H. B. 2035


(By Delegates Hubbard, Givens, Caputo
and Stemple)
[Introduced January 13, 1999; referred to the
Committee on Banking and Insurance then Finance.]




A BILL to amend and reenact section nine, article sixteen, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended; to amend article sixteen, chapter thirty-three by adding thereto a new section, designated section eighteen; and to amend and reenact section fourteen, article twenty-five-a of said chapter, all relating to requiring that all health maintenance organizations, public employees' insurance act health coverage, and all group health insurance contracts provide equal coverage for any prescribed medication; that a ninety-day limitation of prescription drug supply may not be imposed for payment purposes by any health maintenance organization, public employees' insurance act health coverage, or group health insurance contract; and, that a health maintenance organization, public employees' insurance act health coverage, or group health insurance contract may not require that prescription drugs only be obtained by mail order.

Be it enacted by the Legislature of West Virginia:
That section nine, article sixteen, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted; and that article sixteen, chapter thirty-three be amended by adding thereto a new section, designated section eighteen; and that section fourteen, article twenty-five-a of said chapter be amended and reenacted, all to read as follows:
CHAPTER 5. GENERAL POWERS AND AUTHORITY OF THE GOVERNOR,

SECRETARY OF STATE AND ATTORNEY GENERAL; BOARD

OF PUBLIC WORKS; MISCELLANEOUS AGENCIES, COMMISSIONS,

OFFICES, PROGRAMS, ETC.

 ARTICLE 16. WEST VIRGINIA PUBLIC EMPLOYEES INSURANCE ACT.
§5-16-9. Authorization to execute contracts for group hospital and surgical insurance, group major medical insurance, group prescription drug insurance, group life and accidental death insurance and other accidental death insurance; mandated benefits; limitations; awarding of contracts; reinsurance; certificates for covered employees; discontinuance of contracts.

