic or repeat in a letter that you write trying to get coverage?

The second tip is if help is available use it. Usually the member handbook will have a toll free number for assistance and that's a good place to start. Make them explain to you what your rights are if the member handbook isn't clear and also the reasons for any policies or decisions that affect you. Contact an advocacy organization. Contact a state agency. Sometimes the state insurance department or the Medicaid help-line will also be printed in the member handbook. But usually there is a 1 800 number that you can call to get assistance from a state agency. Often when the insurance company or the managed care organization will not respond to an individual consumer, they really take action swiftly when the state is calling.

The final tip is to document, document, document. Make a record of any problem you experience while it is still fresh in your mind and for any contact note the date, who you talked to and what you were told.

I said that with the final tip. But I guess my final, final tip is to act quickly, because sometimes there are time periods that elapse and after that you can't file a grievance or an appeal. So that's sometimes important. But where consumers do choose to pursue appeals, they are often very successful.

The statistics from the state suggest that about 30 to 40 percent of denials are reversed upon internal review, and then if it goes to an independent review, the number is about the same. 40, 50, 60 percent in some states of those decisions go in favor of the consumer. Wendy is going to talk at length about the ADA. I just wanted to sneak in a few words about the Medicaid managed care program. The Medicaid statute can be used in conjunction with the discrimination laws. If you're dealing with Medicaid beneficiaries, there are some really good due process protections. And I have a copy of the complaint in a California case that's now pending, Carter v Bell Shay. And it is a good road map for all of the different rights that beneficiaries have under the Medicaid act. It imposes on the state agency the responsibility to monitor health plans and other contractors. They have to provide timely written notice of any action affecting the Medicaid beneficiary's rights and they also have to give them a right to a state fair hearing and notify them of that right. That isn't changed under managed care.

There is often the possibility of getting a service continued until there is a hearing. There is a standard for medically necessary care. And there is a reasonable promptness requirement and also a comparability requirement. So any discrimination laws are very powerful, but there are additional supports, and I just wanted to put in a plug there. Now I'm going to turn it over to Wendy to discuss the ADA and the integration mandate

We saw the power of the Title II integration mandate this summer when the Supreme Court issued its ruling in Olmstead v LC. The case was brought in 1995 by the Atlanta Legal Aid Foundation on behalf of two women with mental retardation and psychiatric disabilities as well who at that time were patients in a state psychiatric hospital. What the court said was that failure to receive services in a community setting violated Title II of the ADA that requires public entities provide their services in the most integrated setting appropriate to the needs of qualified individuals with disabilities, in a setting that enables individuals with disabilities to interact with other individuals to the fullest extent possible. The court noted that the setting must be appropriate to the needs of the individual and could include home and community based arrangements.

It is important to note that this is not an unqualified victory. You want to keep in mind that the court did place some limitations on the extent of the obligation to make a community placement. This may be modified by Title II's fundamental alteration defense. In applying it to this situation, the court said that the state may consider not only the cost of providing community based care to individuals, but also the range of services it provides to other individuals with disabilities and the state's obligation to meet out those services in an equitable manner. The power and importance of understanding how to use this decision is really more fully appreciated when you read some of the testimonials in a brief filed by ADAPT on behalf of the respondents.

One person testified about her 23 year old friend Joe who had lived in a nursing home since he had had an accident at the age of 17. He was placed in a home one hour away from his friends and family. His self-esteem was not great. The battery for his motorized wheelchair was missing. No one will take responsibility for losing it. He is unable to have his own telephone. He cannot have cable TV either. And he is rooming with man who is in his 90s and is dying.

There was another story from a woman, a 58 year old woman who had lived in the home for 23 years after her parents had placed her there because they said she was too disabled to compete.

These are just some of the cases. And no one knows how many contributions a society has missed because there were no provisions with people with disabilities to live in the community. So using and understanding how to use this integration mandate is going to be extremely important for those that want to achieve some real systemic changes in their state. Several protection advocacy agencies have used this mandate in other similar scenarios. In a case regarding Jay Curtis, this came down in California before the Department of Human Services, a physician ordered that an individual with multiple disabilities required wrap around services so that they could remain in the community. The department of health and human services denied this request and stated that these were not medically necessary services. The administrative law judge in this case called upon the integration mandate and ruled for this individual and found that these services were necessary so the individual could remain in the community.

