COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 475
(By Senators Tomblin, Mr. President, and Boley,
By Request of the Executive)
____________
[Originating in the Committee on Banking and Insurance;
reported March 1, 1995, 1995.]
____________
A BILL to amend and reenact sections two, three, four, seven,
eight, nine, eleven, twelve, fourteen, fifteen, sixteen,
seventeen, eighteen, nineteen, twenty-four, twenty-five and
twenty-six, article twenty-five-a, chapter thirty-three of
the code of West Virginia, one thousand nine hundred thirty-
one, as amended; and to further amend said article by adding
thereto two new sections, designated sections three-a and
seven-a, all relating to insurance; health maintenance
organization act; definitions; conditions precedent to
issuance of certificate of authority; application for
certificate of authority; issuance of certificate of
authority; fiduciary duties of officers; approval of
contracts by commissioner; provider contracts; evidence of
coverage; charges for health care services; cancellation of
contract by enrollee; annual report; limitation on Medicare
and Medicare beneficiaries; complaint system; prohibited
practices; regulation of marketing; powers of insurers and
hospital and medical service corporations; examinations; suspension or revocation of certificate of authority;
rehabilitation, liquidation or conservation of health
maintenance organization; statutory construction and
relationship to other laws; filings and reports as public
documents; and confidentiality of medical information.
Be it enacted by the Legislature of West Virginia:
That sections two, three, four, seven, eight, nine, eleven,
twelve, fourteen, fifteen, sixteen, seventeen, eighteen,
nineteen, twenty-four, twenty-five and twenty-six, article
twenty-five-a, chapter thirty-three of the code of West Virginia,
one thousand nine hundred and thirty-one, as amended, be amended
and reenacted; and that said article be further amended by adding
thereto two new sections, designated sections three-a and
seven-a, all to read as follows:
ARTICLE 25A. HEALTH MAINTENANCE ORGANIZATION ACT.
§33-25A-2.Definitions.
(1) "Basic health care services" means physician, hospital,
out-of-area, podiatric, laboratory, X ray, emergency, short-term
mental health services not exceeding twenty outpatient visits in
any twelve-month period, and cost-effective preventive services
including immunizations, well-child care, periodic health
evaluations for adults, voluntary family planning services,
infertility services and children's eye and ear examinations
conducted to determine the need for vision and hearing
corrections.
(2) "Capitation" means the fixed amount paid by a health
maintenance organization to a health care provider under contract with the health maintenance organization in exchange for the
rendering of health care services.
(3) "Commissioner" means the commissioner of insurance.
(4) "Consumer" means any person who is not a provider of
care or an employee, officer, director or stockholder of any
provider of care.
(5) "Copayment" means a specific dollar amount, except as
otherwise provided for by statute, that the subscriber must pay
upon receipt of covered health care services. Copayments must
be reasonable to ensure a subscriber access to health care
services and may not be established in an amount that will
prevent a person from receiving a covered health care service or
benefit as specified in the subscriber contract approved by the
commissioner.
(6) "Employee" means a person in some official employment
or position working for a salary or wage continuously for no less
than one calendar quarter and who is in such a relation to
another person that the latter may control the work of the former
and direct the manner in which the work shall be done.
(7) "Employer" means any individual, corporation,
partnership, other private association, or state or local
government that employs the equivalent of at least two full-time
employees during any four consecutive calendar quarters.
(8) "Enrollee", "subscriber," "member" means an individual
who has been voluntarily enrolled in a health maintenance
organization, including individuals on whose behalf a contractual
arrangement has been entered into with a health maintenance organization to receive health care services.
(9) "Evidence of coverage" means any certificate, agreement
or contract issued to an enrollee setting out the coverage and
other rights to which the enrollee is entitled.
(10) "Health care services" means any services or goods
included in the furnishing to any individual of medical, mental
or dental care, or hospitalization or incident to the furnishing
of such care of hospitalization, osteopathic services, home
health, health education, rehabilitation, as well as the
furnishing to any person of any and all other services or goods
for the purpose of preventing, alleviating, curing or healing
human illness or injury.
(11) "Health maintenance organization or HMO" means a
public or private organization which provides, or otherwise makes
available to enrollees, health care services, including at a
minimum basic health care services which:
(a) Are compensated except for copayments for the provision
of basic health care services to enrollees solely on a prepaid
per capita or prepaid aggregate fixed sum basis;
(b) Provides physicians' services primarily (i) directly
through physicians who are either employees or partners of such
organization, or (ii) through arrangements with individual
physicians or one or more groups of physicians organized on a
group practice or individual practice arrangement, or (iii)
through some combination of (i) and (ii) above;
(c) Assures the availability, accessibility and quality
including effective utilization of the health care services which it provides or makes available through clearly identifiable focal
points of legal and administrative responsibility; and
(d) Offers services through a managed care system, in which
a primary physician is designated for each subscriber upon
enrollment. The primary care physician is responsible for
coordinating the health care of the subscriber and is responsible
for referring the subscriber to other providers when necessary.
(12) "Impaired" means a financial situation in which, based
upon the financial information which would be required by this
chapter for the preparation of the health maintenance
organization's annual statement, the assets of the health
maintenance organization are less than the sum of all of its
liabilities and required reserves including any minimum capital
and surplus required of the health maintenance organization by
this chapter so as to maintain its authority to transact the
kinds of business or insurance it is so authorized to transact.
(13) "Individual practice arrangement " means any agreement
or arrangement to provide medical services on behalf of a health
maintenance organization among or between physicians or between
a health maintenance organization and individual physicians or
groups of physicians, where the physicians are not employees or
partners of such health maintenance organization and are not
members of or affiliated with a medical group.
(14) "Insolvent" or "insolvency" means a financial situation
in which, based upon the financial information which would be
required by this chapter for the preparation of the health
maintenance organization's annual statement, the assets of the health maintenance organization are less than the sum of all of
its liabilities and required reserves.
(15) "Medical group" or "group practice" means: (a) A
professional corporation, partnership, association, or other
organization which is: (a) composed solely of health
professionals licensed to practice medicine or osteopathy and of
such other licensed health professionals, including podiatrists,
dentists and optometrists, as are necessary for the provision of
health services for which the group is responsible; (b) a
majority of the members of which are licensed to practice
medicine or osteopathy; (c) as their principal professional
activity engage in the coordinated practice of their profession;
(d) pool their income for practice as members of the group and
distribute it among themselves according to a prearranged salary,
drawing account or other plan; and (e) share medical and other
records and substantial portions of major equipment and
professional, technical and administrative staff.
