H. B. 2981
(By Delegate H. White)
[Introduced February 12, 2003
; referred to the
Committee on Banking and Insurance then Finance.]
A BILL to amend chapter thirty-three of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated twenty-five-f, relating to
preferred provider organizations and authorizing health care
insurers to enter into preferred provider arrangements giving
enrollees the option of choosing in-network or out-of-network
health care services; establishing standards for approval of
preferred provider benefit plans; requiring that certain
provisions be included in preferred provider benefit plan
policies or certificates; setting forth the circumstances
under which coverage of an enrollee in a preferred provider
benefit plan may be canceled or nonrenewed; requiring coverage for certain health care services related to mammography and
pap smear testing, rehabilitation, child immunization,
emergency treatment, colorectal cancer examination and
laboratory testing, reconstructive surgery following
mastectomy, and mental health treatment; setting forth
required provisions for contracts with preferred providers;
setting forth required provisions for contracts between health
care insurers and third party administrators when third party
administrators are providing the preferred provider
organization; requiring all rates for preferred provider
benefit plans to not be excessive, inadequate or unfairly
discriminatory and requiring that all rates and forms for
preferred provider benefit plans to be filed and approved by
the insurance commissioner; requiring that enrollees receive
from the health care insurer issuing the preferred provider
benefit plan a provider roster and requiring that all
advertising materials comply with article eleven, chapter
thirty-three of the West Virginia code; allowing health care
insurers offering preferred provider benefit plans prior to
the effective date of the article to file all rates and forms
within ninety days of the effective date and to continue operating the plans pending approval or denial of the rates
and forms; authorizing the insurance commissioner to
promulgate rules as necessary to administer the article; and
authorizing the insurance commissioner to hold hearings on
alleged violations of the article and to assess penalties or
suspend or revoke the health care insurer's license for
determined violations.
Be it enacted by the Legislature of West Virginia:
That chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by adding
thereto a new article, designated twenty-five-f, to read as
follows:
ARTICLE 25F. PREFERRED PROVIDER ARRANGEMENT ACT.
§33-25F-1. Preferred provider arrangement act; purpose.
This article shall be known as the "Preferred Provider
Arrangement Act." It is the Legislature's intent to encourage
health care cost containment while preserving quality of care by
allowing health care insurers to enter into preferred provider
arrangements and by establishing standards for preferred provider
arrangements and the health benefit plans associated with those
arrangements.
§33-25F-2. Definitions.
As used in this article, the term:
(a) "Coinsurance" means the percentage of an allowed charge or
expense for health care services that an enrollee must pay.
(b) "Commissioner" means the commissioner of insurance.
(c) "Copayment" means a specific dollar amount, except as
otherwise provided by statute, that the enrollee must pay upon
receipt of covered health care services and which is set at an
amount consistent with allowing enrollee access to health care
services.
(d) "Deductible" means a specified amount of covered health
care services, expressed in dollars, that must be incurred by an
enrollee before the insurer will assume any financial liability for
all or part of covered health care services.
(e) "Emergency services" means those services as described in
section twenty-one, article one of this chapter that are included
in a preferred provider arrangement.
(f) "Enrollee" means an individual who has been voluntarily
enrolled in a preferred provider benefit plan, including
individuals on whose behalf a contractual arrangement has been
entered into with a PPO to receive health care services through a
preferred provider benefit plan.
(g) "Health care insurer" means an insurer as defined in
article one of this chapter, a fraternal benefit society as defined
in article twenty-three of this chapter, a hospital, medical,
dental or health service corporation as defined in article
twenty-four of this chapter, a health care corporation as defined
in article twenty-five of this chapter, a health maintenance
organization as defined in article twenty-five-a of this chapter,
a multiemployer welfare arrangement, or any other person authorized
to sell accident and sickness insurance policies, subscriber
certificates, or other contracts of accident and sickness insurance
by whatever name called under this chapter. "Health care insurer"
does not include an employer that provides a self-insured employee
benefit plan for the benefit of its employees and their dependents.
(h) "Health care services" means services rendered or products
sold by a health care provider within the scope of the provider's
license. The term includes, but is not limited to, hospital,
medical, surgical, dental, vision, chiropractic, mental health and
pharmaceutical services or products.
(i) "In-network covered services" means covered health care
services that are received according to the rules of the preferred
provider benefit plan from providers employed by, under contract with, or approved in advance by the health care insurer, and
includes emergency services regardless of the status or affiliation
of the provider of such services.
(j) "Out-of-network covered services" means nonemergency,
medically necessary covered health care services that are not
received from providers employed by, under contract with, or
approved in advance by the health care insurer.
(k) "Person" means an individual, company, insurer,
association, organization, society, reciprocal, partnership,
syndicate, business trust, corporation or any other legal entity.
(l) "Preferred provider" means a health care provider or group
of providers who have contracted to provide specified covered
health care services.
(m) "Preferred provider arrangement" means a contract between
a health care insurer, a third party administrator or any other
entity providing a network of providers and a preferred provider
which complies with all the requirements of this article.