In another case, Blackman v Mississippi, the protection and advocacy agency argued that the state hospital's use of a voucher system for prescriptions for certain types of anti-psychotic medication including newer anti-psychotic types of medication that were more effective for some people violated the integration mandate because using this system inhibited the ability of individuals to obtain the treatment that they needed to live in the community. Without their access to certain types of the newer medications they may have had to end up in an institution. Although the suit was dropped, the state did provide assurance that a system would be put in place that would provide people access to the necessary medications regardless of the brand or expense. So as you can see, the Title II integration mandate can be used in a number of different ways to facilitate a person's ability to remain in a community.

In Olmstead, we also see that the court set out a road map for states to follow to get people out of the institution and is back into their communities. This road map is fairly detailed and states have already started implementing these plans. In order for the states to show that they're complying with the road map that they have laid out, the court said that the plan must be very comprehensive and it must demonstrate that states are working hard to place people with disabilities in less restrictive settings and they must prove that their waiting lists are moving at a reasonable pace and they're not being influenced by state's attempts to keep certain institutions full. The U.S. Department of Human Services through the Office of Civil Rights is also working with states on developing these state plans, so it's really important that people get involved in the development of these state plans.

The program accessibility requirement found in Title II of the ADA was challenged and used in Anderson v Department of Welfare, which is brought in Pennsylvania. In this case, it was a class action suit brought on behalf of Medicaid recipients who had mobility and vision impairment. Some of the allegations in the brief were that the state took no action to assure that providers were accessible. They simply asked providers to indicate whether or not they were accessible. According to several surveys that were provided in support of this litigation, they found that the numbers of providers that were accessible was extraordinarily small.

For instance, in one county, only 211 out of 1,355 primary care physicians were accessible. In regard to alternate formats, the state only ordered that the managed care organization make their materials accessible in only one format, but didn't specify the type. So people that were requesting provider manuals in large print or Braille were denied. The state also asked providers to designate if they treated people with special needs, whether they would treat people who are home bound, who had HIV and AIDS and were hearing impaired. Well, the court decided in this case that, as most of you are probably familiar with Title II, that they weren't required to make each facility accessible, but certainly the numbers that were accessible in the plan were not acceptable. The court did say they were going to have all the providers comply with certain minimum requirements, and this could vary according to the facility status of new facility or an existing facilities. As far as the effective communication requirement, they just noted that it should be handled on a case-by-case basis, that effective communication would depend on the situation and the information be communicated and so forth.

In another case, brought in Hawaii by a group of people who were blind and other people with disabilities, they challenged the policy of excluding them from Medicaid managed care pilot program under Title II. What the court in this case said is that the Title II could be used to attack managed care programs that preclude or discourage participation by people with disabilities. Make note of a couple of other cases, although these are not managed care cases, they do address an important barrier that a lot of people with disabilities encounter in managed care, and that is the managed care information barrier that I alluded to early on in my presentation.

In one case, Henrietta vs Guilliani, residents from New York city with AIDS and HIV claimed the system for distributing benefits through the division of AIDS services was ineffective and that any restructuring was going to make it even worse. What the court did is they decided that the plaintiffs did have a case under the ADA and 504 because they recognized how difficult it was for people with disabilities to negotiate this complicated city social system program on their own. They said that this was not a special service, a matter of discretion as the city claimed. And they said that this is really necessary to fulfill the requirements of the nondiscrimination laws. What they likened this sort of affirmative information program to was a ramp required for persons in a wheelchairs to access public buildings.

In another case, Marisol v Guilaini by children who had suffered neglect and abuse sued the state and city welfare officials claiming that they had been denied a meaningful access to the child welfare system simply because they weren't provided with the information and their cases weren't fully investigated. So what the court did in using the ADA is they interpreted the reasonable modification and accommodation provision and said that these cases stand for the proposition that the disabled individual is entitled to meaningful access to the benefits and services provided by a public agency or an agency receiving federal funds.

So, as you can see, these decisions could be translated into the managed care arena where people are having tremendous difficulties accessing the materials there.

Another barrier in a case in Wolfert v Lewis in West Virginia, was about the failure to provide transportation. In this case, the court said that the failure to provide transportation to ensure meaningful access to services under the Medicaid program was a violation of Section 504 of the Rehabilitation Act. So, again, that's another barrier, and an important case to look at.

Wendy has described some cases, including some managed care cases that involve rather traditional types of ADA claims concerning accessibility. We are just beginning to see cases using the ADA to challenge the financial arrangements that are sort of the backbone of managed care. As far as we know, the first case to come to a decision is here in Texas. We actually don't have a verdict on this case, but it did survive a motion to dismiss. In legal terms that is pretty important. That is sort of the initial hurdle in going forward. This is a case brought by 13 patients of a Medicare HMO and two physicians with claims under Title III of the ADA, which concerns public accommodations and also the Rehabilitation Act because it is a Medicare HMO.

