H. B. 2166
(By Delegates Rowe, Dalton, Manuel and Leach)
[Introduced January 13, 1999; referred to the
Committee on Government Organization.]
A BILL to amend and reenact sections two and seven-a, article
twenty-five-a, chapter thirty-three of the code of West
Virginia, one thousand nine hundred thirty-one, as amended,
all relating to health maintenance organizations; defining
terms; changing the definition of "primary care physician"
to include providers of school-based health care services to
child subscribers; providing for provider contracts and
payments for health care services provided to subscribers;
providing for payment of emergency health care services and
health care services to child subscribers by school-based
health care providers; and providing terms for provider
contracts.
Be it enacted by the Legislature of West Virginia:
That sections two and seven-a, 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,
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, which services need not necessarily include
all procedures or services offered by a service provider.
(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, school-based health
care 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: Provided, however, That when preventive and
wellness health care services and routine primary care health
care services are available to child subscribers by school-based
health care providers to child subscribers, those school-based
health care providers should participate with the health
maintenance organization as an additional primary health care
provider.
(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 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 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 and, for children
subscribers, in addition to any other provider contracting with
the health maintenance organization to provide health services to
a child subscriber, the child's primary care physician shall
include school-based providers of health care services:
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-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 a health maintenance organization is
liable to any provider of health care services for any services
covered by the health maintenance organization if at any time
during the provision of the services, the provider, or its
agents, are aware the subscriber is a health maintenance
organization enrollee.
(3) 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 may not collect or
attempt to collect from a health maintenance organization
subscriber any money for services covered by a health maintenance
organization and no provider or representative of the provider
may maintain any action at law against a subscriber of a health
maintenance organization to collect money owed to the provider by
a health maintenance organization.
(4) Every contract between 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 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 health maintenance organization.
(6) When a subscriber receives covered emergency health care
services from a noncontracting provider or, from a school-based
health care provider or facility providing health care services
to a child subscriber, the health maintenance organization shall
be responsible for payment of the provider's normal charges for
those health care services, exclusive of any applicable
deductibles or copayments.
(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.
(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.
NOTE: The purpose of this bill is to have school-based
health care providers and facilities defined as additional
primary care physicians for children subscribers of health
maintenance organizations.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.