(n) "Preferred provider benefit plan" as used in this article
means a health benefit plan offered by a health care insurer in
which covered services are available from contracting health care
providers who are paid on a negotiated or fee-for-service basis and enrollees are given incentives through differentials in
deductibles, coinsurance or copayments to obtain covered health
care services from the contracting providers. "Preferred provider
benefit plan" as used in this article does not include "excepted
benefits" as defined in section one-a, article sixteen of this
chapter.
(o) "Preferred provider organization" or "PPO" means an
organization of providers or an entity that provides a network of
providers who provide health care services, pursuant to the terms
of a preferred provider arrangement.
(p) "Provider" means any physician, hospital, or other person
or organization which is licensed or otherwise authorized to
provide health care services in this state.
(q) "Quality assurance" means an ongoing program designed to
objectively and systematically monitor and evaluate the quality and
appropriateness of the enrollee's care, pursue opportunities to
improve the enrollee's care and to resolve identified problems at
the prevailing professional standard of care.
(r) "Third party administrator" means, for purposes of this
article, a person who directly or indirectly underwrites, collects
charges or premiums from, or adjusts or settles claims on residents of this state, relating to accident and sickness coverage offered
or provided by a health care insurer in connection with a preferred
provider benefit plan, except an employer on behalf of its
employees.
(s) "Utilization management" means a system for the evaluation
of the necessity, appropriateness and efficiency of the use of
health care services, procedures and facilities.
§
33-25F-3. Preferred provider benefit plans.
(a) Notwithstanding any provision of law to the contrary,
health care insurers may issue preferred provider benefit plans
approved by the commissioner. Health care insurers may contract
directly or indirectly with licensed health care providers of all
kinds without regard to specialty of services or limitation to a
specific type of practice. A preferred provider benefit plan that
is not disapproved by the commissioner within sixty days of its
filing by the health care insurer shall be considered approved.
Health care insurers as defined in this article shall be subject to
and shall be required to comply with all other applicable
nonconflicting provisions of this chapter and rules promulgated
pursuant to this chapter.
(b) Preferred provider benefit plans shall give enrollees the option to choose in-network covered services or out-of-network
covered services each time those covered services are authorized,
obtained or rendered, and shall not require enrollees to obtain
approval of the health care insurer to exercise that option. An
enrollee of a preferred provider benefit plan may receive benefits
for covered health care services either through direct payments to
the provider or through reimbursement to the enrollee.
(c) Notwithstanding the provisions of subsection (d), section
four of this article, preferred provider benefit plans may not be
issued if the defined service area does not contain sufficient
numbers of preferred providers within appropriate geographical
areas to afford reasonable access to health care services by
enrollees of the preferred provider benefit plan.
§33-25F-4. Standards for approval of preferred provider benefit
plans.
(a) In addition to other requirements of this chapter
applicable to the health care insurer, prior to offering a
preferred provider benefit plan to any resident of this state the
health care insurer must first obtain a certificate from the
commissioner indicating that the plan meets the requirements of
this article. The commissioner may impose any costs on health care
insurers as considered necessary to carry out the provisions of this section. In order for the preferred provider benefit plan to
be approved, the plan shall:
(1) Establish the manner of payment to preferred providers;
(2) Include fair, reasonable, and equitable mechanisms for the
assignment and payment of benefits to nonpreferred providers;
(3) Include a methodology for determining the size and
adequacy of the provider network necessary to serve the enrollees;
(4) Have programs for quality assurance and utilization
management, and may include other mechanisms designed to minimize
the cost of the preferred provider benefit plan;
(5) Provide to enrollees eligible to receive health care
services under the plan a statement of benefits under the
arrangement and, at least annually, an updated listing of providers
who are preferred providers under the arrangement; and
(6) Allow the enrollee, the enrollee's health care provider,
or the enrollee's fiduciary representative, agent, parent or
guardian if the enrollee is a minor or is incompetent, to appeal to
the health care insurer any decision to deny coverage for health
care services recommended by a provider, pursuant to an established
procedure for resolving consumer complaints.
