ENGROSSED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 336
(By Senators Tomblin, Mr. President, and Boley,
By Request of the Executive)
____________
[Originating in the Committee on Health and Human Resources;
reported February 29, 1996.]
____________
A BILL to amend and reenact sections two, three, three-a, four,
seven, seven-a, eight, nine, ten, eleven, fourteen, fifteen,
seventeen, eighteen, twenty-two and twenty-four, 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 seventeen-a and thirty-four,
all relating to health maintenance organizations;
definitions; application for certificate of authority;
conditions precedent to issuance or maintenance of a
certificate of authority; renewal of certificate of
authority; issuance of certificate of authority; fidelity
bond; provider contracts; evidence of coverage; annual report; information to enrollees; open enrollment period;
prohibited practices; regulation of marketing; examinations;
quality assurance; suspension or revocation of certificate
of authority; fees; statutory construction; relationship to
other laws; and authorizing the commissioner to promulgate
legislative rules regarding reimbursement for nonemergency
transportation by nonparticipating providers and dispatching
systems.
Be it enacted by the Legislature of West Virginia:
That sections two, three, three-a, four, seven, seven-a,
eight, nine, ten, eleven, fourteen, fifteen, seventeen, eighteen,
twenty-two and twenty-four, 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; and
that said article be further amended by adding thereto two new
sections, designated sections seventeen-a and thirty-four, 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, chiropractic, 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 and which is set at
an amount consistent with allowing subscriber access to health
care services.
(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" or "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 the care or hospitalization, osteopathic services,
chiropractic services, podiatric services, home health, health
education, or 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) Receives premiums for the provision of basic health care
services to enrollees on a prepaid per capita or prepaid
aggregate fixed sum basis, excluding copayments;
(b) Provides physicians' services primarily: (i) Directly
through physicians who are either employees or partners of the
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 paragraphs (i) and (ii) of this
subdivision;
(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 an organized delivery system, in
which a primary care 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:
Provided, That when dental care is provided by the health
maintenance organization the dentist selected by the subscriber
from the list provided by the health maintenance organization
shall coordinate the covered dental care of the subscriber, as
approved by the primary care physician or the health maintenance
organization.
(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 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 the 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 that 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
professional corporation, partnership, association or other
organization 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: (a) A majority of the members of which
are licensed to practice medicine or osteopathy; (b) who as their
principal professional activity engage in the coordinated
practice of their profession; (c) who 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 (d) who 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) "Primary care physician" means the general
practitioner, family practitioner, obstetrician/gynecologist,
pediatrician or specialist in general internal medicine who is
chosen or designated for each subscriber who will be responsible
for coordinating the health care of the subscriber, including
necessary referrals to other providers: Provided, That a
certified nurse-midwife may be chosen or designated in lieu of as
a subscriber's primary care physician during the subscriber's
pregnancy and for a period extending through the end of the month
in which the sixty-day period following termination of pregnancy
ends: Provided, however, That nothing in this subsection shall
expand the scope of practice for certified nurse-midwives as
defined in article fifteen, chapter thirty of this code.
(18) "Provider" means any physician, hospital or other
person or organization which is licensed or otherwise authorized
in this state to furnish health care services.
(19) "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.
(20) "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.
(21) "Statutory surplus" means the minimum amount of
unencumbered surplus which a corporation must maintain pursuant
to the requirements of this article.
(22) "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.
(23) "Surplus notes" means debt which has been subordinated
to all claims of subscribers and general creditors of the
organization.
(24) "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.
(25) "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.
(26) "Utilization management" means a system for the
evaluation of the necessity, appropriateness and efficiency of
the use of health care services, procedures and facilities.
