H.B. 216

1

RURAL HEALTH CARE PROVIDER AMENDMENTS
2 1997 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: J. Brent Haymond
5 AN ACT RELATING TO INSURANCE; REQUIRING A HEALTH MAINTENANCE
6 ORGANIZATION TO PAY FOR MEDICAL SERVICES RENDERED TO AN ENROLLEE
7 BY AN INDEPENDENT HOSPITAL, FEDERALLY QUALIFIED HEALTH CENTER, OR
8 CREDENTIALED STAFF MEMBER LOCATED IN A COUNTY WITH A POPULATION
9 DENSITY OF LESS THAN 100 PERSONS PER SQUARE MILE AND WITHIN 30 MILES
10 OF THE ENROLLEE; AND PROVIDING AN EFFECTIVE DATE.
11 This act affects sections of Utah Code Annotated 1953 as follows:
12 AMENDS:
13 31A-8-103 (Effective 07/01/97), as last amended by Chapter 339, Laws of Utah 1996
14 ENACTS:
15 31A-8-501, Utah Code Annotated 1953
16 REPEALS:
17 31A-22-617.5 (Effective 07/01/97), as enacted by Chapter 339, Laws of Utah 1996
18 Be it enacted by the Legislature of the state of Utah:
19 Section 1. Section 31A-8-103 (Effective 07/01/97) is amended to read:
20 31A-8-103 (Effective 07/01/97). Applicability to other provisions of law.
21 (1) Except for exemptions specifically granted under this title, organizations are subject
22 to regulation under all of the provisions of this title. Notwithstanding any provision of this title,
23 organizations licensed under this chapter are wholly exempt from the provisions of Chapters 7, 9,
24 10, 11, 12, 13, 19, and 28. In addition, organizations are not subject to:
25 (a) Chapter 3, except for Part I;
26 (b) Section 31A-4-107;
27 (c) Chapter 5, except for provisions specifically made applicable by this chapter;

1 (d) Chapter 14, except for provisions specifically made applicable by this chapter;
2 (e) Chapters 17 and 18, except as made applicable by the commissioner by rule consistent
3 with this chapter; and
4 (f) Chapter 22, except for Parts VI, VII, and XII.
5 (2) The commissioner may by rule waive other specific provisions of this title that he
6 considers inapplicable to health maintenance organizations or limited health plans, upon a finding
7 that such a waiver will not endanger the interests of enrollees, investors, or the public.
8 (3) Title 16, Chapter 6, Utah Nonprofit Corporation and Co-operative Association Act,
9 and Title 16, Chapter 10a, Utah Revised Business Corporation Act, do not apply to organizations
10 except as specifically made applicable by:
11 (a) this chapter;
12 (b) a provision referenced under this chapter; or
13 (c) a rule adopted by the commissioner to deal with corporate law issues of health
14 maintenance organizations that are not settled under this chapter.
15 (4) Whenever in this chapter a section, subsection, or paragraph of Chapter 5 or 14 is made
16 applicable to organizations, the application is of those provisions that apply to mutual corporations
17 if the organization is nonprofit and of those that apply to stock corporations if the organization is
18 for profit. Whenever a provision under Chapter 5 or 14 is made applicable to organizations under
19 this chapter, "mutual" means nonprofit organization.
20 (5) Solicitation of enrollees by an organization is not a violation of any provision of law
21 relating to solicitation or advertising by health professionals if that solicitation is made in
22 accordance with the provisions of this chapter and Chapter 23.
23 (6) Nothing in this title prohibits any health maintenance organization from meeting the
24 requirements of any federal law that enables the health maintenance organization to receive federal
25 funds or to obtain or maintain federal qualification status.
26 (7) Except as provided in Section [31A-22-617.5] 31A-8-501, organizations are exempt
27 from statutes in this title or department rules that restrict or limit their freedom of choice in
28 contracting with or selecting health care providers, including Section 31A-22-618.
29 (8) Organizations are exempt from the assessment or payment of premium taxes imposed
30 by Sections 59-9-101 through 59-9-104.
31 Section 2. Section 31A-8-501 is enacted to read:

- 2 -

1 Part 5. Miscellaneous Provisions
2 31A-8-501. Access to health care providers.
3 (1) As used in this section:
4 (a) "Class of health care provider" means a health care provider or a health care facility
5 regulated by the state within the same professional, trade, occupational, or certification category
6 established under Title 58, Occupations and Professions, or within the same facility licensure
7 category established under Title 26, Chapter 21, Health Care Facilities Inspection and Licensure
8 Act.
9 (b) "Covered health care services" or "covered services" means health care services for
10 which an enrollee is entitled to receive under the terms of a health maintenance organization
11 contract.
12 (c) "Credentialed staff member" means a health care provider with active staff privileges
13 at an independent hospital or federally qualified health center.
14 (d) "Federally qualified health center" is defined in the Social Security Act, 42 U.S.C. Sec.
15 1395(x).
16 (e) "Independent hospital" means a general acute hospital that:
17 (i) is licensed pursuant to Title 26, Chapter 21, Health Care Facilities Inspection and
18 Licensure Act; and
19 (ii) is controlled by a board of directors of which 51% or more reside in the county where
20 the hospital is located and:
21 (A) the board of directors is ultimately responsible for the policy and financial decisions
22 of the hospital; or
23 (B) the hospital is licensed for 45 or fewer beds and is not owned, in whole or in part, by
24 an entity that owns or controls a health maintenance organization if the hospital is a contracting
25 facility of the organization.
26 (f) "Noncontracting provider" means an independent hospital, federally qualified health
27 center, or credentialed staff member who has not contracted with a health maintenance
28 organization to provide health care services to enrollees of the organization.
29 (2) A health maintenance organization shall pay for covered health care services rendered
30 to an enrollee by an independent hospital, a credentialed staff member at an independent hospital,
31 or a credentialed staff member at his local practice location if:

- 3 -

1 (a) the enrollee lives or resides within 30 paved road miles of the independent hospital;
2 (b) the independent hospital is located in a county with a population density of less than
3 100 people per square mile; and
4 (c) the enrollee has complied with the prior authorization and utilization review
5 requirements otherwise required by the health maintenance organization contract.
6 (3) A health maintenance organization shall pay for covered health care services rendered
7 to an enrollee at a federally qualified health center if:
8 (a) the enrollee lives or resides within 30 paved road miles of a federally qualified health
9 center;
10 (b) the federally qualified health center is located in a county with a population density of
11 less than 100 people per square mile; and
12 (c) the enrollee has complied with the prior authorization and utilization review
13 requirements otherwise required by the health maintenance organization contract.
14 (4) (a) A health maintenance organization shall reimburse a noncontracting provider or the
15 enrollee for covered services rendered pursuant to Subsection (2) a like dollar amount as it pays
16 to contracting providers h UNDER A NONCAPITATED ARRANGEMENT h for comparable services.
17 (b) A health maintenance organization shall reimburse a federally qualified health center
18 or the enrollee for covered services rendered pursuant to Subsection (3) a like amount as paid by
19 the health maintenance organization under a noncapitated arrangement for comparable services
20 to a contracting provider in the same class of health care providers as the provider who rendered
21 the service.
22 (5) A noncontracting provider may only refer an enrollee to another noncontracting
23 provider so as to obligate the enrollee's health maintenance organization to pay for the resulting
24 services if:
25 (a) the noncontracting provider making the referral or the enrollee has received prior
26 authorization from the organization for the referral; or
27 (b) the practice location of the noncontracting provider to whom the referral is made:
28 (i) is located in a county with a population density of less than 100 people per square mile;
29 and
30 (ii) is within 30 paved road miles of:
31 (A) the place where the enrollee lives or resides; or

lilac-January 27, 1997

- 4 -

1 (B) the independent hospital or federally qualified health center at which the enrollee may
2 receive covered services pursuant to Subsection (2) or (3).
3 (6) Notwithstanding this section, a health maintenance organization may contract directly
4 with an independent hospital, federally qualified health center, or credentialed staff member.
5 Section 3. Repealer.
6 This act repeals:
7 Section 31A-22-617.5 (Effective 07/01/97), Access to health care providers.
8 Section 4. Effective date.
9 This act takes effect on July 1, 1997.




Legislative Review Note
as of 1-7-97 9:52 AM

A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

- 5 -