(b) Preferred provider benefit plans may not:
(1) Deny health benefits for medically necessary covered
services or have an adverse effect on the availability or the
quality of covered services;
(2) Deny reimbursement or pay less than the nonpreferred level
of covered benefit reimbursement for health care services provided
by a nonpreferred provider on the grounds that the enrollee was not
referred to a preferred provider by a person acting on behalf of or
under agreement with the health care insurer;
(3) Have differences in coinsurance percentages applicable to
benefit levels for services provided by preferred and nonpreferred
providers which differ by more than thirty percentage points;
(4) Have a coinsurance percentage applicable to benefit levels
for services provided by nonpreferred providers which exceeds forty
percent of the benefit levels under the policy for such services;
(5) Have a separate annual deductible per enrollee or per
family for out-of-network covered services which exceeds two times
the amount of the annual per enrollee or per family deductible
applied to in-network covered services, if the preferred provider
benefit plan imposes a deductible for in-network covered services;
(6) Have a separate annual deductible per enrollee which
exceeds two hundred fifty dollars or a separate per family deductible which exceeds seven hundred fifty dollars for
out-of-network covered services, if the preferred provider benefit
plan imposes no deductible for in-network covered services;
(7) Have annual and lifetime benefit maximums for
out-of-network covered services that are less than one half of the
annual and lifetime maximum limits for in-network covered services,
if the preferred provider benefit plan imposes annual and lifetime
benefit maximums for in-network covered services;
(8) Have a copayment requirement for an out-of-network covered
service that exceeds the copayment for an in-network covered
service by more than twenty dollars or one hundred percent,
whichever is greater, if the preferred provider benefit plan
includes copayments for both in-network and out-of-network covered
services;
(9) Have a separate annual limit on enrollee out-of-pocket
expenses for out-of-network covered services that exceeds two times
the annual limit on enrollee out-of-pocket expenses for in-network
covered services, if the preferred provider benefit plan imposes a
limit on annual out-of-pocket expenses for in-network covered
services;
(10) Have a separate annual limit on enrollee out-of-pocket expenses for out-of-network covered services that exceeds one
thousand five hundred dollars per enrollee or four thousand dollars
per family, if the preferred provider benefit plan does not impose
a limit on annual out-of-pocket expenses for in-network covered
services; and
(11) Have different medical management requirements, including
utilization review criteria, for out-of-network covered services
than are imposed on in-network covered services. Medical
management requirements shall not restrict enrollees' abilities to
seek covered services on an out-of-network basis.
(c) Copayments imposed by the preferred provider benefit plan
for any covered health care service are not required to be
considered in the determination of percentage differential
limitations set forth in subdivisions (3) and (4), subsection (b)
of this section. Copayments for any covered health care services
shall be reasonable in relation to the covered benefits to which
they apply, and shall not work to unfairly deny necessary health
care services.
(d) A preferred provider benefit plan may include reasonable
limits on the number or classes of preferred providers, provided
that there is no discrimination against providers on the basis of religion, race, color, national origin, age, sex, or marital
status.
(e) If a person enters into a preferred provider arrangement
providing covered health care services with a health care provider
or providers, but is not engaged in activities which would require
it to be licensed by the commissioner, such person shall file with
the commissioner information describing its activities and a
description of the contract or agreement it has entered into with
the health care providers. Employers who enter into contracts in
connection with health care providers for the exclusive benefit of
their employees and dependents are exempt from this requirement.
§33-25F-5. Preferred provider benefit plan policy provisions.
(a) Policies or certificates for preferred provider benefit
plans issued by health care insurers pursuant to this article shall
contain at least the following provisions:
(1) Provisions describing the health care services or other
benefits, if any, to which an enrollee is entitled under the
preferred provider benefit plan;
(2) A provision that if an enrollee receives emergency
services specified in the preferred provider benefit plan and
cannot reasonably reach a preferred provider, those emergency services rendered will be paid for in accordance with the terms of
the preferred provider benefit plan, at benefit levels at least
equal to those applicable to treatment by preferred providers for
emergency services in an amount based on the usual, customary, and
reasonable charges in the area where the treatment is provided;
(3) A provision which clearly identifies the differences in
benefit levels for health care services provided by preferred
providers and benefit levels for health care services provided by
nonpreferred providers;
(4) If the preferred provider benefit plan defines a specific
service area, the policy shall contain a provision that the health
care insurer may not terminate an enrollee's coverage because an
individual enrollee or group member moves out of the service area;
(5) Preferred provider benefit plan policies, outline of
coverage and/or preferred provider benefit plan certificates shall
contain a brief and prominent notice in boldface type reflecting
the limitations of the preferred provider benefit plan. The notice
shall be placed on the face page of the policy, outline of coverage
or certificate and refer to the differentials in coinsurance
percentages, copayments and deductibles applicable to preferred and
nonpreferred provider health care services, service area requirements, and provisions required by this article pertaining to
emergency services; and
(6) Preferred provider benefit plan policies or certificates
shall fully disclose the use of copayments in a specified dollar
amount which apply to any covered health care services.
(b) The following provisions may not be included in policies
or certificates for preferred provider benefit plans issued by
health care insurers pursuant to this article:
(1) Terms or conditions that would operate unreasonably to
restrict the accessibility and availability of health care services
for the insured; and
(2) Any provision that would prohibit reimbursement for
expenses of health care services rendered by a nonpreferred
provider.
§33-25F-6. Termination or cancellation of coverage.
(a) No preferred provider benefit plan policy and no health
care insurer in connection with a preferred provider benefit plan
may allow cancellation or fail to renew the coverage of an enrollee
in the plan except for:
(1) Failure to pay the premium for health care coverage;
(2) Termination of the preferred provider benefit plan; or
(3) If the enrollee is a member of a group plan, termination
of the group plan or the enrollee moving out of the group.
(b) No technique of rating or grouping to cancel or fail to
renew coverage of an enrollee may be used in connection with a
preferred provider benefit plan.
(c) An enrollee must 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 must be given the opportunity to
enroll in the preferred provider benefit plan on an individual
basis. An enrollee may not be disenrolled 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 disenrolled in violation of this section shall be
reenrolled.