§33-25A-3. 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 as a
health maintenance organization. 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 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 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 as a health maintenance organization. under this
article. The commissioner shall promulgate rules to facilitate
the enforcement of this subsection: Provided, That any provider
who is assuming risk by virtue of a contract or other arrangement with an HMO a health maintenance organization or entity which has
a certificate, may not be required to file for a certificate:
Provided, however, That the commissioner may require such the
exempted entities to file complete financial data for a
determination as to their solvency. Any organization directed to
apply for a certificate of authority is 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;
(c) A list of 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 the
officer or member of the governing body or any provider or any
organization or corporation owned or controlled by that person
and the health maintenance organization and the extent and nature
of any contract or financial arrangements between that person and
the health maintenance organization;
(d) A 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 the applicant, if
not domiciled in this state, appointing the commissioner and his
or her successors in office, and duly authorized deputies, as the
true and lawful attorney of the 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;
(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
subsection and all officers, directors and persons holding five
percent 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: Provided, That
the certification shall include an adequate description of the
rating methodology showing that the methodology follows
consistent and equitable actuarial principles; the health
maintenance organization is actuarially sound: Provided,
however, That the 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; and
(n) A description of the health maintenance organization's
quality assurance program; and
(n) (o) Such other information as the commissioner may
require to be provided.
(5) A health maintenance organization shall, unless
otherwise provided for by rules 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 rule. If the commissioner does not disapprove of
the filing within ninety days of filing, it shall be considered
approved and may be implemented by the health maintenance
organization.
§33-25A-3a. Conditions precedent to issuance or maintenance of
a certificate of authority; renewal of 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; and
(b) A waiver of any right to file or be subject to a
bankruptcy proceeding;
(c) Within thirty days of any change in the membership of
the governing body of the organization or in the officers or
persons holding five percent or more of the common stock of the
organization, or as otherwise required by the commissioner:
(i) An amended list of the names, addresses and official
positions of each member of the governing body, and a full
disclosure of any financial interest by a member of the governing
body or any provider or any organization or corporation owned or
controlled by that person and the health maintenance organization
and the extent and nature of any contract or financial
arrangements between that person and the health maintenance
organization; and
(ii) A complete biographical statement on forms prescribed
by the commissioner and an independent investigation report on
each person for whom a biographical statement and independent
investigation report have not previously been submitted; and
(d) Effective the first day of May, one thousand nine
hundred ninety-eight, for health maintenance organizations that
have been in existence at least two years, a copy of the current
quality assurance report submitted to the health maintenance
organization by a nationally recognized accreditation and review
organization approved by the commissioner, or in the case of the
issuance of an initial certificate of authority to a health
maintenance organization, a determination by the commissioner as
to the feasibility of the health maintenance organization's
proposed quality assurance program: Provided, That if a health maintenance organization files proof found in the commissioners
discretion to be sufficient to demonstrate that the health
maintenance organization has timely applied for and reasonably
pursued a review of its quality assurance program, but a quality
report has not been issued by the accreditation and review
organization, the health maintenance organization shall be deemed
to have complied with this subdivision.
(2) After the effective date of this section, as a condition
precedent to the issuance of a certificate of authority, any
organization that has not yet obtained a certificate of authority
to operate a health maintenance organization in this state shall
be incorporated under the provisions of article one, chapter
thirty-one of this code.
(3) After the effective date of this subsection, all
certificates of authority issued to health maintenance
organizations shall expire at midnight on the thirty-first day of
May of each year. The commissioner shall renew annually the
certificates of authority of all health maintenance organizations
that continue to meet all requirements of this section and
subsection (2), section four of this article, make application
therefor upon a form prescribed by the commissioner and pay the
renewal fee prescribed: Provided, That a health maintenance organization shall not qualify for renewal of its certificate of
authority if the organization has no subscribers in this state
within twelve months after issuance of the certificate of
authority: Provided, however, That an organization not
qualifying for renewal may apply for a new certificate of
authority under section three of this article.
(3) (4) 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; and
(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 health maintenance organization held by
the commissioner.
(4) (5) If the bankruptcy proceeding is initiated by a party
other than the health maintenance organization, the operation of
subsection (2) (4) of this section shall be stayed for a period
of sixty days following the date of commencement of the
proceeding.