(16) "Premium" means a prepaid per capita or prepaid
aggregate fixed sum unrelated to the actual or potential
utilization of services of any particular person which is charged
by the health maintenance organization for health services
provided to an enrollee.
(17) "Provider" means any physician, hospital or other
person or organization which is licensed or otherwise authorized
in this state to furnish health care services.
(18) "Uncovered Expenses" means the cost of health care
services that are covered by a health maintenance organization, for which a subscriber would also be liable in the event of the
insolvency of the organization.
(19) "Service area" means the county or counties approved
by the commissioner within which the health maintenance
organization may provide or arrange for health care services to
be available to its subscribers .
(20) "Statutory surplus" means the minimum amount of
unencumbered surplus which a corporation must maintain pursuant
to the requirements of this article.
(21) "Surplus" means the amount by which a corporation's
assets exceeds its liabilities and required reserves based upon
the financial information which would be required by this chapter
for the preparation of the corporation's annual statement except
that assets pledged to secure debts not reflected on the books of
the health maintenance organization shall not be included in
surplus.
(22) "Surplus notes" means debt which has been subordinated
to all claims of subscribers and general creditors of the
organization.
(23) "Qualified independent actuary" means an actuary who is
a member of the American Academy of Actuaries or the Society of
Actuaries and has experience in establishing rates for health
maintenance organizations and who has no financial or employment
interest in the health maintenance organization.
§33-25A-3a. Conditions precedent to issuance or maintenance of
a certificate of authority; effect of bankruptcy
proceedings.
(1) As a condition precedent to the issuance or maintenance
of a certificate of authority, a health maintenance organization
must file or have on file with the commissioner:
(a) An acknowledgment that a delinquency proceeding pursuant
to article ten of this chapter or supervision by the commissioner
pursuant to article thirty-four of this chapter constitutes the
sole and exclusive method for the liquidation, rehabilitation,
reorganization, or conservation of a health maintenance
organization.
(b) A waiver of any right to file or be subject to a
bankruptcy proceeding.
(2) The commencement of a bankruptcy proceeding either by or
against a health maintenance organization shall, by operation of
law:
(a) Terminate the health maintenance organization's
certificate of authority.
(b) Vest in the commissioner for the use and benefit of the
subscribers of the health maintenance organization the title to
any deposits of the HMO held by the commissioner.
If the proceeding is initiated by a party other than the health
maintenance organization, the operation of subsection (2) shall
be stayed for a period of sixty days following the date of
commencement of the proceeding.
§33-25A-3b. Application for certificate of authority.
(1) Notwithstanding any law of this state to the contrary,
any person may apply to the commissioner for and obtain a
certificate of authority to establish or operate a health maintenance organization in compliance with this article. No
person shall sell health maintenance organization enrollee
contracts, nor shall any health maintenance organization commence
services, prior to receipt of a certificate of authority. Any
person may, however, establish the feasibility of a health
maintenance organization prior to receipt of a certificate of
authority through funding drives and by receiving loans and
grants. .
(2) Every health maintenance organization in operation as of
the effective date of this article shall submit an application
for a certificate of authority under this section within thirty
days of the effective date of this article. Each such applicant
may continue to operate until the commissioner acts upon the
application. In the event that an application is denied pursuant
to section four of this article, the applicant shall henceforth
be treated as a health maintenance organization whose certificate
of authority has been revoked. Provided, That all health
maintenance organizations in operation for at least five years
are exempt from filing applications for a new certificate of
authority.
(3) The commissioner may require any organization providing
or arranging for health care services on a prepaid per capita or
prepaid aggregate fixed sum basis to apply for a certificate of
authority under this article. Any organization directed to apply
for a certificate of authority shall be subject to the provisions
of subsection (2) of this section.
(4) Each application for a certificate of authority shall be verified by an officer or authorized representative of the
applicant, shall be in a form prescribed by the commissioner, and
shall set forth or be accompanied by any and all information
required by the commissioner, including:
(a) The basic organizational document;
(b) The bylaws or rules and regulations;
(c) A list of the names, addresses and official positions of
each member of the governing body, which shall contain a full
disclosure in the application of any financial interest by such
officer or member of the governing body or any provider or any
organization or corporation owned or controlled by such person
and the health maintenance organization and the extent and nature
of any contract or financial arrangements between such persons
and the health maintenance organization;
(d) Description of the health maintenance organization;
(e) A copy of each evidence of coverage form and of each
enrollee contract form;
(f) Financial statements which include the assets,
liabilities and sources of financial support of the applicant and
any corporation or organization owned or controlled by the
applicant;
(g) (i) A description of the proposed method of marketing
the plan: (ii) A schedule of proposed charges; and (iii) a
financial plan which includes a three-year projection of the
expenses and income and other sources of future capital;
(h) A power of attorney duly executed by such applicant, if
not domiciled in this state, appointing the commissioner and his successors in office, and duly authorized deputies, as the true
and lawful attorney of such applicant in and for this state upon
whom all lawful process in any legal action or proceeding against
the health maintenance organization on a cause of action arising
in this state may be served;
(i) A statement reasonably describing the service area or
areas to be served and the type or types of enrollees to be
served;
(j) A description of the complaint procedures to be utilized
as required under section twelve of this article;
(k) A description of the mechanism by which enrollees will
be afforded an opportunity to participate in matters of policy
and operation under section six of this article; and
(l) A complete biographical statement on forms prescribed by
the commissioner and an independent investigation report on all
of the individuals referred to in subdivision (c) of this section
and all officers, directors and persons holding five percent (5%)
or more of the common stock of the organization;
(m) A comprehensive feasibility study, performed by a
qualified independent actuary in conjunction with a certified
public accountant which shall contain a certification by the
qualified actuary and an opinion by the certified public
accountant as to the feasibility of the proposed organization.
The study shall be for the greater of three years or until the
health maintenance organization has been projected to be
profitable for twelve consecutive months. The study must show
that the health maintenance organization would not, at the end of any month of the projection period, have less than the minimum
capital and surplus as required by subparagraph (ii), subdivision
(c), subsection (2), section four of this article. The qualified
independent actuary shall certify that: The rates are neither
inadequate nor excessive nor unfairly discriminatory; the rates
are appropriate for the classes of risks for which they have been
computed; the rating methodology is appropriate, such
certification shall include an adequate description of the rating
methodology showing that such methodology follows consistent and
equitable actuarial principles; the health maintenance
organization is actuarially sound, which certification shall
consider the rates, benefits, and expenses of, and any other
funds available for the payment of obligations of, the
organization; the rates being charged or to be charged are
actuarially adequate to the end of the period for which rates
have been guaranteed; and incurred but not reported claims and
claims reported but not fully paid have been adequately provided
for;
(n) Such other information as the commissioner may require
to be provided.