The patient plaintiffs claimed that they were forced to endure long waits or that medical care was delayed or denied them while non-disabled patients received better treatment, and that the HMO's financial arrangements had something to do with this. They made treating people with disabilities more costly to providers, in this case, a medical group. Some of the things that helped this case survive the motion to dismiss were an affidavit from a former employee of the medical group that supported the claims that the patients with chronic illnesses and with disabilities had longer wait times than patients without disabilities. They also introduced evidence about the contract. It is rather complicated, but essentially, the bigger the loss per patient, the greater the medical group's share or percentage of the loss.

So, the more they lost, it really went up quite a bit in terms of the burden on the medical group and the same thing on the profit side.

The bigger surplus per patient, the greater the medical group's share of that surplus. So the medical group had incentives to try to encourage people who were expensive to treat, to leave the medical group and to find some other provider.

Another important feature of this case is the physicians, because they claim they were terminated by the HMO because they advocated for their patients with disabilities. So, they essentially are making a claim that they suffered discrimination due to association. The court also let that claim go forward. The opinion covers a lot of different topics and the HMO had put up a lot of different defenses. Each of them is very complex but I'm going to touch on them because they'll come up in most managed care cases in this area. The first thing the HMO argued was that they were protected under what's called the insurance safe harbor in the ADA, 501 C, which shields a traditional insurance function from ADA scrutiny, things like medical underwriting or risk writing.

The HMO said you can't attack us because we are shielded by this section of the ADA. The court said first this is a Medicare HMO, so you're not supposed to be doing any risk writing, and in any event, the claims here concern clinical treatment, not the insurance side of managed care. So I think that's an important point. The HMO also said it wasn't covered by Title III. And it's very clear that Title III covers hospitals and doctors' offices and then it extends to the entities that have a right to control a public accommodation. The court said well, if you regulate health care decisions made by the medical group, including referrals and admissions and you attempt to monitor and influence utilization patterns then you would be subject to Title III. So the court said that is a fact question that will be decided at trial, but we are going to let that go forward.

Finally the HMO said this is just a case of desperate impact. We are using cost control measures and that will result in some denials of requests for care, and if people with disabilities have more requests, then they will have more requests denied, but that is not discrimination. And the court said listen, we have specific allegations that delays and denials are disability based, so that is a question of fact for trial. We are going to watch very carefully what happens in that case.

I had mentioned the Carter case from California, and there is also a claim in that case based on the ADA, not just Medicaid. They have some state law claims as well. They point to the same sorts of features that some physicians did not want to accept people with disabilities as their patients because of their higher needs or perceived higher needs. Also a claim that the reimbursement scheme didn't adjust for severity of disability. So, there was a financial interest in accepting only patients with less severe disabilities.

In private insurance plans, in addition to Title III of the ADA, there are some anti-discrimination protections under the Health Insurance Portability and Accountability Act for group health plans and also in cases of certain employer provided insurance, the Employee Retirement Income Security Act or ERISA, imposes certain objections on plan administrators. So in many of the class actions that are being brought that are generating a lot of head lines, they are actually being brought under ERISA. I think Wendy had referred to state law. I just wanted to mention that there is a whole list of different types of state laws that may prove helpful.

There are managed care laws that, for example, in emergency care, impose a prudent lay-person's standard that can be helpful. Often time state laws will provide specific time lines that managed care plans have to meet in performing utilization review, either up front where preauthorization is required, or in reviewing claims. There are civil rights laws that may have more extensive remedies than the ADA. There are laws relating specifically to public assistance programs, Medicaid and also now the Children's Health Insurance Program. And there are special trade practice acts and other consumer protection laws. When you look at state laws, one very complex area is preemption by ERISA, the Employment Retirement Income Security Act. If anybody is really fascinated by that subject, perhaps we can address it in the question and answer period. But since we're running out of time, I'm going to turn it back over to Wendy just to say a few words about enforcement.

There are a number of avenues for enforcement, but in regard to Medicaid and Medicare plans, it's the U. S. Department of Health and Human Services through the Office of Civil Rights. They enforce the nondiscrimination laws, both Section 504 and the Americans with Disabilities Act. You can simply file an administrative complaint. It's easy process similar to what the Department of Justice does and you don't need an attorney. You have 180 days to file your complaint. They need your name, address, date of incident, phone numbers. Very simple. We do have a fact sheet on OCR discrimination. A complaint form is available on their website and there is an 800 number where you can get that type of information.

