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Member, Beacon International Group, Ltd.
JEFFERSON CITY, Mo.--A Missouri Court has blocked the state's insurance department from enforcing rules requiring workers compensation insurers to pay for the services of managed care organizations, even if the insurer has no contract with the managed care organization.
The Alliance of American Insurers, along with a group of individual insurance companies, sued the Missouri Department of Insurance in response to rules the department established in 2002 in connection with a state law passed in 1993. In passing the 1993 legislation, Missouri lawmakers indicated they were seeking to promote the use of managed care techniques in treating injured workers to rein in workers compensation costs.
The rules expired under a sunset provision at the end of 2002 but held workers compensation insurers responsible for managed care organization costs going back to 1993.
In the suit, the plaintiffs argued that an insurer should not be required to reimburse a managed care organization for claims involving injured employees unless there is a contract between the managed care organization and the workers comp insurer.
In the ruling earlier this month, Cole County Circuit Court Judge Thomas J. Brown III held that the retroactive provision in the rules established by the insurance department violated the Missouri Constitution. The judge also held that state law does not authorize the insurance department to force an insurer into a relationship with a managed care organization by allowing an employer, rather than the insurer, to select a managed care organization.