§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 of the
organization 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 provided by the organization and utilization review
which meet those standards as the commissioner shall by rule
require; and
(c) That the organization has 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 rule.
(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 in this section 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 in this section 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 the medicare beneficiaries or
medicaid recipients in excess of the benefits compensated under
those 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 the
proposed schedule of charges used in connection with the health
care services;
(ii) That the health maintenance organization has and
maintains fully paid in capital stock, the following:
(A) i if If a for profit for-profit stock corporation, or
statutory surplus funds, if a nonprofit corporation, at least one
million dollars of fully paid-in capital stock; or In addition,
each health maintenance organization shall have and maintain
additional surplus funds of at least one million dollars;
(B) If a nonprofit corporation, at least one million dollars
of statutory surplus funds; and
(C) Both for-profit and nonprofit health maintenance
organization, additional surplus funds of at least one million
dollars;
(iii) Any arrangements which that 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;
and
(iv) Any agreement with providers for the provision of
health care services;
(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 reinsurance acceptable to the commissioner from an
accredited reinsurer or making other arrangements acceptable to
the commissioner:
(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
those fiscal years;
(g) The ownership, control and management of the
organization 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 probable cause 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, article eight of this chapter in the amount of one hundred thousand
dollars; and
(i) Effective the first day of May, one thousand nine
hundred ninety-eight, the health maintenance organization has a
quality assurance program which has been reviewed by the
commissioner or by a nationally recognized accreditation and
review organization approved by the commissioner; meets at least
those standards set forth in section seventeen-a of this article;
and is deemed satisfactory by the commissioner. If the
commissioner determines that the quality assurance program of a
health maintenance organization is deficient in any significant
area, the commissioner, in addition to other remedies provided in
this chapter, may establish a corrective action plan that the
health maintenance organization must follow as a condition to the
issuance of a certificate of authority: Provided, That in those
instances where a health maintenance organization has timely
applied for and reasonably pursued a review of its quality
assurance program, but the review has not been completed, the
health maintenance organization shall submit proof to the
commissioner of its application for that review.
(3) A certificate of authority shall be denied only after
compliance with the requirements of section twenty-one of this article.
(4) 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, logo 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; fidelity
bond; 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 the organization is
responsible for the funds in a fiduciary relationship to the
enrollees.
(b) A health maintenance organization shall maintain a
blanket fidelity bond covering all directors, officers, managers
and employees of the organization who receive, collect, disburse
or invest funds in connection with the activities of the
organization, issued by an insurer licensed in this state or, if
the fidelity bond required by this subsection is not available
from an insurer licensed in this state, a fidelity bond procured
by an excess line broker licensed in this state, in an amount at
least equal to the minimum amount of fidelity insurance as
provided in the national association of insurance commissioners
handbook, as amended, or as determined under a rule promulgated
by the commissioner.
(b) (c) 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 has the power to require
immediate cancellation of the contracts or the immediate
renegotiation of the contract by the parties whenever he or she
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 is liable for the
fee or fees rather than the subscriber; and the contract shall
state that liability.
(2) No subscriber of an HMO a health maintenance
organization is liable to any provider of health care services
for any services covered by the HMO health maintenance
organization if at any time during the provision of the services,
the provider, or its agents, are aware the subscriber is an HMO
a health maintenance organization enrollee.
(3) No If at any time during the provision of the services,
a provider, or its agents, are aware that the subscriber is a
health maintenance organization enrollee, that provider of
services or any representative of the provider shall may not
collect or attempt to collect from an HMO a health maintenance
organization subscriber any money for services covered by an HMO
a health maintenance organization and no provider or
representative of the provider may maintain any action at law against a subscriber of an HMO a health maintenance organization
to collect money owed to the provider by an HMO a health
maintenance organization.
(4) Every contract between an HMO a health maintenance
organization and a provider of health care services shall be in
writing and shall contain a provision that the subscriber is not
liable to the provider for any services covered by the
subscriber's contract with the HMO health maintenance
organization.