(5) A health maintenance organization shall, unless
otherwise provided for by regulations promulgated by the
commissioner, file notice prior to any modification of the
operations or documents filed pursuant to this section or as the
commissioner may require by regulation. If the commissioner does
not disapprove of the filing within ninety days of filing, it
shall be deemed approved and may be implemented by the health maintenance organization.
§33-25A-4. Issuance of certificate of authority.
(1) Upon receipt of an application for a certificate of
authority, the commissioner shall determine whether the
application for a certificate of authority, with respect to
health care services to be furnished has demonstrated:
(a) The willingness and potential ability to assure that
basic health services will be provided in such a manner as to
enhance and assure both the availability and accessibility of
adequate personnel and facilities;
(b) Arrangements for an ongoing evaluation of the quality of
health care;
(c) A procedure to develop, compile, evaluate and report
statistics relating to the cost of its operations, the pattern of
utilization of its services, the quality, availability and
accessibility of its services, and such other matters as may be
reasonably required by regulation.
(2) The commissioner shall issue or deny a certificate of
authority to any person filing an application within one hundred
twenty days after receipt of the application. Issuance of a
certificate of authority shall be granted upon payment of the
application fee prescribed, if the commissioner is satisfied that
the following conditions are met:
(a) The health maintenance organization's proposed plan of
operation meets the requirements of subsection (1) of this
section;
(b) The health maintenance organization will effectively provide or arrange for the provision of at least basic health
care services on a prepaid basis except for copayments:
Provided, That nothing herein shall be construed to relieve a
health maintenance organization from the obligations to provide
health care services because of the nonpayment of copayments
unless the enrollee fails to make payment in at least three
instances over any twelve-month period: Provided, however, That
nothing herein shall permit a health maintenance organization to
charge copayments to medicare beneficiaries or medicaid
recipients in excess of the copayments permitted under those
programs, nor shall a health maintenance organization be required
to provide services to such medicare beneficiaries or medicaid
recipients in excess of the benefits compensated under such
programs;
(c) The health maintenance organization is financially
responsible and may reasonably be expected to meet its
obligations to enrollees and prospective enrollees. In making
this determination, the commissioner may consider:
(i) The financial soundness of the health maintenance
organization's arrangements for health care services and proposed
schedule of charges used in connection therewith;
(ii) That the health maintenance organization shall have and
maintain fully paid in capital stock, if a for profit stock
corporation, or statutory surplus, funds, if a nonprofit
corporation, of at least one million dollars. In addition, each
such health maintenance organization shall have and maintain
additional surplus funds of at least one million dollars: Provided, That health maintenance organizations duly licensed
under this article prior to the effective date of this section
whose fully paid-in capital stock and surplus requirements are
increased by virtue of this section shall be required to maintain
fully paid in capital stock, if a for profit stock corporation,
or statutory surplus funds, if a nonprofit corporation, be at
least two hundred fifty thousand dollars and additional surplus
funds of two hundred fifty thousand dollars after the first day
of January, one thousand nine hundred ninety-two. Any such
corporation shall then be subject to the full paid-in capital and
surplus requirements of this section after the first day of
January, one thousand nine hundred ninety-four;
(iii) Any arrangements which will guarantee for the
continuation of benefits and payments to providers for services
rendered both prior to and after insolvency for the duration of
the contract period for which payment has been made, except that
benefits to members who are confined on the date of insolvency in
an inpatient facility shall be continued until their discharge
(iv) Any agreement with providers for the provision of
health care services; and
(d) Reasonable provisions have been made for emergency and
out-of-area health care services;
(e) The enrollees will be afforded an opportunity to
participate in matters of policy and operation pursuant to
section six of this article;
(f) The health maintenance organization has demonstrated
that it will assume full financial risk on a prospective basis for the provision of health care services, including hospital
care: Provided, That the requirement of this subdivision shall
not prohibit a health maintenance organization from obtaining
insurance or making other arrangements:
(i) For the cost of providing to any enrollee health care
services, the aggregate value of which exceeds four thousand
dollars in any year;
(ii) For the cost of providing health care services to its
members on a nonelective emergency basis, or while they are
outside the area served by the organization; or
(iii) For not more than ninety-five percent of the amount by
which the health maintenance organization's costs for any of its
fiscal years exceed one hundred five percent of its income for
such fiscal years;
(g) The ownership, control, and management of the entity is
competent and trustworthy and possesses managerial experience
that would make the proposed health maintenance organization
operation beneficial to the subscribers. The commissioner may,
at his or her discretion, refuse to grant or continue authority
to transact the business of a health maintenance organization in
this state at any time during which the commissioner has good
reason to believe that the ownership, control, or management of
the organization includes any person whose business operations
are or have been marked by business practices or conduct that is
to the detriment of the public, stockholders, investors, or
creditors;
(h) The health maintenance organization has deposited and maintained in trust with the state treasurer, for the protection
of its subscribers or its subscribers and creditors, cash or
government securities eligible for the investment of capital
funds of domestic insurers as described in section seven of
article eight of this chapter in the amount of one hundred
thousand dollars.
(3) A certificate of authority shall be denied only after
compliance with the requirements of section twenty-one of this
article.
(4) Except as provided in subsection (2), section three of
this article, no person who has not been issued a certificate of
authority shall use the words "health maintenance organization"
or the initials "HMO" in its name, contracts or literature:
Provided, That persons who are operating under a contract with,
operating in association with, enrolling enrollees for, or
otherwise authorized by a health maintenance organization
licensed under this article to act on its behalf may use the
terms "health maintenance organization" or "HMO" for the limited
purpose of denoting or explaining their association or
relationship with the authorized health maintenance organization.
No health maintenance organization which has a minority of board
members who are consumers shall use the words "consumer
controlled" in its name or in any way represent to the public
that it is controlled by consumers.
§33-25A-7. Fiduciary responsibilities of officers; approval of
contracts by commissioner.
(a) Any director, officer or partner of a health maintenance organization who receives, collects, disburses or invests funds
in connection with the activities of such organization shall be
responsible for such funds in a fiduciary relationship to the
enrollees.