(d) An individual enrollee may cancel his or her coverage in
a preferred provider benefit plan at any time for any reason:
Provided, That the preferred provider benefit plan policy may
require that the enrollee give thirty days' advance notice:
Provided, however, That an individual enrollee whose premium rate
was determined pursuant to a group contract must cancel his or her
coverage in a preferred provider benefit plan pursuant to the terms
of that contract.
§33-25F-7. Third party reimbursement for mammography and pap
smear testing.
Notwithstanding any provision of any policy, provision,
contract, plan or agreement to which this article applies, whenever
reimbursement or indemnity for laboratory or X ray services are
covered, reimbursement or indemnification shall not be denied for
mammograms or pap smears when performed for cancer screening or
diagnostic purposes, at the direction of a person licensed to
practice medicine and surgery by the board of medicine: (1) A
baseline mammogram for women age thirty-five to thirty-nine
inclusive; (2) a mammogram for women age forty to forty-nine
inclusive, every two years or more frequently based on the woman's
physician's recommendation; (3) a mammogram every year for women
age fifty and over; (4) a pap smear annually or more frequently
based on the woman's physician's recommendation for women age
eighteen or over. A preferred provider benefit plan may apply to
mammograms or pap smears, the same deductibles, coinsurance and other limitations as apply to other covered services.
§33-25F-8. Third party reimbursement for rehabilitation services.
(a) Notwithstanding any provision of any policy, provision,
contract, plan or agreement to which this article applies, all
preferred provider benefit plans shall provide as benefits to all
enrollees coverage for rehabilitation services as hereinafter set
forth, unless rejected by the enrollee.
(b) For purposes of this article and section, "rehabilitation
services" includes those services which are designed to remediate
the patient's condition or restore patients to their optimal
physical, medical, psychological, social, emotional, vocational and
economic status. Rehabilitation services include by illustration
and not limitation diagnostic testing, assessment, monitoring or
treatment of the following conditions individually or in a
combination:
(1) Stroke;
(2) Spinal cord injury;
(3) Congenital deformity;
(4) Amputation;
(5) Major multiple trauma;
(6) Fracture of femur;
(7) Brain injury;
(8) Polyarthritis, including rheumatoid arthritis;
(9) Neurological disorders, including, but not limited to,
multiple sclerosis, motor neuron diseases, polyneuropathy, muscular
dystrophy and Parkinson's disease;
(10) Cardiac disorders, including, but not limited to, acute
myocardial infarction, angina pectoris, coronary arterial
insufficiency, angioplasty, heart transplantation, chronic
arrhythmias, congestive heart failure, valvular heart disease; and
(11) Burns.
(c) Rehabilitation services includes care rendered by any of
the following:
(1) A hospital duly licensed by the state of West Virginia
that meets the requirements for rehabilitation hospitals as
described in Section 2803.2 of the Medicare Provider Reimbursement
Manual, Part 1, as published by the U.S. Centers for Medicare and
Medicaid Services;
(2) A distinct part rehabilitation unit in a hospital duly
licensed by the state of West Virginia. The distinct part unit
must meet the requirements of Section 2803.61 of the Medicare
Provider Reimbursement Manual, Part 1, as published by the U.S. Centers for Medicare and Medicaid Services; and
(3) A hospital duly licensed by the state of West Virginia
which meets the requirements for cardiac rehabilitation as
described in Section 35-25, Transmittal 41, dated August, 1989, as
promulgated by the U.S. Health Care Financing Administration (now
U.S. Centers for Medicare and Medicaid Services.)
(d) Rehabilitation services do not include services for mental
health, chemical dependency, vocational rehabilitation, long-term
maintenance or custodial services.
(e) A preferred provider benefit plan may apply to
rehabilitation services the same deductibles, coinsurance,
copayments, medical management requirements and other limitations
as apply to other covered services.
§33-25F-9. Third party payment for child immunization services.
Notwithstanding any provision of any policy, provision,
contract, plan or agreement to which this article applies, all
preferred provider benefit plans shall provide as benefits to all
enrollees coverage for child immunization services as described in
section five, article three, chapter sixteen of this code. This
coverage will cover all costs associated with immunization,
including the cost of the vaccine, if incurred by the health care provider, and all costs of vaccine administration. These services
shall be exempt from any deductible, coinsurance and/or copayment
provisions which may be in force in these policies, provisions,
plans, agreements or contracts. This section does not require that
other health care services provided at the time of immunization be
exempt from any deductible, coinsurance and/or copayment
provisions.
§33-25F-10. Coverage of emergency services.
(a) Notwithstanding any provision of any policy, provision,
contract, plan or agreement to which this article applies, all
preferred provider benefit plans shall provide as benefits to all
enrollees coverage for emergency services. A preferred provider
benefit plan may apply to emergency services the same deductibles,
copayments, coinsurance and other limitations as apply to other
covered services.
(b) Every preferred provider benefit plan shall provide
coverage for emergency medical services, including prehospital
services, to the extent necessary to screen and to stabilize an
emergency medical condition. Services will be considered emergency
services if a prudent layperson acting reasonably would have
believed that an emergency medical condition existed.