(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 health maintenance
organization.
(6) When a subscriber receives covered emergency health care
services from a noncontracting provider, the health maintenance
organization shall be responsible for payment of the providers
normal charges for those health care services, exclusive of any
applicable deductibles or copayments.
(6)(7) 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 that 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; and
(b) The contract must also provide that nonpayment for goods
or services rendered by the provider to the health maintenance
organization is not a valid reason for avoiding the sixty day
advance notice of cancellation.
(7)(8) 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; review of enrollee records; 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 grievances; and
(vi) The following exact statement in bold print: "Each subscriber or enrollee, by acceptance of the benefits described
in this evidence of coverage, shall be deemed to have consented
to the examination of his or her medical records for purposes of
utilization review, quality assurance and peer review by the
health maintenance organization or its designee."
(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, is subject to the
filing and approval requirements of subdivision (b), subsection
(1) of this section, unless the commissioner promulgates a rule
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 those laws apply. To
the extent, however, that those provisions do not apply the
requirements in subdivision (c), subsection (1) of this section,
are 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 a rate 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 the 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 the charges are
reasonable, the commissioner shall consider whether the 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) made a good faith effort to secure arrangements
whereby basic services can be obtained by subscribers from local
providers to the extent that the providers offer the services.
(3) Rates are inadequate if the premiums derived from the
rating structure, plus investment income, copayments, 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 health maintenance
organization 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) of this
section are met and any schedule of charges if the requirements
of subsection (2) of this section are met. It is unlawful to
issue the form or to use the schedule of charges until approved.
If the commissioner disapproves of the filing, he or she 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 the forms or charges, they shall be considered
approved.
(5) The commissioner may require the submission of whatever relevant information in addition to the schedule of charges which
he or she considers necessary in determining whether to approve
or disapprove a filing made pursuant to this section.
(6) An individual enrollee may cancel a contract with a
health maintenance organization at any time for any reason:
Provided, That a health maintenance organization may require that
the enrollee give sixty thirty days advance notice: Provided,
however, That an individual enrollee whose premium rate was
determined pursuant to a group contract may cancel a contract
with a health maintenance organization pursuant to the terms of
that contract.
§33-25A-9. Annual report.
Every health maintenance organization shall comply with and
is 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 that
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; and (iv) the organization's fidelity bond;
(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 and
human resources or other accredited entity a nationally
recognized accreditation and review organization or as the
commissioner may by rule require;
(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
those 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 Any 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-10. Information to enrollees.
Every health maintenance organization or its representative
shall annually, before the first day of April, provide to its
enrollees a summary of: Its most recent annual financial
statement, including a balance sheet and statement of receipts
and disbursements; a description of the health maintenance
organization, its basic health care services, its facilities and
personnel, any material changes therein since the last report,
the current evidence of coverage, and a clear and understandable
description of the health maintenance organization's method for
resolving enrollee complaints: Provided, That with respect to
enrollees who have been enrolled through contracts between a health maintenance organization and an employer, the health
maintenance organization shall be deemed to have satisfied the
requirement of this section by providing the requisite summary to
each enrolled employee: Provided, however, That with respect to
medicaid recipients enrolled under a group contract between a
health maintenance organization and the governmental agency
responsible for administering the medicaid program, the health
maintenance organization shall be deemed to have satisfied the
requirement of this section by providing the requisite summary to
each local office of the governmental agency responsible for
administering the medicaid program for inspection by enrollees of
the health maintenance organization.
§33-25A-11. Open enrollment period.
(1) Once a health maintenance organization has been in
operation at least five years, or has enrollment of not less than
fifty thousand persons, the 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 the 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 the requirement for open enrollment for a period
of not more than three years; or
(b) Authorize the organization to impose such any
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 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: Provided, That before the
commissioner grants such a waiver, the health maintenance
organization must provide the opinion of a qualified independent
actuary that the higher percentage of medicaid and medicare
recipients will not be detrimental to the solvency of the health
maintenance organization for a period of at least thirty-six
months into the future.