Thanks, Wendy. We will have all those listed with the transcript as well. If you could come back on in a second to give instructions for people to ask questions

If you indeed have a question, please press the 1 on your touch tone phone. You'll been placed in queue and we'll take each of the questions in the order that they come in. If you would like to remove yourself from queue you may do so by pressing the pound key and also you may need to pick up a handset before pressing the 1 otherwise it may not register if you do indeed have a question

I would like to also encourage people that if you do have a question, we're going to talk more generally on the issues of managed care. If you have a question that is personal in nature, I would encourage you to contact your regional Disability and Business Technical Assistance Center directly and speak with a technical assistance specialist there.

A question from the University of California. Please go ahead

Hi. We're an employer, we're attending this from an employer's perspective and many of your comments were directed towards providers and health plans. We're curious if you could address the responsibilities employers have in designing their benefit plans under both the ADA and the Rehab Act.

That us obviously an important piece to do the review, to make sure that there are some accessible providers, hopefully more than "some." And that the financial arrangements are such that providers don't try to dodge their responsibilities to people with disabilities or try to get rid of them. I have back in the office a number of booklets prepared specifically for employers, and what might be best to take a name and perhaps an e-mail address and to get in touch with you and to share some of those resources that are more in the nature of checklists of things to look at and what some innovative employers are doing in this area.

We can go ahead with that link to the web site too.

That sounds like a good thing.

I do believe that we have a question from our chat room. I'll send that over to Robin.

What are the capitation rates for people with disabilities compared to people without disabilities?

I don't have specific numbers. In the Carter case, they were staying they wanted risk adjust. There was a higher rate for the SSI population, but they were saying that just having one rate for everybody with disabilities is not sufficient. You need to break that out a little bit more. I know in the Massachusetts case, where they actually had a fairly successful program based on a fee for service rate. I think that is often what is done. They look at what the state is currently paying for that population, because that varies widely among the states, and then they set it at 95 percent or 90 percent, counting on some savings. Again, if you would like more detailed information, I think I have that. I don't have it here with me right now, but I can get information to you after the teleconference or we can put up links on the web site.

Yes, my name is Teresa White. My question is, I noticed on page 3 they make reference to wrap around services. I think I know what that means, but could you give me an example of what that is?

In this case, what wrap around services meant was that this person was a significant degree of home health care for pretty much 24-hour services. And that meant a number of different things, the full range and gamut of attendant care services.

Thanks Wendy. Do we have another question?

I was wondering if you could basically give us a quick definition between a PPO and HMO? And do you think the HMOs will they eventually become more service oriented to the consumer?

It really varies. Usually a PPO is a loosing arrangement. There are different models of HMOs and that is why it gets confusing. In some HMOs you have to use a network physician. If you go outside the network there is absolutely no coverage and no support. The PPO, the original idea was that we just have a preferred list of providers and if you use the preferred provider that that is on the preferred list, then either you are only responsible for a small co-pay or you have to pay 20 percent, but 80 percent is covered let's say in a PPO. If you use another physician that is not in our preferred provider network, then we'll only pay 50 percent of the covered charge or only 20 percent. So HMOs tend to have more restrictions in terms of either you are in network or you are out.

If you are in, it is all covered, and if you are out, none of it is covered. Whereas a PPO originally at least had more gradations. But there are HMOs with point of service features so that kind of shades towards a PPO because it means that you can actually get some payment when you go outside. In legal terms, the significance often arises because many laws are only targeted at health maintenance organizations, and so a PPO might not fit the definition of an HMO or even a managed care organization. So they tend to be less regulated.

Another way of saying that is if you look at state laws, insurance regulation will often have different chapters for different kinds of entities, and originally they regulated insurance. Then this new thing came along called a health maintenance organization and so they created a chapter for health maintenance organizations. And some of them now have another section that addresses what preferred provider organization or a PPO needs to do to be licensed in that state. But in some states that is just a gap.

So, you are likely to find a chapter that sets out specific standards for health maintenance organizations, but if it is another kind of entity, then they may not have those kind of independent regulations. They might be regulated as an insurer or as a provider, but most states have some kind of law for health maintenance organizations or HMOs and it will contain a description of what that is. It usually means some restrictions on a network of providers, and that tends to be the primary feature in terms of state laws. They may or may not have a section that covers preferred provider organizations that have some restrictions but you can still get coverage if you go outside of network.