(b) Any contracts made with providers of health care
services enabling a health maintenance organization to provide
health care services authorized under this article shall be filed
with the commissioner. The commissioner shall have power to
require immediate cancellation of such contracts whenever he
determines that they provide for excessive payments, or that they
fail to include reasonable incentives for cost control, or that
they otherwise substantially and unreasonably contribute to
escalation of the costs of providing health care services to
enrollees.
§33-25A-7a. Provider Contracts.
(1) Whenever a contract exists between a health maintenance
organization and a provider and the organization fails to meet
its obligations to pay fees for services already rendered to a
subscriber, the health maintenance organization shall be liable
for such fee or fees rather than the subscriber; and the contract
shall so state.
(2) No subscriber of an HMO shall be liable to any provider
of health care services for any services covered by the HMO if at
any time during the provision of such services, the provider, or
its agents, are aware the subscriber is an HMO enrollee.
(3) No provider of services or any representative of such
provider shall collect or attempt to collect from an HMO subscriber any money for services covered by an HMO and no
provider or representative of such provider may maintain any
action at law against a subscriber of an HMO to collect money
owed to such provider by an HMO.
(4) Every contract between an HMO and a provider of health
care services shall be in writing and shall contain a provision
that the subscriber shall not be liable to the provider for any
services covered by the subscriber's contract with the HMO.
(5) The provisions of this section shall not be construed to
apply to the amount of any deductible or copayment which is not
covered by the contract of the HMO.
(6) For all provider contracts executed on or after the
fifteenth day of April, one thousand nine hundred ninety-five and
within one hundred eighty days of said date for contracts in
existence on that date:
(a) The contracts must provide that the provider shall
provide sixty days advance written notice to the health
maintenance organization and the commissioner before canceling
the contract with the health maintenance organization for any
reason;
(b) The contract must also provide that nonpayment for goods
or services rendered by the provider to the health maintenance
organization shall not be a valid reason for avoiding the sixty
day advance notice of cancellation; and
(c) Any health care provider may participate in an HMO
provided he or she agree to the terms and conditions of
participation.
(7) Upon receipt by the health maintenance organization of
a sixty day cancellation notice, the health maintenance
organization may, if requested by the provider, terminate the
contract in less than sixty days if the health maintenance
organization is not financially impaired or insolvent.
§33-25A-8. Evidence of coverage; charges for health care
services; cancellation of contract by enrollee.
(1)(a) Every enrollee is entitled to evidence of coverage in
accordance with this section. The health maintenance
organization or its designated representative shall issue the
evidence of coverage.
(b) No evidence of coverage, or amendment thereto, shall be
issued or delivered to any person in this state until a copy of
the form of the evidence of coverage, or amendment thereto, has
been filed with and approved by the commissioner.
(c) An evidence of coverage shall contain a clear, concise
and complete statement of:
(i) The health care services and the insurance or other
benefits, if any, to which the enrollee is entitled;
(ii) Any exclusions or limitations on the services, kind of
services, benefits, or kind of benefits, to be provided,
including any copayments;
(iii) Where and in what manner information is available as
to how services, including emergency and out-of-area services,
may be obtained;
(iv) The total amount of payment and copayment, if any, for
health care services and the indemnity or service benefits, if any, which the enrollee is obligated to pay with respect to
individual contracts, or an indication whether the plan is
contributory or noncontributory with respect to group
certificates; and
(v) A description of the health maintenance organization's
method for resolving enrollee complaints.
(d) Any subsequent approved change in an evidence of
coverage shall be issued to each enrollee.
(e) A copy of the form of the evidence of coverage to be
used in this state, and any amendment thereto, shall be subject
to the filing and approval requirements of subdivision (b),
subsection (1) of this section, unless the commissioner
promulgates a regulation dispensing with this requirement or
unless it is subject to the jurisdiction of the commissioner
under the laws governing health insurance or, hospital or
medical service corporations, in which event the filing and
approval provisions of such laws shall apply. To the extent,
however, that such provisions do not apply the requirements in
subdivision (c), subsection (1) of this section, shall be
applicable.
(2) Premiums may be established in accordance with
actuarial principles: Provided, That premiums shall not be
excessive, inadequate, or unfairly discriminatory. A
certification by a qualified independent actuary shall accompany
the filing and, shall certify that: The rates are neither
inadequate nor excessive nor unfairly discriminatory; that the
rates are appropriate for the classes of risks for which they have been computed; provide an adequate description of the rating
methodology showing that such methodology follows consistent and
equitable actuarial principles; and the rates being charged are
actuarially adequate to the end of the period for which rates
have been guaranteed. In determining whether such charges are
reasonable, the commissioner shall consider whether such health
maintenance organization has (a) made a vigorous, good faith
effort to control rates paid to health care providers; (b)
established a premium schedule, including copayments, if any,
which encourages enrollees to seek out preventive health care
services; and (c) has made a good faith effort to secure
arrangements whereby basic services can be obtained by
subscribers from all local providers to the extent that such
providers offer such services.
(3) Rates are inadequate if the premiums derived from the
rating structure, plus investment income, co-payments, and
revenues from coordination of benefits and subrogation,
fees-for-service and reinsurance recoveries are not set at a
level at least equal to the anticipated cost of medical and
hospital benefits during the period for which the rates are to be
effective, and the other expenses which would be incurred if
other expenses were at the level for the current or nearest
future period during which the HMO is projected to make a profit.
For this analysis, investment income shall not exceed three
percent of total projected revenues.
(4) The commissioner shall within a reasonable period
approve any form if the requirements of subsection (1) are met and any schedule of charges if the requirements of subsection (2)
are met. It shall be unlawful to issue such form or to use such
schedule of charges until approved. If the commissioner
disapproves of such filing, he shall notify the filer promptly.
In the notice, the commissioner shall specify the reasons for his
or her disapproval and the findings of fact and conclusions which
support his or her reasons. A hearing will be granted by the
commissioner within fifteen days after a request in writing, by
the person filing, has been received by the commission. If the
commissioner does not disapprove any form or schedule of charges
within sixty days of the filing of such forms or charges, they
shall be deemed approved.
(5) The commissioner may require the submission of whatever
relevant information in addition to the schedule of charges which
he deems necessary in determining whether to approve or
disapprove a filing made pursuant to this section.
