H.B. 216 Enrolled

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

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

- 2 -

by Sections 59-9-101 through 59-9-104.
Section 2. Section 31A-8-501 is enacted to read:
Part 5. Miscellaneous Provisions
31A-8-501. Access to health care providers.
(1) As used in this section:
(a) "Class of health care provider" means a health care provider or a health care facility
regulated by the state within the same professional, trade, occupational, or certification category
established under Title 58, Occupations and Professions, or within the same facility licensure
category established under Title 26, Chapter 21, Health Care Facilities Inspection and Licensure Act.
(b) "Covered health care services" or "covered services" means health care services for
which an enrollee is entitled to receive under the terms of a health maintenance organization
contract.
(c) "Credentialed staff member" means a health care provider with active staff privileges at
an independent hospital or federally qualified health center.
(d) "Federally qualified health center" means as defined in the Social Security Act, 42 U.S.C.
Sec. 1395(x).
(e) "Independent hospital" means a general acute hospital that:
(i) is licensed pursuant to Title 26, Chapter 21, Health Care Facilities Inspection and
Licensure Act; and
(ii) is controlled by a board of directors of which 51% or more reside in the county where
the hospital is located and:
(A) the board of directors is ultimately responsible for the policy and financial decisions of
the hospital; or
(B) the hospital is licensed for 45 or fewer beds and is not owned, in whole or in part, by an
entity that owns or controls a health maintenance organization if the hospital is a contracting facility
of the organization.
(f) "Noncontracting provider" means an independent hospital, federally qualified health
center, or credentialed staff member who has not contracted with a health maintenance organization

- 3 -

to provide health care services to enrollees of the organization.
(2) A health maintenance organization shall pay for covered health care services rendered
to an enrollee by an independent hospital, a credentialed staff member at an independent hospital,
or a credentialed staff member at his local practice location if:
(a) the enrollee lives or resides within 30 paved road miles of the independent hospital;
(b) the independent hospital is located in a county with a population density of less than 100
people per square mile; and
(c) the enrollee has complied with the prior authorization and utilization review requirements
otherwise required by the health maintenance organization contract.
(3) A health maintenance organization shall pay for covered health care services rendered
to an enrollee at a federally qualified health center if:
(a) the enrollee lives or resides within 30 paved road miles of a federally qualified health
center;
(b) the federally qualified health center is located in a county with a population density of
less than 100 people per square mile; and
(c) the enrollee has complied with the prior authorization and utilization review requirements
otherwise required by the health maintenance organization contract.
(4) (a) A health maintenance organization shall reimburse a noncontracting provider or the
enrollee for covered services rendered pursuant to Subsection (2) a like dollar amount as it pays to
contracting providers under a noncapitated arrangement for comparable services.
(b) A health maintenance organization shall reimburse a federally qualified health center or
the enrollee for covered services rendered pursuant to Subsection (3) a like amount as paid by the
health maintenance organization under a noncapitated arrangement for comparable services to a
contracting provider in the same class of health care providers as the provider who rendered the
service.
(5) A noncontracting provider may only refer an enrollee to another noncontracting provider
so as to obligate the enrollee's health maintenance organization to pay for the resulting services if:
(a) the noncontracting provider making the referral or the enrollee has received prior

- 4 -

authorization from the organization for the referral; or
(b) the practice location of the noncontracting provider to whom the referral is made:
(i) is located in a county with a population density of less than 100 people per square mile;
and
(ii) is within 30 paved road miles of:
(A) the place where the enrollee lives or resides; or
(B) the independent hospital or federally qualified health center at which the enrollee may
receive covered services pursuant to Subsection (2) or (3).
(6) Notwithstanding this section, a health maintenance organization may contract directly
with an independent hospital, federally qualified health center, or credentialed staff member.
Section 3. Repealer.
This act repeals:
Section 31A-22-617.5 (Effective 07/01/97), Access to health care providers.
Section 4. Effective date.
This act takes effect on July 1, 1997.

- 5 -