(c) As used in this section:
(1)"Emergency medical services" means those services required
to screen for or treat an emergency medical condition until the
condition is stabilized, including prehospital care;
(2) "Prudent layperson" means a person who is without medical
training and who draws on his or her practical experience when
making a decision regarding whether an emergency medical condition
exists for which emergency treatment should be sought;
(3) "Emergency medical condition for the prudent layperson"
means one that manifests itself by acute symptoms of sufficient
severity, including severe pain, such that the person could
reasonably expect the absence of immediate medical attention to
result in serious jeopardy to the individual's health, or, with
respect to a pregnant woman, the health of the unborn child;
serious impairment to bodily functions; or serious dysfunction of
any bodily organ or part;
(4) "Stabilize" means with respect to an emergency medical
condition, to provide medical treatment of the condition necessary
to assure, with reasonable medical probability that no medical
deterioration of the condition is likely to result from or occur
during the transfer of the individual from a facility: Provided, That this provision may not be construed to prohibit, limit or
otherwise delay the transportation required for a higher level of
care than that possible at the treating facility;
(5) "Medical screening examination" means an appropriate
examination within the capability of the hospital's emergency
department, including ancillary services routinely available to the
emergency department, to determine whether or not an emergency
medical condition exists; and
(6) "Emergency medical condition" means a condition that
manifests itself by acute symptoms of sufficient severity including
severe pain such that the absence of immediate medical attention
could reasonably be expected to result in serious jeopardy to the
individual's health or with respect to a pregnant woman the health
of the unborn child, serious impairment to bodily functions or
serious dysfunction of any bodily part or organ.
§33-25F-11. Third party reimbursement for colorectal cancer
examination and laboratory testing.
(a) Notwithstanding any provision of any policy, contract,
plan or agreement applicable to this article, reimbursement or
indemnification for colorectal cancer examinations and laboratory
testing may not be denied for any nonsymptomatic person fifty years
of age or older, or a symptomatic person under fifty years of age, when reimbursement or indemnity for laboratory or X ray services
are covered under the preferred provider benefit plan and are
performed for colorectal cancer screening or diagnostic purposes at
the direction of a person licensed to practice medicine and surgery
by the board of medicine. The tests are as follows: An annual
fecal occult blood test, a flexible sigmoidoscopy repeated every
five years, a colonoscopy repeated every ten years and a double
contrast barium enema repeated every five years.
(b) A symptomatic person is defined as:
(i) An individual who experiences a change in bowel habits,
rectal bleeding or stomach cramps that are persistent; or
(ii) An individual who poses a higher than average risk for
colorectal cancer because he or she has had colorectal cancer or
polyps, inflammatory bowel disease, or an immediate family history
of such conditions.
The same deductibles, coinsurance, network restrictions and
other limitations for covered services found in the preferred
provider benefit plan of the enrollee may apply to colorectal
cancer examinations and laboratory testing.
§33-25F-12. Required coverage for reconstruction surgery
following mastectomies.
(a) Any preferred provider benefit plan which provides medical and surgical benefits with respect to a mastectomy shall provide,
in a case of an enrollee who is receiving benefits in connection
with a mastectomy and who elects breast reconstruction in
connection with such mastectomy, coverage for:
(1) All stages of reconstruction of the breast on which the
mastectomy has been performed;
(2) Surgery and reconstruction of the other breast to produce
a symmetrical appearance; and
(3) Prostheses and physical complications of mastectomy,
including lymphedemas in a manner determined in consultation with
the attending physician and the patient. Coverage shall be provided
for a minimum stay in the hospital of not less than forty-eight
hours for a patient following a radical or modified mastectomy and
not less than twenty-four hours of inpatient care following a total
mastectomy or partial mastectomy with lymph node dissection for the
treatment of breast cancer. Nothing in this section may be
construed as requiring inpatient coverage where inpatient coverage
is not medically necessary or where the attending physician in
consultation with the patient determines that a shorter period of
hospital stay is appropriate. This coverage may be subject to
annual deductibles and coinsurance provisions as may be deemed appropriate and as are consistent with those established for other
benefits under the preferred provider benefit plan. Written notice
of the availability of such coverage shall be delivered to the
enrollee upon enrollment and annually thereafter.
(b) A preferred provider benefit plan policy and a health care
insurer providing coverage for health care services in connection
with a preferred provider benefit plan shall provide notice to each
enrollee under the plan regarding the coverage required by this
section. The notice shall be in writing and prominently positioned
in any literature or correspondence made available or distributed
by the issuer of the preferred provider benefit plan.
(c) A preferred provider benefit plan policy and a health care
insurer offering coverage for health care services in connection
with a health benefit plan policy may not:
(1) Deny to a patient eligibility, or continued eligibility,
to enroll or to renew coverage under the terms of the plan, solely
for the purpose of avoiding the requirements of this section; and
(2) Penalize or otherwise reduce or limit the reimbursement of
an attending provider, or provide incentives (monetary or
otherwise) to an attending provider, to induce such provider to
provide care to an individual participant or beneficiary in a manner inconsistent with this section.
(d) Nothing in this section shall be construed to prevent a
health care insurer offering coverage for health care services in
connection with a preferred provider benefit plan from negotiating
the level and type of reimbursement with a provider for care
provided in accordance with this section.
§33-25F-13. Mental health.