(6) An enrollee shall be allowed to cancel a contract with
a health maintenance organization at any time for any reason
provided that a health maintenance organization may require that
he or she give sixty days notice of disenrollment to such
organization.
§33-25A-9. Annual report.
(1) Every health maintenance organization shall comply with
and be subject to the provisions of section fourteen, article
four of this chapter relating to filing of financial statements
with the commissioner and the national association of insurance
commissioners. The annual financial statement required by said section shall include, but not be limited to, the following:
(a) A statutory financial statement of the organization,
including its balance sheet and receipts and disbursements for
the preceding year certified by an independent certified public
accountant, reflecting at least: (i) All prepayment and other
payments received for health care services rendered; (ii)
expenditures to all providers, by classes or groups of
providers, and insurance companies or nonprofit health service
plan corporations engaged to fulfill obligations arising out of
the health maintenance contract; and (iii) expenditures for
capital improvements, or additions thereto, including, but not
limited to, construction, renovation or purchase of facilities
and capital equipment;
(b) The number of new enrollees enrolled during the year,
the number of enrollees as of the end of the year and the number
of enrollees terminated during the year on a form prescribed by
the commissioner;
(c) A summary of information compiled pursuant to
subdivision (c), subsection (1), section four of this article in
such form as may be required by the department of health or other
accredited entity;
(d) A report of the names and residence addresses of all
persons set forth in subdivision (c), subsection (4), section
three of this article who were associated with the health
maintenance organization during the preceding year, and the
amount of wages, expense reimbursements, or other payments to
such individuals for services to the health maintenance organization, including a full disclosure of all financial
arrangements during the preceding year required to be disclosed
pursuant to subdivision (c), subsection (4), section three of
this article; and
(e) Such other information relating to the performance of
the health maintenance organization as is reasonably necessary to
enable the commissioner to carry out his or her duties under this
article.
§33-25A-11. Open enrollment period; limitation on medicare and
medicaid beneficiaries.
(1) Once a health maintenance organization has been in
operation at least five years, or has enrollment of not less
than fifty thousand persons, such health maintenance
organization shall, in any year following a year in which the
health maintenance organization has achieved an operating
surplus, maintain an open enrollment period of at least thirty
days during which time the health maintenance organization
shall, within the limits of its capacity, accept individuals in
the order in which they apply without regard to preexisting
illness, medical conditions, or degree of disability except for
individuals who are confined to an institution because of
chronic illness or permanent injury: Provided, That no health
maintenance organization shall be required to continue an open
enrollment period after such time as enrollment pursuant to
such open enrollment period is equal to three percent of the
health maintenance organization's net increase in enrollment
during the previous year.
(2) Where a health maintenance organization demonstrates
to the satisfaction of the commissioner that it has a
disproportionate share of high-risk enrollees and that, by
maintaining open enrollment, it would be required to enroll so
disproportionate a share of high-risk enrollees as to
jeopardize its economic viability, the commissioner may:
(a) Waive such requirement for open enrollment for a
period of not more than three years; or
(b) Authorize such organization to impose such
underwriting restrictions upon open enrollment as are necessary
(i) to preserve its financial stability; (ii) to prevent
excessive adverse selection by prospective enrollees; or (iii)
to avoid unreasonably high or unmarketable charges for enrollee
coverage of health services. A health maintenance organization
may receive more than one such waiver or authorization.
(3) The enrollment by a health maintenance organization of
medicare beneficiaries who are at least sixty-five years of age
and medicaid beneficiaries shall not exceed fifty percent of
its total enrollee population. The commissioner may permit by
written order and upon application of a health maintenance
organization, the health maintenance organization to exceed the
fifty percent limitation but in no event may the medicare and
medicaid beneficiaries enrollment exceed seventy-five percent
of its total enrollee population.
§33-25A-12. Complaint system.
(1) A health maintenance organization shall establish and
maintain a complaint system, which has been approved by the commissioner, to provide adequate and reasonable procedures for
the expeditious resolution of written complaints initiated by
enrollees concerning any matter relating to any provisions of
such organization's health maintenance contracts, including,
but not limited to, claims regarding the scope of coverage for
health care services; denials, cancellations or nonrenewals of
enrollee coverage; observance of an enrollee's rights as a
patient; and the quality of the health care services rendered.
(2) A detailed description of the HMO's subscriber
grievance procedure shall be included in all group and
individual contracts as well as any certificate or member
handbook provided to subscribers. This procedure shall be
administered at no cost to the subscriber. An HMO subscriber
grievance procedure must include the following:
(a) Both informal and formal steps shall be available to
resolve the grievance. A grievance is not considered formal
until a written complaint is executed by the subscriber or
completed on such forms as prescribed and received by the HMO;
(b) Each HMO shall designate at least one grievance
coordinator who will be responsible for the implementation of
the HMO's grievance procedure;
(c) Phone numbers shall be specified by the HMO for the
subscriber to call to present an informal grievance or to
contact the grievance coordinator. Each phone number shall be
toll free within the subscriber's geographic area and provide
reasonable access to the HMO without undue delays. There must
be an adequate number of phone lines to handle incoming grievances;
(d) An address shall be included for written grievances;
(e) Each level of the grievance procedure shall have some
person with problem solving authority to participate in each
step of the grievance procedure;
(f) The HMO shall process the formal written subscriber
grievance through all phases of the grievance procedure in a
reasonable length of time not to exceed sixty days, unless the
subscriber and HMO mutually agree to extend the time frame. If
the complaint involves the collection of information outside
the service area, the HMO will have thirty additional days to
process the subscriber complaint through all phases of the
grievance procedure. The time limitations prescribed in this
paragraph requiring completion of the grievance process within
sixty days shall be tolled after the HMO has notified the
subscriber, in writing, that additional information is required
in order to properly complete review of the complaint. Upon
receipt by the HMO of the additional information requested, the
time for completion of the grievance process set forth herein
shall resume.