(a) The director is hereby given exclusive authorization to execute such the contract or contracts as are necessary to carry out the provisions of this article and to provide the plan or plans of group hospital and surgical insurance coverage, group major medical insurance coverage, group prescription drug insurance coverage and group life and accidental death insurance coverage selected in accordance with the provisions of this article, such the contract or contracts to be executed with one or more agencies, corporations, insurance companies or service organizations licensed to sell group hospital and surgical insurance, group major medical insurance, group prescription drug insurance and group life and accidental death insurance in this state.
(b) The group hospital or surgical insurance coverage and group major medical insurance coverage herein provided for shall include coverages and benefits for X ray and laboratory services in connection with mammograms and pap smears when performed for cancer screening or diagnostic services and annual checkups for prostate cancer in men age fifty and over. Such The benefits shall include, but not be limited to, the following:
(1) Baseline or other recommended mammograms for women age thirty-five to thirty-nine, inclusive;
(2) Mammograms recommended or required for women age forty to forty-nine, inclusive, every two years or as needed;
(3) A mammogram every year for women age fifty and over;
(4) A pap smear annually or more frequently based on the woman's physician's recommendation for women age eighteen and over; and
(5) A checkup for prostate cancer annually for men age fifty or over.
(c) The group life and accidental death insurance herein provided for shall be in the amount of ten thousand dollars for every employee. The amount of the group life and accidental death insurance to which an employee would otherwise be entitled shall be reduced to five thousand dollars upon such the employee attaining age sixty-five.
(d) All of the insurance coverage to be provided for under this article may be included in one or more similar contracts issued by the same or different carriers.
(e) The provisions of article three, chapter five-a of this code, relating to the division of purchases of the department of finance and administration, shall not apply to any contracts for any insurance coverage or professional services authorized to be executed under the provisions of this article. Before entering into any contract for any insurance coverage, as herein authorized, said the director shall invite competent bids from all qualified and licensed insurance companies or carriers, who may wish to offer plans for the insurance coverage desired. The director shall deal directly with insurers in presenting specifications and receiving quotations for bid purposes. No commission or finder's fee, or any combination thereof of a commission or finder's fee, shall be paid to any individual or agent; but this shall not preclude an underwriting insurance company or companies, at their own expense, from appointing a licensed resident agent, within this state, to service the companies' contracts awarded under the provisions of this article. Commissions reasonably related to actual service rendered for such the agent or agents may be paid by the underwriting company or companies: Provided, That in no event shall payment be made to any agent or agents when no actual services are not rendered or performed. The director shall award such the contract or contracts on a competitive basis. In awarding the contract or contracts the director shall take into account the experience of the offering agency, corporation, insurance company or service organization in the group hospital and surgical insurance field, group major medical insurance field, group prescription drug field and group life and accidental death insurance field, and its facilities for the handling of claims. In evaluating these factors, the director may employ the services of impartial, professional insurance analysts or actuaries or both. Any contract executed by the director with a selected carrier shall be a contract to govern all eligible employees subject to the provisions of this article. Nothing contained in this article shall prohibit any insurance carrier from soliciting employees covered hereunder to purchase additional hospital and surgical, major medical or life and accidental death insurance coverage.
(f) The director may authorize the carrier with whom a primary contract is executed to reinsure portions of such the contract with other carriers which elect to be a reinsurer and who are legally qualified to enter into a reinsurance agreement under the laws of this state.
(g) Each employee who is covered under any such contract or contracts shall receive a statement of benefits to which such the employee, his or her spouse and his or her dependents are entitled thereunder under the contract, setting forth such the information as to whom such the benefits shall be payable, to whom claims shall be submitted, and a summary of the provisions of any such contract or contracts as they affect the employee, his or her spouse and his or her dependents.
(h) The director may at the end of any contract period discontinue any contract or contracts it has executed with any carrier and replace the same with a contract or contracts with any other carrier or carriers meeting the requirements of this article.
(i) The director shall provide by contract or contracts entered into under the provisions of this article the cost for coverage of children's immunization services from birth through age sixte en years to provide immunization against the following illnesses: Diphtheria, polio, mumps, measles, rubella, tetanus, hepatitis-b, haemophilus influenzae-b and whooping cough. Additional immunizations may be required by the commissioner of the bureau of public health for public health purposes. Any contract entered into to cover these services shall require that all costs associated with immunization, including the cost of the vaccine, if incurred by the health care provider, and all costs of vaccine administration, be exempt from any deductible, per visit charge and/or copayment provisions which may be in force in these policies or contracts. This section does not require that other health care services provided at the time of immunization be exempt from any deductible and/or copayment provisions.
(j) The director shall provide by contract or contracts entered into under the provisions of this article the cost for coverage of all prescription drugs prescribed by a licensed medical or osteopathic physician. The director shall, additionally, prohibit any restriction on payment coverage for any period less than a ninety-day supply of prescription drugs. The director shall also prohibit any coverage requirement that prescription drugs be obtained by mail order only.
CHAPTER 33. INSURANCE.
ARTICLE 16. GROUP ACCIDENT AND SICKNESS INSURANCE.
§33-16-18. Prescription drugs to be fully covered; no restriction allowed on payment for less than ninety-day supply; no requirement that prescription drugs be obtained solely via mail order.

Any drug or medication prescribed by a licensed medical or osteopathic physician shall be equally covered for payment under any insurance contract applicable hereunder. No restriction of coverage for the purpose of payment may be imposed on any supply for prescription drugs less than a ninety-day supply. Nor may any requirement hereunder be made that prescription drugs may only be obtained from mail order sources.
ARTICLE 25A. HEALTH MAINTENANCE ORGANIZATION ACT.

 §33-25A-14. Prohibited practices.
(1) No health maintenance organization, or representative thereof of a health maintenance organization, 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 the 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"; (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.
(c) No health maintenance organization may refuse coverage of any prescription drug prescribed by a licensed medical or osteopathic physician. Nor may the organization impose any payment coverage on prescription drugs for up to a ninety-day supply of the drugs. Nor may the organization require that prescription drugs may only be obtained from mail order sources.


NOTE: The purpose of this bill is to require that all HMOs, PEIA insurance coverages, and group health insurance coverages equally provide payment coverage for all prescription drugs prescribed by licensed physicians. The bill also prohibits restrictions on payment based on supplies of prescription drugs for anything less than a ninety-day supply of the prescription drug while prohibiting any requirement that prescription drugs only be obtained from mail order sources.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

§33-16-18 is new; therefore, strike-throughs and underscoring have been omitted.