S.B. 294

1

PATIENT ACCESS REFORM
2 2011 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: J. Stuart Adams
5 House Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill amends provisions related to access to health care providers in the Health
10 Maintenance Organization and Preferred Provider Organization Chapters of the
11 Insurance Code.
12 Highlighted Provisions:
13 This bill:
14 . provides that a health maintenance organization and preferred provider organization
15 must reimburse an insured for services of a health care provider who is not under
16 contract if those services are otherwise covered by the insurance plan;
17 . establishes the reimbursement rate for noncontracted providers, which is based on
18 the amount that would be paid to a member of the same class of health care
19 provider;
20 . allows the health maintenance organization or preferred provider organization to
21 impose copayments and deductibles for noncontracted providers;
22 . prohibits the insurer from imposing cost-sharing measures greater than those
23 imposed with participating providers;
24 . requires the insurer to make payment directly to the health care provider for
25 out-patient services;
26 . clarifies the payment responsibilities of the insured;
27 . prohibits a nonparticipating provider who accepts the 95% reimbursement rate from

28 balance billing the insured for additional costs; and
29 . requires that out-of-pocket payments by insureds to noncontracted providers shall
30 apply to any plan deductible or out-of-pocket maximums.
31 Money Appropriated in this Bill:
32 None
33 Other Special Clauses:
34 None
35 Utah Code Sections Affected:
36 AMENDS:
37 31A-22-617, as last amended by Laws of Utah 2009, Chapter 12
38 ENACTS:
39 31A-8-503, Utah Code Annotated 1953
40
41 Be it enacted by the Legislature of the state of Utah:
42 Section 1. Section 31A-8-503 is enacted to read:
43 31A-8-503. Reimbursement of noncontracted providers.
44 (1) As used in this section, "class of health care providers" means all health care
45 providers licensed, or licensed and certified by the state, within the same professional, trade,
46 occupational, or facility licensure, or licensure and certification category established pursuant
47 to Title 26, Utah Health Code, and Title 58, Occupations and Professions.
48 (2) (a) Subject to Subsections (2)(b) through (d), a health maintenance organization
49 shall pay for the services of providers who are not participating providers with the health
50 maintenance organization, unless the illnesses or injuries treated by the provider are not within
51 the scope of the insured's health maintenance organization's health benefit plan.
52 (b) When the insured receives services from a provider who is not a participating
53 provider for the insured's health maintenance organization benefit plan, the health maintenance
54 organization shall reimburse the insured, in accordance with Subsection (2)(c), in an amount
55 equal to at least 95% of the amount that would be paid by the health maintenance organization
56 to:
57 (i) a participating provider; and
58 (ii) a member of the same class of health care provider.

59 (c) When reimbursing for services of out-patient providers who are not participating
60 providers, the health maintenance organization shall make direct payment to the provider.
61 (d) Notwithstanding Subsection (2)(b), a health maintenance organization may:
62 (i) impose a deductible or copayment on coverage of a medical condition treated by
63 nonparticipating providers if the deductible or copayment is not greater than the deductible or
64 copayment imposed on the same medical condition treated by participating providers for the
65 insured's health benefit plan; and
66 (ii) not impose cost-sharing measures, including copayments, deductibles, and
67 coinsurance greater than those imposed on the same medical condition treated by participating
68 providers for the insured's health benefit plan.
69 (3) (a) When an insured receives services from a nonparticipating provider who is
70 reimbursed under the provisions of Subsection (2)(b), the insured is responsible for any
71 copayments and deductibles that are imposed by the insurer under Subsection (2)(d).
72 (b) A nonparticipating provider who accepts the 95% reimbursement rate designated in
73 Subsection (2)(b) may not balance bill the insured for any costs above those designated in
74 Subsection (3)(a).
75 (4) This section does not apply when an individual's health maintenance organization
76 benefit plan is a Medicaid program or the Children's Health Insurance Program under Title 26,
77 Chapter 18, Medical Assistance Act.
78 Section 2. Section 31A-22-617 is amended to read:
79 31A-22-617. Preferred provider contract provisions.
80 Health insurance policies may provide for insureds to receive services or
81 reimbursement under the policies in accordance with preferred health care provider contracts as
82 follows:
83 (1) Subject to restrictions under this section, any insurer or third party administrator
84 may enter into contracts with health care providers as defined in Section 78B-3-403 under
85 which the health care providers agree to supply services, at prices specified in the contracts, to
86 persons insured by an insurer.
87 (a) (i) A health care provider contract may require the health care provider to accept the
88 specified payment as payment in full, relinquishing the right to collect additional amounts from
89 the insured person.