(g) The subscriber grievance procedure shall state that
the subscriber always has the right to appeal to the
commissioner. There shall be the additional requirement that
subscribers under a group contract between the HMO and a
department or division of the state shall first appeal to the
state agency responsible for administering the relevant
program, and if either of the two parties are not satisfied with the outcome of such appeal, they may then appeal to the
commissioner. The HMO shall provide to the subscriber written
notice of the right to appeal upon completion of the full
grievance procedure and supply the commissioner with a copy of
the final decision letter;
(h) The HMO shall have physician involvement in reviewing
medically related grievances. Physician involvement in the
grievance process should not be limited to the subscriber's
primary care physician, but may include at least one other
physician;
(i) The HMO shall offer to meet with the subscriber during
the formal grievance process. The location of the meeting
shall be at the administrative offices of the HMO within the
service area or at a location within the service area which is
convenient to the subscriber;
(j) The HMO may not establish time limits of less than one
year from the date of occurrence for the subscriber to file a
formal grievance;
(k) Each HMO shall maintain an accurate record of each
formal grievance. Each record shall include the following:
(i) A complete description of the grievance, the subscriber's
name and address, the provider's name and address and the HMO's
name and address; (ii) a complete description of the HMO's
factual findings and conclusions after completion of the full
formal grievance procedure; (iii) a complete description of the
HMO's conclusions pertaining to the grievance as well as the
HMO's final disposition of the grievance; and (iv) a statement as to which levels of the grievance procedure the complaint has
been processed and how many more levels of the grievance
procedure are remaining before the complaint has been processed
through the HMO's entire grievance procedure.
Copies of such complaints and the responses thereto
shall be available to the commissioner, and the public for
inspection for three years.
(3) Any subscriber grievance that involves an issue that
poses an immediate threat to the health or safety of a
subscriber must be handled immediately.
(4) Any subscriber grievance that involves an issue that,
if not resolved immediately or if not resolved in a time period
less than that described in subdivision (f), subsection (2) of
this section, would pose a threat to the health, safety and
welfare of the subscriber or would otherwise aggravate the
medical condition of the subscriber must be handled within ten
days.
§33-25A-14. Prohibited practices.
(1) No health maintenance organization, or representative
thereof, may cause or knowingly permit the use of advertising
which is untrue or misleading, solicitation which is untrue or
misleading, or any form of evidence of coverage which is
deceptive. For purposes of this article:
(a) A statement or item of information shall be deemed to
be untrue if it does not conform to fact in any respect which
is or may be significant to an enrollee of, or person
considering enrollment in, a health maintenance organization;
(b) A statement or item of information shall be deemed to
be misleading, whether or not it may be literally untrue, if,
in the total context in which such statement is made or such
item of information is communicated, such statement or item of
information may be reasonably understood by a reasonable
person, not possessing special knowledge regarding health care
coverage, as indicating any benefit or advantage or the absence
of any exclusion, limitation, or disadvantage of possible
significance to an enrollee of, or person considering
enrollment in, a health maintenance organization, if such
benefit or advantage or absence of limitation, exclusion or
disadvantage does not in fact exist;
(c) An evidence of coverage shall be deemed to be
deceptive if the evidence of coverage taken as a whole, and
with consideration given to typography and format, as well as
language, shall be such as to cause a reasonable person, not
possessing special knowledge regarding health maintenance
organizations, and evidences of coverage therefor, to expect
benefits, services or other advantages which the evidence of
coverage does not provide or which the health maintenance
organization issuing such evidence of coverage does not
regularly make available for enrollees covered under such
evidence of coverage; and
(d) The commissioner may further define practices which
are untrue, misleading or deceptive.
(2) No health maintenance organization may cancel or fail
to renew the coverage of an enrollee except for: (a) Failure to pay the charge for health care coverage; (b) termination of the
health maintenance organization; (c) termination of the group
plan; (d) enrollee moving out of the area served; (e) enrollee
moving out of an eligible group; or (f) other reasons
established in regulations promulgated by the commissioner. No
health maintenance organization shall use any technique of
rating or grouping to cancel or fail to renew the coverage of
an enrollee. An enrollee shall be given thirty days' notice of
any cancellation or nonrenewal, including therein the reason
therefor: Provided, That each enrollee moving out of an
eligible group shall be granted the opportunity to enroll in
the health maintenance organization on an individual basis. A
health maintenance organization may not disenroll an enrollee
for nonpayment of copayments unless the enrollee has failed to
make payment in at least three instances over any twelve-month
period; however, the enrollee may not be disenrolled if the
disenrollment would constitute abandonment of a patient. Any
enrollee wrongfully disenrolled shall be reenrolled.
(3) No health maintenance organization may use in its
name, contracts or literature any of the words "insurance",
"casualty", "surety", "mutual" or any other words which are
descriptive of the insurance, casualty or surety business or
deceptively similar to the name or description of any insurance
or surety corporation doing business in this state: Provided,
That when a health maintenance organization has contracted with
an insurance company for any coverage permitted by this
article, it may so state.
(4) The providers of a health maintenance organization
who provide health care services and the health maintenance
organization shall not have recourse against enrollees for
amounts above those specified in the evidence of coverage as
the periodic prepayment or copayment for health care services.
(5) No health maintenance organization shall enroll more
than three hundred thousand persons in this state. The health
maintenance organization may petition the commissioner to
exceed three hundred thousand persons. The commissioner may
allow the health maintenance organization to exceed the three
hundred thousand person cap without notice and hearing,
provided in his or her sole discretion, the health maintenance
organization has shown cause and the commissioner has
determined the proposed increase in enrollment would be
beneficial to the subscribers, creditors and stockholders of
the organization or would otherwise increase the availability
of coverage to the insurance buying public of the state.
(6) No health maintenance organization shall discriminate
in enrollment policies or quality of services against any
person on the basis of race, sex, age, religion, place of
residence, health status or source of payment: Provided, That
differences in rates based on valid actuarial distinctions,
including, distinctions relating to age and sex, shall not be
considered discrimination in enrollment policies.
(7) No agent of a health maintenance organization or
person selling enrollments in a health maintenance organization
shall sell an enrollment in a health maintenance organization unless such agent or person shall first disclose in writing to
the prospective purchaser the following information using the
following exact terms in bold print: (a) "Services offered,"
including any exclusions or limitations; (b) "full cost,"
including copayments; (c) "facilities available and hours of
services"; (d) "transportation services"; (e) "disenrollment
rate"; and (f) "staff," including the names of all full-time
staff physicians, consulting specialists, hospitals and
pharmacies associated with the health maintenance organization.
In any home solicitation, any three-day cooling-off period
applicable to consumer transactions generally shall apply in
the same manner as consumer transactions.
The form disclosure statement shall not be used in sales
until it has been approved by the commissioner or submitted to
the commissioner for sixty days without disapproval. Any
person who fails to disclose the requisite information prior to
the sale of an enrollment may be held liable in an amount
equivalent to one year's subscription rate to the health
maintenance organization, plus costs and a reasonable
attorney's fee.
