Senate Bill No. 458
(By Senators Minard and Kessler)
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[Introduced January 31, 2002; referred to the Committee
on Banking and Insurance; and then to the Committee on the
Judiciary.]
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A BILL to amend and reenact section twenty-three, article
twenty-five-a, chapter thirty-three of the code of West
Virginia, one thousand nine hundred thirty-one, as amended,
relating to empowering the commissioner to impose a civil
penalty for violators of health maintenance organization
contracts as defined in section seven-a of said article.
Be it enacted by the Legislature of West Virginia:
That section twenty-three, 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 to
read as follows:
ARTICLE 25A. HEALTH MAINTENANCE ORGANIZATION ACT.
§33-25A-23. Penalties and enforcement.
(1) The commissioner may, in lieu of suspension or revocation of a certificate of authority under section nineteen of this
article, levy an administrative penalty in an amount not less than
one hundred dollars nor more than five thousand dollars, if
reasonable notice in writing is given of the intent to levy the
penalty and the health maintenance organization has a reasonable
time within which to remedy the defect in its operations which gave
rise to the penalty citation. The commissioner may augment this
penalty by an amount equal to the sum that he calculates to be the
damages suffered by enrollees or other members of the public.
(2) Any
person who violates any provision of this article
shall be guilty of a misdemeanor, and, upon conviction thereof,
shall be fined not less than one thousand dollars nor more than ten
thousand dollars, or imprisoned in the county jail not more than
one year, or both fined and imprisoned provider in violation of
section seven-a of this article may be subject to a civil money
penalty to be imposed by the commissioner. Upon a determination
that there is probable cause to believe that any provider has
violated section seven-a of this article, the commissioner may
provide written notice to the alleged violator stating the nature
of the alleged violation and the time and place at which the
alleged violator shall appear to show good cause why a civil
penalty should not be imposed. If, after notice and hearing, the
commissioner determines that a violation of section seven-a of this
article has occurred, the commissioner may assess a civil penalty of not less than the amount charged the subscriber but not more
than one thousand dollars. Subsequent violations of section
seven-a of this article shall result in fines of not less than two
thousand dollars. Any provider so assessed shall be notified of
the assessment in writing and the notice shall specify the reasons
for the assessment. Any provider may waive the right to a hearing
and receive a reduction in penalties of twenty-five percent.
(3)(a) If the commissioner shall for any reason have cause to
believe that any violation of this article or regulations
promulgated pursuant thereto has occurred or is threatened, prior
to the levy of a penalty or suspension or revocation of a
certificate of authority, the commissioner shall give notice to the
health maintenance organization and to the representatives, or
other persons who appear to be involved in such suspected
violation, to arrange a conference with the alleged violators or
their authorized representatives for the purpose of attempting to
ascertain the facts relating to such suspected violation, and, in
the event it appears that any violation has occurred or is
threatened, to arrive at an adequate and effective means of
correcting or preventing such violation.
(b) Proceedings under this subsection shall not be governed by
any formal procedural requirements, and may be conducted in such
manner as the commissioner may deem appropriate under the
circumstances. Enrollees shall be afforded notice by publication of proceedings under this subsection (3) and shall be afforded the
opportunity to intervene.
(4)(a) The commissioner may issue an order directing a health
maintenance organization or a representative of a health
maintenance organization to cease and desist from engaging in any
act or practice in violation of the provisions of this article or
regulations promulgated pursuant thereto.
(b) Within ten days after service of the order of cease and
desist, the respondent may request a hearing on the question of
whether acts or practices in violation of this article have
occurred. Such hearings shall be conducted pursuant to chapter
twenty-nine-a of this code, and judicial review shall be available
as provided by chapter twenty-nine-a of this code.
(5) In the case of any violation of the provisions of this
article or regulations promulgated pursuant thereto, if the
commissioner elects not to issue a cease and desist order, or in
the event of noncompliance with a cease and desist order issued
pursuant to subsection (4) of this section, the commissioner may
institute a proceeding to obtain injunctive relief, or seek other
appropriate relief, in the circuit court of the county of the
principal place of business of the health maintenance organization.
(6) Any enrollee of or resident of the service area of the
health maintenance organization may bring an action to enforce any
provision, standard or regulation enforceable by the commissioner. In the case of any successful action to enforce this article, or
accompanying standards or regulations, the individual shall be
awarded the costs of the action together with a reasonable
attorney's fee as determined by the court.
NOTE: The purpose of this bill is to authorize the
commissioner to impose a money penalty against an HMO for failing
to pay fees for services rendered to a subscriber which the HMO
owes under contract with a provider.
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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