Could you talk about the extent to which the managed care provider can refuse coverage altogether or refuse conditions specific coverage based on a preexisting condition and how that fits with federal and state laws that say that you must base decisions on sound actuarial principles?

Preexisting conditions and how that fits in with state and federal laws, that is an area where obviously the kind of health plan coverage that you have matters. If you've got public coverage, you probably don't have to address that at all. If you have got private coverage, if it is a group health plan, then you look at the Health Insurance Portability and Accountability Act, because that really was a major target of that legislation.

If you are in a group health plan-going into one or in one currently, then there shouldn't be pre-existing condition clauses. If you are going from one group health plan to another or to individual insurance, I believe that what is called the Health Insurance Portability and Accountability Act (HIPA) still permits some preexisting condition clauses but they are provisions that say that you have to credit previous coverage against that and it can only be for twelve months. This is something else that we should put up on the website, that the Health Insurance Portability and Accountability Act is probably the main thing that you want to look at because it directly addresses preexisting condition clauses.

If you don't have that, you fall back on the ADA and the state laws that generally regulate insurance that simply require usually some sort of actuarial basis for that provision. There it gets very difficult because how do you get access to that information? Because there are some cases out there that suggest that there is not an affirmative obligation on the insurance company to come forward and justify the way they write their policy-hat you kind of have to root out the information. The burden of proof is on the plaintiff to make the case, that it really isn't justified, which is much harder.

I think we have a section in the outline that concerns 501 C. I will double-check and make sure that that more extensive information gets up there and I'll also put up some information specifically on the HIPAA provisions that address preexisting conditions.

Well, we are coming up on the close of the hour, so we'll add one or two more questions and then I'll throw it back to each of you for a brief closing comments.

Good afternoon (inaudible). My question is...

We are having problems with that one. Can you go ahead and drop that line? I apologize for that. If you could call your regional Disability and Business Technical Assistance Center, we'll address that question. Sorry about the feedback from the speaker phone there. We'll go back to Wendy and Mary then for your closing comments.

You've seen it in our responses that this is a very complicated area, in part because managed care itself is complicated. You've got all the acronyms, the HMOs the PPOs, POSs and the legal terrain is complicated because there are so many different bodies of law that might apply. But we are sort of feeling our way through and I think the way we make progress is by hearing the questions and then we go back and we find the specific areas that seem to be most helpful on that particular issue or in that particular case. We've been working on this project for over a year now and initially I think it was a little discouraging. But we finally realized that we're all learning together and that we're finally getting to make some progress, and the cases are finally beginning to work their way through the courts and perhaps we'll have some change. I think what would really simplify matters is if Congress would enact one system of federal patient protections to cover all consumers in managed care. But it doesn't look like that's going to happen any time soon.

As Mary said, as we've learned this past year, it's a complicated myriad of laws that come together that can provide people protection. But what I have found is that there is hope and there is, as I mentioned before, power in these laws as we saw with the Supreme Court's interpretation of the integration mandate. And as I've had an opportunity to look at some complaints that have been filed since then is that there are some real creative uses of the nondiscrimination mandates of the ADA and Section 504 and also helpful language in a lot of the state insurance protection laws. I would encourage folks to really carefully explore those informal mechanisms and administrative processes that are open and available. You just really need to know how to get a hold of that thing. It takes a lot of patients and persistence, but we have seen a lot of success stories and you can get results.

We certainly appreciate both of you being with us today. You've provided a wealth of information and hopefully a basic foundation for people to go out there now that we have identified some of the issues and some of the resources that people can look to as they access managed care. Thank you again to both of you. Thank you to everyone that has called in today. I'd like to give you a little teaser for January. The January 18th session will be on the Interplay between the Americans with Disabilities Act and the Family Medical Leave Act.

For those of you looking further on down the calendar, please note that the February and March sessions has been flip-flopped so that people can participate in the period of public comment for the Access Board. So the proposed changes on the ADA accessibility guidelines will be held on February 15th and that will feature Marsha Mazz from the Access Board, highlighting some of the changes in rule making. The effective communication session will be held on March 21st. That will feature Mark Charmatz from the Law Center for the National Association of the Deaf. We've that to look forward to in the coming months. We thank you for participating with us today. And certainly if you have more questions, please do feel free to call your regional Disability and Business Technical Assistance Center at 800-949-4232.