(8) No contract with an enrollee shall prohibit an
enrollee from canceling his or her enrollment at any time for
any reason except that such contract may require thirty days'
notice to the health maintenance organization.
(9) Any person who in connection with an enrollment
violates any subsection of this section may be held liable for
an amount equivalent to one year's subscription rate, plus costs and a reasonable attorney's fee.
§33-25A-15. Agent licensing and appointment required;
regulation of marketing.
(1) Health maintenance organizations are subject to the
provisions of article twelve of this chapter.
(2) After a subscriber signs an HMO enrollment application
and before the HMO can process the application changing or
initiating the subscriber coverage, each HMO must verify the
intent and desire of the individual subscriber to join the HMO.
The verification must be in writing and conducted by someone
outside the HMO's marketing department. Each verification
shall include the following:
(a) Confirmation that the subscriber intends and desires
to join the HMO;
(b) If the subscriber is a medicare or medicaid recipient,
confirmation must be provided that the subscriber understands
by joining the HMO they will be limited to the benefits
provided by the HMO, and medicare or medicaid will pay the HMO
for the subscriber coverage;
(c) Confirmation that the subscriber understands the
applicable restrictions of HMOs, especially that they must use
the HMO providers and secure approval from the HMO to use
health care providers outside the plan; and
(d) If the subscriber is a member of an HMO, confirmation
must be provided that the subscriber understands they are
transferring to another HMO.
(e) The HMO shall not pay a commission, fee, money or any other form of scheduled compensation to any health insurance
agent until verification from the subscriber of their intent
and desire to enroll into the HMO has been secured and the
enrollment process has been completed. The HMO shall verify
the intent of the subscriber to enroll with a written notice to
the subscriber stating that they have transferred from their
existing coverage (i.e. from medicare, medicaid, another HMO,
etc.) to the new HMO. Each written verification notice shall be
accompanied with printed materials explaining the nature of the
HMO and any applicable restrictions and exclusions. The
enrollment process shall be deemed complete seven days after
the HMO mails the confirmation notice. Each HMO must notify
the subscriber of the date enrollment begins and when benefits
will be available. Each HMO is directly responsible for
enrollment abuses.
(3) The commissioner may, in his or her discretion, after
notice and hearing, promulgate rules as are necessary to
regulate marketing of health maintenance organizations by
persons compensated directly or indirectly by such health
maintenance organizations. When necessary such rules may
prohibit door-to-door solicitations, may prohibit commission
sales, and may provide for such other proscriptions and other
regulations as are required to effectuate the purposes of this
article.
§33-25A-16. Powers of insurers and hospital and medical
service
corporations.
(1) An insurance company licensed in this state or a
hospital or medical service corporation authorized to do
business in this state, after applying for and receiving a
certificate of authority as a health maintenance organization,
may through a subsidiary or affiliate organize and operate a
health maintenance organization under the provisions of this
article. Notwithstanding any other law which may be
inconsistent herewith, any two or more such insurance
companies, hospital or medical service corporations, or
subsidiaries or affiliates thereof, may jointly organize and
operate a health maintenance organization. The business of
insurance is deemed to include the providing of health care by
a health maintenance organization owned or operated by an
insurer or a subsidiary thereof.
(2) Notwithstanding any provision of insurance and
hospital or medical service corporation laws, an insurer or a
hospital or medical service corporation may contract with a
health maintenance organization to provide insurance or similar
protection against the cost of care provided through health
maintenance organizations and to provide coverage in the event
of the failure of the health maintenance organization to meet
its obligations. The enrollees of a health maintenance
organization constitute a permissible group under such laws.
Among other things, under such contracts, the insurer or
hospital or medical service corporation may make benefit
payments to health maintenance organizations for health care
services rendered by providers.
`(3) Unless specifically permitted by state statute to do
so without such certificate of authority, any entity offering,
providing, arranging for or assuming risk for health care
services on a prepaid aggregate or prepaid fixed sum basis is
deemed to be a health maintenance organization and shall obtain
a certificate of authority from the commissioner before
offering, providing, arranging for or assuming risk for health
care services.
§33-25A-17. Examinations.
(1) The commissioner may make an examination of the
affairs of any health maintenance organization and providers
with whom such organization has contracts, agreements or other
arrangements as often as he deems it necessary for the
protection of the interests of the people of this state but not
less frequently than once every three years.
(2) The commissioner may contract with the department of
health or any entity contracted with by the department of
health which has been accredited by a nationally recognized
accrediting organization to make examinations concerning the
quality of health care services of any health maintenance
organization and providers with whom such organization has
contracts, agreements or other arrangements as often as it
deems necessary for the protection of the interests of the
people of this state but not less frequently than once every
three years: Provided, That in making the foregoing
examination, the department of health or accredited entity
shall utilize the services of persons or organizations with demonstrable expertise in assessing quality of health care.
(3) Every health maintenance organization and affiliated
provider shall submit its books and records to such
examinations and in every way facilitate them. For the purpose
of examinations, the commissioner and the department of health
shall have all powers necessary to conduct such examinations,
including, but not limited to, the power to issue subpoenas,
the power to administer oaths to, and examine the officers and
agents of the health maintenance organization and the
principles of such providers concerning their business.
(4) The health maintenance organization shall be subject
to the provisions of section nine, article two of this chapter
in regard to the expense and conduct of examinations.
(5) In lieu of such examination, the commissioner may
accept the report of an examination made by other states.
§33-25A-18. Suspension or revocation of certificate of
authority.
(1) The commissioner may suspend or revoke any certificate
of authority issued to a health maintenance organization under
this article if he finds that any of the following conditions
exist:
(a) The health maintenance organization is operating
significantly in contravention of its basic organization
document, in any material breach of contract with an enrollee,
or in a manner contrary to that described in and reasonably
inferred from any other information submitted under section
three of this article unless amendments to such submissions have been filed with an approval of the commissioner;
(b) The health maintenance organization issues evidence of
coverage or uses a schedule of premiums for health care
services which do not comply with the requirements of section
eight of this article;
(c) The health maintenance organization does not provide
or arrange for basic health care services;
(d) The department of health or other accredited entity
certifies to the commissioner that: (i) The health maintenance
organization is unable to fulfill its obligations to furnish
health care services as required under its contract with
enrollees; or (ii) the health maintenance organization does not
meet the requirements of subsection (1), section four of this
article;
(e) The health maintenance organization is no longer
financially responsible and may reasonably be expected to be
unable to meet its obligations to enrollees or prospective
enrollees or is otherwise determined by the Commissioner to be
in a hazardous financial condition;
(f) The health maintenance organization has failed to
implement a mechanism affording the enrollees an opportunity to
participate in matters of policy and operation under section
six of this article;
(g) The health maintenance organization has failed to
implement the complaint system required by section twelve of
this article in a manner to reasonably resolve valid
complaints;
(h) The health maintenance organization, or any person on
its behalf, has advertised or merchandised its services in an
untrue, misrepresentative, misleading, deceptive or unfair
manner;
(i) The continued operation of the health maintenance
organization would be hazardous to its enrollees; or
(j) The health maintenance organization has otherwise
failed to substantially comply with this article.
