Senate Bill No. 373
(By Senators Walker, Bailey, Snyder, Wiedebusch,
Dittmar, Fanning, Plymale, White, Scott, Prezioso, Kimble
and Macnaughtan)
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[Introduced March 19, 1997; referred to the Committee
on Banking and Insurance.]
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A BILL to amend and reenact section fourteen, article twenty- five-a, chapter thirty-three of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, relating
to prohibiting health maintenance organizations from
restricting communications between health care providers and
enrollees.
Be it enacted by the Legislature of West Virginia:
That section fourteen, article twenty-five-a, chapter
thirty-three of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted to read
as follows:
ARTICLE 25A. HEALTH MAINTENANCE ORGANIZATION ACT.
§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. No advertising may be used until it has been approved
by the commissioner. Advertising which has not been disapproved
by the commissioner within sixty days of filing shall be is
considered approved. For purposes of this article:
(a) A statement or item of information shall be is
considered 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 is
considered to be misleading, whether or not it may be literally
untrue if, in the total context in which the statement is made or
the item of information is communicated, the 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 the benefit or advantage or absence
of limitation, exclusion or disadvantage does not in fact exist;
(c) An evidence of coverage shall be is considered 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 is 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 the 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 rules promulgated by the commissioner. No health maintenance
organization shall may 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 and the notice shall include the reasons for the
cancellation or nonrenewal: 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: Provided, however, That the enrollee may
not be disenrolled if the disenrollment would constitute
abandonment of a patient. Any enrollee wrongfully disenrolled
shall be reenrolled.
(3) (a) No health maintenance organization may use in its
name, contracts, logo 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; and
(b) Only those persons that have been issued a certificate
of authority under this article may use the words "health
maintenance organization" or the initials "HMO" in its name,
contracts, logo or literature to imply, directly or indirectly,
that it is a health maintenance organization or hold itself out
to be a health maintenance organization.
(4) The providers of a health maintenance organization who
provide health care services and the health maintenance
organization shall may 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 may enroll more
than three hundred thousand persons in this state: Provided,
That a health maintenance organization may petition the
commissioner to exceed an enrollment of three hundred thousand
persons and, upon notice and hearing, good cause being shown and
a determination made that such an increase would be beneficial to
the subscribers, creditors and stockholders of the organization
or would otherwise increase the availability of coverage to
consumers within the state, the commissioner may, by written
order only, allow the petitioning organization to exceed an
enrollment of three hundred thousand persons.
(6) No health maintenance organization shall may
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 may 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
may sell an enrollment in a health maintenance organization
unless the 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"; (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 applies in the same manner as consumer
transactions.
The form disclosure statement shall may 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 may prohibit an
enrollee from canceling his or her enrollment at any time for any reason except that the 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.
(10) No health maintenance organization may place
restrictions upon any provider, or upon any primary care
physician, which would serve to limit the communication of
medical advice or options available to the enrollee, subscriber
or member. The definitions of terms set forth in section two of
this article govern the interpretation of this subsection.
NOTE: The purpose of this bill is to prohibit health
maintenance organizations from placing restrictions on
communications between a health care provider and his or her
patient.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
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