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.]
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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.