(k) The health maintenance organization has violated a
lawful order of the commissioner.
(2) A certificate of authority shall be suspended or
revoked only after compliance with the requirements of section
twenty-one of this article.
(3) When the certificate of authority of a health
maintenance organization is suspended, the health maintenance
organization shall not, during the period of such suspension,
enroll any additional enrollees except newborn children or
other newly acquired dependents of existing enrollees, and
shall not engage in any advertising or solicitation whatsoever.
(4) When the certificate of authority of a health
maintenance organization is revoked, such organization shall
proceed, immediately following the effective date of the order
of revocation, to terminate its affairs, and shall conduct no
further business except as may be essential to the orderly
conclusion of the affairs of such organization. It shall
engage in no further advertising or solicitation whatsoever.
The commissioner may, by written order, permit such further operation of the organization as he may find to be in the best
interests of enrollees, to the end that enrollees will be
afforded the greatest practical opportunity to obtain
continuing health care coverage.
§33-25A-19. Rehabilitation, liquidation or conservation of
health maintenance organization.
Any rehabilitation, liquidation or conservation of a
health maintenance organization shall be deemed to be the
rehabilitation, liquidation or conservation of an insurance
company, and shall be the exclusive remedy for rehabilitation,
liquidation and conservation as set forth in section three of
this article and shall be conducted under the supervision of
the commissioner pursuant to the law governing the
rehabilitation, liquidation or conservation of insurance
companies. The commissioner may apply for an order directing
him to rehabilitate, liquidate or conserve a health
maintenance organization upon any one or more grounds set out
in the vocational rehabilitation statutes or when, in his or
her opinion, the continued operation of the health maintenance
organization would be hazardous either to the enrollees or to
the people of this state.
§33-25A-24. Statutory construction and relationship to other
laws.
(a) Except as otherwise provided in this article,
provisions of the insurance laws and provisions of hospital or
medical service corporation laws shall not be applicable to any
health maintenance organization granted a certificate of authority under this article. This provision shall not apply
to an insurer or hospital or medical service corporation
licensed and regulated pursuant to the insurance laws or the
hospital or medical service corporation laws of this state
except with respect to its health maintenance corporation
activities authorized and regulated pursuant to this article.
(b) Factually accurate advertising or solicitation
regarding the range of services provided, the premiums and
copayments charged, the sites of services and hours of
operation, and any other quantifiable, nonprofessional aspects
of its operation by a health maintenance organization granted a
certificate of authority, or its representative shall not be
construed to violate any provision of law relating to
solicitation or advertising by health professions: Provided,
That nothing contained herein shall be construed as authorizing
any solicitation or advertising which identifies or refers to
any individual provider or makes any qualitative judgment
concerning any provider.
(c) Any health maintenance organization authorized under
this article shall not be deemed to be practicing medicine and
shall be exempt from the provision of chapter thirty of this
code, relating to the practice of medicine.
(d) The provisions of section fifteen, article four
(general provisions); article six-c (guaranteed loss ratio);
article seven (assets and liabilities); article eight
(investments); article nine (administration of deposits);
article twelve (agents, brokers, solicitors and excess line); section fourteen, article fifteen (individual accident and
sickness insurance); section sixteen, article fifteen (coverage
of children); section eighteen, article fifteen (equal
treatment of state agency); section nineteen, article fifteen
(coordination of benefits with medicaid); article fifteen-b
(uniform health care administration act); section three,
article sixteen (required policy provisions); section three-f,
article sixteen (treatment of temporomandibular disorder and
craniomandibular disorder); section eleven, article sixteen
(coverage of children); section thirteen, article sixteen
(equal treatment of state agency); section fourteen, article
sixteen (coordination of benefits with medicaid); article
sixteen-a (group health insurance conversion); article
sixteen-c (small employer group policies); article sixteen-d
(marketing and rate practices for small employers); article
twenty-seven (insurance holding company systems); article
thirty-four-a (standards and commissioner's authority for
companies deemed to be in hazardous financial condition);
article thirty-five (criminal sanctions for failure to report
impairment); article thirty-seven (managing general agents);
and article thirty-nine (disclosure of material transactions)
shall be applicable to any health maintenance organization
granted a certificate of authority under this article. In
circumstances where such above code provisions made applicable
to health maintenance organizations by this section refer to
the "insurer", the "corporation" or words of similar import,
such language shall be construed to include health maintenance organizations.
(e) Any long-term care insurance policy delivered or
issued for delivery in this state by a health maintenance
organization shall comply with the provisions of article
fifteen-a of this chapter.
§33-25A-25. Filings and reports as public documents.
All applications, filings and reports required under this
article shall be treated as public documents: Provided, That
where the provisions of other articles in this chapter are
applicable to health maintenance organizations, all
applications, filings and reports required under those articles
shall be afforded the level of confidentiality as provided in
those articles.
§33-25A-26. Confidentiality of medical information.
Any data or information pertaining to the diagnosis,
treatment or health of any enrollee or applicant obtained from
such person or from any provider by any health maintenance
organization shall be held in confidence and shall not be
disclosed to any person except: (1) To the extent that it may
be necessary to facilitate an assessment of the quality of care
delivered pursuant to section seventeen of this article or to
review the complaint system pursuant to section twelve of this
article; (2) upon the express written consent of the enrollee
or legally authorized representative; (3) pursuant to statute
or court order for the production of evidence or the discovery
thereof; (4) in the event of claim or litigation between such
person and the health maintenance organization wherein such data or information is pertinent; or (5) to a department or
division of the state pursuant to the terms of a group contract
for the provision of health care services between the HMO and
the department or division of the state. A health maintenance
organization shall be entitled to claim any statutory
privileges against such disclosure which the provider who
furnished such information to the health maintenance
organization is entitled to claim.