§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
considered approved. For purposes of this article:
(a) A statement or item of information shall be 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 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 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 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 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 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: 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 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
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"; 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 applies 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 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.
§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 With respect to individual and group contracts
covering fewer than twenty-five subscribers, after a subscriber
signs an HMO a health maintenance organization enrollment
application and before the HMO can health maintenance
organization may process the application changing or initiating
the subscriber coverage, each HMO health maintenance organization
must verify in writing, in a form prescribed by the commissioner,
the intent and desire of the individual subscriber to join the HMO health maintenance organization. The verification must shall
be in writing and conducted by someone outside the HMO's health
maintenance organization marketing department Each verification
and shall include the following show that:
(a) Confirmation that the The subscriber intends and
desires to join the HMO health maintenance organization;
(b) If the subscriber is a medicare or medicaid recipient,
confirmation that the subscriber understands that by joining the
HMO health maintenance organization he or she will be limited to
the benefits provided by the HMO health maintenance organization,
and medicare or medicaid will pay the HMO health maintenance
organization for the subscriber coverage;
(c) Confirmation that the The subscriber understands the
applicable restrictions of HMO's health maintenance organizations
especially that he or she must use the HMO health maintenance
organization providers and secure approval from the HMO health
maintenance organization to use health care providers outside the
plan; and
(d) If the subscriber is a member of an HMO a health
maintenance organization, confirmation that the subscriber
understands that he or she is transferring to another HMO health
maintenance organization.
(e) (3) The HMO health maintenance organization 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 his or her 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 he or
she has transferred from his or her 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 subscriber's application has been
processed and the health maintenance organization has confirmed
the subscriber's enrollment by written notice in the form
prescribed by the commissioner. The confirmation notice shall be
accompanied by the evidence of coverage required by section eight
of this article and shall confirm:
(a) The subscriber's transfer from his or her existing
coverage (i.e. from medicare, medicaid, another health
maintenance organization, etc.) to the new health maintenance
organization; and
(b) The date enrollment begins and when benefits will be available.
(4) The enrollment process shall be considered complete
seven days after the HMO health maintenance organization mails
the confirmation notice and evidence of coverage to the
subscriber. Each HMO must notify the subscriber of the date
enrollment begins and when benefits will be available. Each HMO
health maintenance organization is directly responsible for
enrollment abuses.
(3) (5) 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 the health maintenance
organizations. When necessary the rules may prohibit
door-to-door solicitations, may prohibit commission sales, and
may provide for such other proscriptions and other rules as are
required to effectuate the purposes of this article.
§33-25A-17. Examinations.
(1) The commissioner may make an examination of the affairs
of any health maintenance organization and providers with whom
the organization has contracts, agreements or other arrangements
as often as he or she considers 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 and human resources, or any entity contracted with by the
department of health and human resources which has been
accredited by a nationally recognized accrediting organization
and has been approved by the commissioner to make examinations
concerning the quality of health care services of any health
maintenance organization and providers with whom the organization
has contracts, agreements or other arrangements, or any entity
contracted with by the department of health and human resources,
as often as it considers 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
examination, the department of health and human resources or the
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 the examinations
and in every way facilitate them. For the purpose of
examinations, the commissioner and the department of health and
human resources have all powers necessary to conduct the 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 principals of the providers concerning their
business.
(4) The health maintenance organization is 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 the examination, the commissioner may accept
the report of an examination made by other states.
(6) The expenses of an examination assessing quality of
health care under subsection (2) of this section and section
seventeen-a of this article shall be reimbursed pursuant to
subdivision (i), subsection (5), section nine, article two of
this chapter.
§33-25A-17a. Quality assurance.
(a) Each health maintenance organization shall have in
writing a quality assurance program that describes the program's
objectives, organization and problem solving activities.