(a) (1) Notwithstanding the requirements of subsection (b) of
this section, any preferred provider health benefit plan described
in this article that is delivered, issued or renewed in this state
shall provide benefits to all individual subscribers and members
and to all group members for expenses arising from treatment of
serious mental illness. The expenses do not include custodial
care, residential care or schooling. For purposes of this section,
"serious mental illness" means an illness included in the American
psychiatric association's diagnostic and statistical manual of
mental disorders, as periodically revised, under the diagnostic
categories or subclassifications of: (i) Schizophrenia and other
psychotic disorders; (ii) bipolar disorders; (iii) depressive
disorders; (iv) substance-related disorders with the exception of
caffeine-related disorders and nicotine-related disorders; (v) anxiety disorders; and (vi) anorexia and bulimia.
(2) Notwithstanding any other provision in this section to the
contrary, in the event that a health care insurer can demonstrate
actuarially to the insurance commissioner that its total
anticipated costs for treatment for mental illness, for any plan
will exceed or have exceeded two percent of the total costs for
such plan in any experience period, then the health care insurer
may apply whatever cost containment measurers may be necessary,
including, but not limited to, limitations on inpatient and
outpatient benefits, to maintain costs below two percent of the
total costs for the plan: Provided, however, That for any group
with twenty-five members or less, the health care insurer may apply
such additional cost containment measures as may be necessary if
the total anticipated actual costs for the treatment of mental
illness will exceed one percent of the total costs for the group.
(3) The health care insurer shall not discriminate between
medical-surgical benefits and mental health benefits in the
administration of its plan. With regard to both medical-surgical
and mental health benefits, it may make determinations of medical
necessity and appropriateness, and it may use recognized health
care quality and cost management tools, including, but not limited to, utilization review, use of provider networks, implementation of
cost containment measures, preauthorization for certain treatments,
setting coverage levels including the number of visits in a given
time period, using capitated benefit arrangements, using
fee-for-service arrangements, using third-party administrators, and
using patient cost sharing in the form of copayments, deductibles
and coinsurance.
(4) The provisions of this subsection shall apply with respect
to group health plans for plan years beginning on or after the
first day of January, two thousand three. The provisions of this
section shall cease to be effective on and after the thirty-first
day of March, two thousand seven, unless further extended by the
Legislature.
(5) The commissioner on or before the thirty-first day of
December, two thousand five, and annually thereafter, shall report
to the Legislature's joint committee on government and finance and
the committees on insurance of the respective houses of the
Legislature regarding the fiscal impact of this subsection on the
expenses of insurers affected thereby, and which insurers expenses
of providing mental health benefits have exceeded the percentage
limits established by this subsection.
(b) With respect to mental health benefits furnished to an
enrollee of a preferred provider benefit plan offered in connection
with a group health plan, for a plan year beginning on or after the
effective date of this article, the following requirements shall
apply to aggregate lifetime limits and annual limits.
(1) Aggregate lifetime limits:
(A) If the preferred provider benefit plan does not include an
aggregate lifetime limit on substantially all medical and surgical
benefits, as defined under the terms of the plan, but not including
mental health benefits, the plan may not impose any aggregate
lifetime limit on mental health benefits;
(B) If the preferred provider benefit plan limits the total
amount that may be paid with respect to an individual or other
coverage unit for substantially all medical and surgical benefits
(in this paragraph, "applicable lifetime limit,)" the plan shall
either apply the applicable lifetime limit to medical and surgical
benefits to which it would otherwise apply and to mental health
benefits, as defined under the terms of the plan, and not
distinguish in the application of the limit between medical and
surgical benefits and mental health benefits, or not include any
aggregate lifetime limit on mental health benefits that is less than the applicable lifetime limit;
(C) If a preferred provider benefit plan not previously
described in this subdivision includes no or different aggregate
lifetime limits on different categories of medical and surgical
benefits, the commissioner shall propose rules for legislative
approval in accordance with the provisions of article three,
chapter twenty-nine-a of this code under which paragraph (B) of
this subdivision shall apply, substituting an average aggregate
lifetime limit for the applicable lifetime limit.
(2) Annual limits:
(A) If a preferred provider benefit plan does not include an
annual limit on substantially all medical and surgical benefits, as
defined under the terms of the plan but not including mental health
benefits, the plan may not impose any annual limit on mental health
benefits, as defined under the terms of the plan;
(B) If the preferred provider benefit plan limits the total
amount that may be paid in a twelve-month period with respect to an
individual or other coverage unit for substantially all medical and
surgical benefits (in this paragraph, "applicable annual limit,)"
the plan shall either apply the applicable annual limit to medical
and surgical benefits to which it would otherwise apply and to mental health benefits, as defined under the terms of the plan, and
not distinguish in the application of the limit between medical and
surgical benefits and mental health benefits, or not include any
annual limit on mental health benefits that is less than the
applicable annual limit;
(C) If a preferred provider benefit plan not previously
described in this subdivision includes no or different annual
limits on different categories of medical and surgical benefits,
the commissioner shall propose rules for legislative approval in
accordance with the provisions of article three, chapter
twenty-nine-a of this code under which paragraph (B) of this
subdivision shall apply, substituting an average annual limit for
the applicable annual limit.