90 (ii) In any dispute involving a provider's claim for reimbursement, the same shall be
91 determined in accordance with applicable law, the provider contract, the subscriber contract,
92 and the insurer's written payment policies in effect at the time services were rendered.
93 (iii) If the parties are unable to resolve their dispute, the matter shall be subject to
94 binding arbitration by a jointly selected arbitrator. Each party is to bear its own expense except
95 the cost of the jointly selected arbitrator shall be equally shared. This Subsection (1)(a)(iii)
96 does not apply to the claim of a general acute hospital to the extent it is inconsistent with the
97 hospital's provider agreement.
98 (iv) An organization may not penalize a provider solely for pursuing a claims dispute
99 or otherwise demanding payment for a sum believed owing.
100 (v) If an insurer permits another entity with which it does not share common ownership
101 or control to use or otherwise lease one or more of the organization's networks of participating
102 providers, the organization shall ensure, at a minimum, that the entity pays participating
103 providers in accordance with the same fee schedule and general payment policies as the
104 organization would for that network.
105 (b) The insurance contract may reward the insured for selection of preferred health care
106 providers by:
107 (i) reducing premium rates;
108 (ii) reducing deductibles;
109 (iii) coinsurance;
110 (iv) other copayments; or
111 (v) any other reasonable manner.
112 (c) If the insurer is a managed care organization, as defined in Subsection
113 31A-27a-403 (1)(f):
114 (i) the insurance contract and the health care provider contract shall provide that in the
115 event the managed care organization becomes insolvent, the rehabilitator or liquidator may:
116 (A) require the health care provider to continue to provide health care services under
117 the contract until the earlier of:
118 (I) 90 days after the date of the filing of a petition for rehabilitation or the petition for
119 liquidation; or
120 (II) the date the term of the contract ends; and

121 (B) subject to Subsection (1)(c)(v), reduce the fees the provider is otherwise entitled to
122 receive from the managed care organization during the time period described in Subsection
123 (1)(c)(i)(A);
124 (ii) the provider is required to:
125 (A) accept the reduced payment under Subsection (1)(c)(i)(B) as payment in full; and
126 (B) relinquish the right to collect additional amounts from the insolvent managed care
127 organization's enrollee, as defined in Subsection 31A-27a-403 (1)(b);
128 (iii) if the contract between the health care provider and the managed care organization
129 has not been reduced to writing, or the contract fails to contain the language required by
130 Subsection (1)(c)(i), the provider may not collect or attempt to collect from the enrollee:
131 (A) sums owed by the insolvent managed care organization; or
132 (B) the amount of the regular fee reduction authorized under Subsection (1)(c)(i)(B);
133 (iv) the following may not bill or maintain any action at law against an enrollee to
134 collect sums owed by the insolvent managed care organization or the amount of the regular fee
135 reduction authorized under Subsection (1)(c)(i)(B):
136 (A) a provider;
137 (B) an agent;
138 (C) a trustee; or
139 (D) an assignee of a person described in Subsections (1)(c)(iv)(A) through (C); and
140 (v) notwithstanding Subsection (1)(c)(i):
141 (A) a rehabilitator or liquidator may not reduce a fee by less than 75% of the provider's
142 regular fee set forth in the contract; and
143 (B) the enrollee shall continue to pay the copayments, deductibles, and other payments
144 for services received from the provider that the enrollee was required to pay before the filing
145 of:
146 (I) a petition for rehabilitation; or
147 (II) a petition for liquidation.
148 (2) (a) Subject to Subsections (2)(b) through [(2)(f)](g), an insurer, including a health
149 maintenance organization governed by Chapter 8, Health Maintenance Organizations and
150 Limited Health Plans, using preferred or participating health care provider contracts shall pay
151 for the services of health care providers not under the contract, unless the illnesses or injuries

152 treated by the health care provider are not within the scope of the insurance contract. As used
153 in this section, "class of health care providers" means all health care providers licensed or
154 licensed and certified by the state within the same professional, trade, occupational, or facility
155 licensure or licensure and certification category established pursuant to Titles 26, Utah Health
156 Code and 58, Occupations and Professions.
157 (b) (i) Until July 1, 2012, when the insured receives services from a health care
158 provider not under contract, the insurer shall reimburse the insured for at least [75%] 95% of
159 the average amount paid by the insurer for comparable services of preferred health care
160 providers who are members of the same class of health care providers.
161 (ii) Notwithstanding Subsection (2)(b)(i), an insurer may offer a health plan that
162 complies with the provisions of Subsection 31A-22-618.5 (3) if the insurer offers one health
163 benefit plan that complies with Subsection (2)(b)(i).
164 (iii) The commissioner may adopt a rule dealing with the determination of what
165 constitutes [75%] 95% of the average amount paid by the insurer under Subsection (2)(b)(i) for
166 comparable services of preferred health care providers who are members of the same class of
167 health care providers.
168 (c) When reimbursing for services of outpatient health care providers not under
169 contract, the insurer [may] shall make direct payment to the [insured] provider.
170 (d) (i) Notwithstanding Subsection (2)(b), an insurer using preferred or participating
171 health care provider contracts may impose a deductible and copayments on coverage of a
172 medical condition treated by health care providers not under contract[.] with the insurer, if the
173 deductible, copayment, or coinsurance is not greater that the deductible, copayment, or
174 coinsurance imposed on the same medical condition treated by health care providers not under
175 contract with the insurer.
176 (ii) Out-of-pocket payments by insureds to health care providers not under contract
177 shall apply toward deductibles and out-of-pocket maximums in the same way and to the same
178 extent as payments to preferred or participating providers.
179 (e) When selecting health care providers with whom to contract under Subsection (1),
180 an insurer may not unfairly discriminate between classes of health care providers, but may
181 discriminate within a class of health care providers, subject to Subsection (7).
182 (f) For purposes of this section, unfair discrimination between classes of health care

