Participatory Rulemaking in State Government: A Managed Care Success Story

In June 1997, the Missouri Department of Insurance ("DOI") was presented with a massive undertaking: implementation of Senate Substitute for Senate Committee Substitute for House Substitute for House Committee Substitute for House Bill 335 ("HB 335"). The bill enacted sweeping reforms of the managed health care system, incorporating "some of the strongest consumer protections in the country." Prior to 1997, the DOI's authority over managed care, and hence its expertise, was limited. Furthermore, the bill contained a variety of controversial and complex issues, so implementation of the legislation was certain to be difficult both politically and technically. This Comment examines the rulemaking process as established by the Missouri Administrative Procedure Act and the costs and benefits that an extensive, participatory process for rulemaking may have for state agencies, the public, and the regulated industry.

Specifically, this Comment will focus on the participatory process leading up to the promulgation of three rules generated as a result of the passage of HB 335. The participatory process for the three rules-concerning a standardized credentialing form, the delivery of prescription drugs, and the adequacy of a Health Maintenance Organization's ("HMO's") network of health care providers-yielded very different experiences. In general, the process was invaluable to the DOI in the development of implementing rules and is highly recommended to agencies considering rules to put into effect legislative enactments.