(3) If a group health plan or a health insurer offers a
participant or beneficiary two or more benefit package options,
this subsection shall apply separately with respect to coverage
under each option.
§33-25F-14. Preferred provider contracts.
(a) All provider contracts for the provision of health care
services on a preferred or in-network basis shall be in writing
shall include the following:
(1) Provisions addressing the provider's continuing
obligations after termination of the provider contract or in the
case of insolvency of the health care insurer, including, but not
limited to, transition of administrative duties and enrollee
records, and continuation of care when inpatient care is on-going;
(2) Provisions addressing the provider's obligation to
maintain licensure, accreditation and credentials, and to provide
notification of subsequent changes in status of any information
relating to the provider's professional credentials;
(3) Provisions addressing the provider's obligation to
maintain professional liability insurance coverage and the required
amount of such coverage, and to provide timely notification of any
subsequent changes in status of professional liability insurance;
(4) A provision that an enrollee shall be held harmless for
provider utilization review decisions over which he or she has no
control. In the absence of this hold harmless provision, the
contract shall be deemed to include the provision;
(5) Provisions addressing the provider's responsibility to
collect applicable enrollee deductibles, copayments, coinsurance,
and fees for noncovered health care services;
(6) Provisions addressing the health care insurer's obligation to provide a mechanism that allows providers to verify enrollee
eligibility before rendering health care services. Mutually
agreeable provisions may be included to address situations in which
incorrect or retroactive information has been submitted by employer
groups;
(7) Provisions addressing the provider's obligations regarding
enrollee records. The provider shall:
(i) Maintain confidentiality of enrollee medical records and
personal information as required by law; and
(ii) Maintain adequate medical and other health records
according to industry standards and make copies of such records
available to the health care insurer and the commissioner in
connection with his or her regulatory duties;
(8) A provision that the provider may not discriminate against
enrollees on the basis of race, color, national origin, sex,
handicap, age, religion, marital status, or health status;
(9) Provisions addressing the provider's obligations to comply
with the health care insurer's utilization management programs,
credential verification programs and quality management programs;
(10) The provider's authorization and the health care
insurer's obligation to include the name of the provider or the provider group in the provider directory distributed to its
enrollees;
(11) Provisions addressing assignability of the contract,
which shall include:
(i) That the provider's duties and obligations under the
contract shall not be assigned, delegated or transferred without
the prior written consent of the health care insurer; and
(ii) That the health care insurer shall notify the provider,
in writing, of any duties or obligations that are to be delegated
or transferred by the health care insurer, before the delegation or
transfer; and
(12) Provisions addressing cancellation of the contract, which
shall state:
(i) That the provider must notify the health care insurer and
the commissioner in writing that the provider intends to cancel the
contract at least sixty days in advance of the planned cancellation
date; and
(ii) That nonpayment for goods or health care services
rendered by the provider is not a valid reason for avoiding the
sixty-day advance notice of cancellation.
(b) Forms of preferred provider contracts, and any material changes thereto, must be filed with the commissioner prior to use.
The commissioner has the power to require immediate cancellation or
the immediate renegotiation of the contract by the parties whenever
he or she determines that the contracts 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-15. Contracts with third party administrators.
(a) If a health care insurer contracts with a third-party
administrator for the provision of a PPO, the contract between the
health care insurer and the third party administrator shall include
the following provisions:
(1) That all contracts between the third-party administrator
and providers comply with this section and other applicable
provisions of this article and this chapter;
(2) That the third-party administrator shall comply with all
applicable statutory and regulatory requirements that apply to the
functions delegated by the health care insurer and assumed by the
third party administrator;
(3) That the health care insurer retains responsibility to monitor the offering of services to its enrollees and financial
responsibility to its enrollees;
(4) That the third-party administrator may not subcontract for
its services without the health care insurer's written permission;
(5) That the health care insurer may approve or disapprove the
participation of providers contracting with the third-party
administrator for inclusion in or removal from the preferred
provider benefit plan.
(b) If the third-party administrator assumes risk from the
health care insurer or is responsible for claims payment to its
providers:
(1) The health care insurer shall receive documentation of
utilization and claims payment from the third-party administrator
and must maintain accounting systems and records necessary to
support the relationship with the third party administrator; and
(2) The commissioner shall have access to the third-party
administrator's books, records and financial information to examine
activities performed by the third party administrator on behalf of
the health care insurer.
(c) If a health care insurer enters into a contract with a
third-party administrator for the provision of a PPO under which the third-party administrator assumes risk from the health care
insurer, is responsible for claims payment to its providers, or is
paid directly by the health care insurer for the health care
services provided, the health care insurer shall arrange for the
financial protection of itself and its enrollees through such
approaches as financial reporting requirements or other monitoring
of the financial condition of the third party administrator to
ensure that providers are paid for services, or maintain agreements
with providers that enrollees will be held harmless in the event of
nonpayment for services by the third party administrator.
(d) If a third-party administrator provides a preferred
provider benefit plan to an employer in connection with an insured
employee benefit plan, the third-party administrator must insure
that the plan and provider contracts comply with the provisions of
this article.