183 providers shall include:
184 (i) refusal to contract with class members in reasonable proportion to the number of
185 insureds covered by the insurer and the expected demand for services from class members; and
186 (ii) refusal to cover procedures for one class of providers that are:
187 (A) commonly utilized by members of the class of health care providers for the
188 treatment of illnesses, injuries, or conditions;
189 (B) otherwise covered by the insurer; and
190 (C) within the scope of practice of the class of health care providers.
191 (g) (i) A health care provider not under contract with the insurer who accepts the 95%
192 reimbursement from the insured's health plan may not balance bill the insured for costs above
193 the reimbursement rate.
194 (ii) When an insured receives services from a health care provider not under contract
195 that are reimbursed under the provisions of Subsection (2)(b), the insured is responsible for any
196 copayments or deductibles that are imposed by the insurer under Subsection (2)(d).
197 (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
198 to the insured that it has entered into preferred health care provider contracts. The insurer shall
199 provide sufficient detail on the preferred health care provider contracts to permit the insured to
200 agree to the terms of the insurance contract. The insurer shall provide at least the following
201 information:
202 (a) a list of the health care providers under contract and if requested their business
203 locations and specialties;
204 (b) a description of the insured benefits, including any deductibles, coinsurance, or
205 other copayments;
206 (c) a description of the quality assurance program required under Subsection (4); and
207 (d) a description of the adverse benefit determination procedures required under
208 Subsection (5).
209 (4) (a) An insurer using preferred health care provider contracts shall maintain a quality
210 assurance program for assuring that the care provided by the health care providers under
211 contract meets prevailing standards in the state.
212 (b) The commissioner in consultation with the executive director of the Department of
213 Health may designate qualified persons to perform an audit of the quality assurance program.

214 The auditors shall have full access to all records of the organization and its health care
215 providers, including medical records of individual patients.
216 (c) The information contained in the medical records of individual patients shall
217 remain confidential. All information, interviews, reports, statements, memoranda, or other data
218 furnished for purposes of the audit and any findings or conclusions of the auditors are
219 privileged. The information is not subject to discovery, use, or receipt in evidence in any legal
220 proceeding except hearings before the commissioner concerning alleged violations of this
221 section.
222 (5) An insurer using preferred health care provider contracts shall provide a reasonable
223 procedure for resolving complaints and adverse benefit determinations initiated by the insureds
224 and health care providers.
225 (6) An insurer may not contract with a health care provider for treatment of illness or
226 injury unless the health care provider is licensed to perform that treatment.
227 (7) (a) A health care provider or insurer may not discriminate against a preferred health
228 care provider for agreeing to a contract under Subsection (1).
229 (b) Any health care provider licensed to treat any illness or injury within the scope of
230 the health care provider's practice, who is willing and able to meet the terms and conditions
231 established by the insurer for designation as a preferred health care provider, shall be able to
232 apply for and receive the designation as a preferred health care provider. Contract terms and
233 conditions may include reasonable limitations on the number of designated preferred health
234 care providers based upon substantial objective and economic grounds, or expected use of
235 particular services based upon prior provider-patient profiles.
236 (8) Upon the written request of a provider excluded from a provider contract, the
237 commissioner may hold a hearing to determine if the insurer's exclusion of the provider is
238 based on the criteria set forth in Subsection (7)(b).
239 (9) Insurers are subject to the provisions of Sections 31A-22-613.5 , 31A-22-614.5 , and
240 31A-22-618 .
241 (10) Nothing in this section is to be construed as to require an insurer to offer a certain
242 benefit or service as part of a health benefit plan.
243 (11) This section does not apply to catastrophic mental health coverage provided in
244 accordance with Section 31A-22-625 .

Legislative Review Note
as of 2-18-11 9:15 AM

Office of Legislative Research and General Counsel