(b) The scope of the quality assurance program shall
include, at a minimum:
(1) Organizational arrangements and responsibilities for quality management and improvement processes;
(2) A documented utilization management program;
(3) Written policies and procedures for credentialing and
recredentialing physicians and other licensed providers who fall
under the scope of authority of the health maintenance
organization;
(4) A written policy that addresses enrollee's rights and
responsibilities;
(5) The adoption of practice guidelines for the use of
preventive health services; and
(6) Any other criteria deemed necessary by the commissioner.
(c) As a condition of doing business in this state, each
health maintenance organization which has been in existence for
at least two years shall apply for and submit to an accreditation
examination to be performed by a nationally recognized
accreditation and review organization approved by the
commissioner. The accreditation and review organization must be
experienced in health maintenance organization activities and in
the appraisal of medical practice and quality assurance in a
health maintenance organization setting: Provided, That in those
instances where a health maintenance organization has timely
applied for and reasonably pursued an accreditation examination, but the examination has not been completed, the health
maintenance organization may, upon compliance with all other
provisions of this article, engage in business in this state upon
submission of proof to the commissioner of its application for
review.
(d) Within thirty days of receipt of the written report of
the accreditation and review organization by the health
maintenance organization, the health maintenance organization
shall submit a copy of this report to the commissioner.
(e) This section shall become effective on the first day of
May, one thousand nine hundred ninety-eight.
§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 or she 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 the 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 and human resources 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 (l),
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 grievance procedure required by section twelve of
this article in a manner to reasonably resolve valid grievances;
(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;
(j) The health maintenance organization has otherwise failed
to substantially comply with this article; or
(k) The health maintenance organization has violated a
lawful order of the commissioner; or
(l) The health maintenance organization has not, after being
given reasonable notice, received or maintained external quality
assurance assessments pursuant to section seventeen-a of this
article deemed satisfactory by 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 the 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, the 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 the 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 or she 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-22. Fees.
Every health maintenance organization subject to this
article shall pay to the commissioner the following fees: For
filing an application for a certificate of authority or amendment thereto, two hundred dollars; for each renewal of a certificate
of authority, the annual fee as provided in section thirteen,
article three of this chapter; for each form filing and for each
rate filing, the fee as provided in section thirty-four, article
six of this chapter; and for filing each annual report,
twenty-five dollars. Fees charged under this section shall be
for the purposes set forth in section thirteen, article three of
this chapter.
§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 are not applicable to any health
maintenance organization granted a certificate of authority under
this article. The provisions of this article 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. The
provisions of this article shall not apply to an entity properly
licensed by a reciprocal state to provide health care services to employer groups, where residents of West Virginia are members of
an employer group, and the employer group contract is entered
into in the reciprocal state. For purposes of this subsection,
a "reciprocal state" means a state which physically borders West
Virginia and which has subscriber or enrollee hold harmless
requirements substantially similar to those set out in section
seven-a of 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 in this subsection 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 considered to be practicing medicine
and is 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); section seventeen, article six (noncomplying forms);
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 the code provisions made
applicable to health maintenance organizations by this section
refer to the "insurer", the "corporation" or words of similar
import, the 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-34. Ambulance services.
The Legislature finds that ambulance services in this state
are performed by various volunteer emergency service squads,
county operations and small businesses, which may lack the
sophistication and expertise required to negotiate a contract
with a health maintenance organization for the provision of
ambulance services, and that the best interests of the citizens of the state require the continued development and preservation
of an emergency medical system to serve all the citizens of the
state, including those citizens who do not receive health care
services through a health maintenance organization. Therefore,
the commissioner shall promulgate legislative rules, pursuant to
the provisions of article twenty-nine-a of this code, to regulate
contracting for emergency medical services. The rules shall be
promulgated as expeditiously as possible in order to be
considered by the Legislature in the regular session in the year
one thousand nine hundred ninety-seven. The rules shall consider
the following: Reimbursement for nonemergency transportation by
nonparticipating providers and the appropriate use of 911 or
community dispatching, as well as other items the commissioner
may deem necessary.