§33-25F-16. Rates and forms.
(a) 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 actuary to the appropriateness of the basic rates and
that they are neither inadequate nor excessive nor unfairly discriminatory based on reasonable assumptions as to expected
medical expenses, administrative expenses, and margins for
contingencies, shall accompany the filing along with supporting
information.
(b) The actuary certification required by subsection (a) of
this section shall also provide an adequate description of the
rating methodology showing that the methodology follows consistent
and equitable actuarial principles.
(c) Any health care insurer issuing a preferred provider
benefit plan must file every rating manual, rating rule, rating
plan or modification of the foregoing for approval by the
commissioner. The commissioner shall within sixty days of filing
approve or disapprove every rate filing made. If the commissioner
disapproves a rate filing, he or she shall notify the health care
insurer in writing of the disapproval, specifying in the notice in
what respects the rate filing fails to meet the requirements of
this article.
(d) Any health care insurer issuing a preferred provider
benefit plan must file all forms for approval by the commissioner.
The commissioner shall within sixty days of filing approve or
disapprove every preferred provider benefit plan policy or contract, certificate, rider, endorsement and application to be
issued, delivered or issued for delivery in this state in
connection with a preferred provider benefit plan or PPO. All
forms filed with the commissioner pursuant to this section shall be
considered approved after the expiration of sixty days from the
date of filing unless the commissioner has disapproved the same.
(e) The commissioner may require the submission of any other
relevant information and documentation which he or she considers
relevant and necessary in determining whether to approve or
disapprove a filing made pursuant to this section.
§33-25F-17. Disclosure and advertising materials.
(a) The health care insurer shall provide each enrollee with
a current preferred provider roster or directory of health care
providers under contract to provide services at alternative rates
under the preferred provider benefit plan. The roster shall be
updated and distributed at least annually, but may be updated and
distributed more frequently at the insurer's option.
(b) Each preferred provider roster or directory shall contain
toll-free telephone numbers so that enrollees or groups of
enrollees may confirm current preferred provider status
information.
(c) All advertising material used in the solicitation and sale
of preferred provider benefit plans shall comply with the
requirements of section four, article eleven of this chapter
entitled "Unfair Trade Practices," and rules promulgated by the
commissioner pertaining to advertisement of accident and sickness
insurance.
(d) Publications or advertisements of preferred provider
benefit plans may not refer to the quality or efficiency of the
services of nonparticipating providers.
§33-25F-18. Compliance with article.
Any health care insurer offering or administering a preferred
provider benefit plan or PPO prior to the effective date of this
article shall file all applicable rates and forms required by this
article within ninety days of the effective date of this article,
and may continue to operate until such time as its application is
denied.
§33-25F-19. Commissioner's authority.
In addition to any other powers or authority specified in this
article or chapter that are applicable to the health care insurer,
the commissioner may:
(a) When the commissioner has cause to believe that a violation of this article has occurred, he or she shall notify the
health care insurer in writing specifically stating the alleged
violation and fixing a time thereafter for a hearing on the matter.
After the hearing, or upon the failure of the health care insurer
to appear at the hearing, the commissioner shall take action as he
or she considers advisable on written findings of fact and
conclusions of law. The commissioner shall deliver copies of all
orders to the health care insurer by certified mail, return receipt
requested. The action of the commissioner shall be subject to
review by the circuit court. For determined violations of this
article, the commissioner may order suspension or revocation of the
license or certificate of authority of the health care insurer, or
in lieu of license suspension or revocation, the commissioner may
levy an administrative penalty. All actions of the commissioner
pursuant to this subsection shall be consistent with other law set
forth in this chapter that is applicable to the health care
insurer, including, but not limited to, hearing notice provisions
and other procedural matters and applicable penalty amounts.
(b) The commissioner may convene a hearing on any written
complaint against a health care insurer by an enrollee or a
provider of health care services for any alleged violation of this article. Written notice of the hearing shall be provided by the
commissioner to the health care insurer and enrollee or provider at
least fifteen days prior to the scheduled hearing. After the
hearing the commissioner shall take such action as he or she
considers advisable on written findings of fact and conclusions of
law, which may include revocation or suspension of the license or
certificate of authority of the health care insurer or the
assessment of an administrative penalty. The commissioner shall
deliver copies of all orders to the parties by certified mail,
return receipt requested. The action of the commissioner shall be
subject to review by the circuit court.
(c) In addition to the other remedies provided in this
article, the commissioner may issue an order requiring any health
care insurer found to have violated any provision of this article
or any rules promulgated hereunder, after notice and hearing as set
forth herein, to cease and desist from such violation or
violations.
(d) The commissioner is authorized to promulgate such rules as
he or she considers necessary or appropriate to the administration
and enforcement of this article.
NOTE: The purpose of this bill is to provide standards for
certifying and regulating preferred provider benefit plans and
thereby protect consumers who choose to obtain health care coverage
from a preferred provider organization or through a preferred
provider arrangement. The purpose of the bill is further to
promote consumer options for health care coverage in this state.
This article is new; therefore, strike-through and
underscoring has been omitted.
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