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H.B. 432
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6 AN ACT RELATING TO HEALTH; PERMITTING AN INSURED TO CHOOSE A HEALTH
7 CARE PROVIDER HEALTH CARE FACILITY, OR MEDICAL EQUIPMENT SUPPLIER;
8 REQUIRING THE INSURER TO REIMBURSE THE INSURED'S PROVIDER, FACILITY,
9 AND EQUIPMENT SUPPLIER ON THE SAME TERMS AS THE INSURER REIMBURSES
10 ITS PROVIDERS, FACILITIES, AND EQUIPMENT SUPPLIERS; REQUIRING A
11 PROVIDER, FACILITY, OR EQUIPMENT SUPPLIER TO ACCEPT PAYMENT UNDER
12 THE TERMS OF THE INSURANCE CONTRACT; AND PROVIDING AN EFFECTIVE
13 DATE.
14 This act affects sections of Utah Code Annotated 1953 as follows:
15 AMENDS:
16 31A-8-103, as last amended by Chapter 44, Laws of Utah 1997
17 31A-22-617, as last amended by Chapters 314 and 316, Laws of Utah 1994
18 ENACTS:
19 31A-22-623, Utah Code Annotated 1953
20 Be it enacted by the Legislature of the state of Utah:
21 Section 1. Section 31A-8-103 is amended to read:
22 31A-8-103. Applicability to other provisions of law.
23 (1) Except for exemptions specifically granted under this title, organizations are subject
24 to regulation under all of the provisions of this title. Notwithstanding any provision of this title,
25 organizations licensed under this chapter are wholly exempt from the provisions of Chapters 7, 9,
26 10, 11, 12, 13, 19, and 28. In addition, organizations are not subject to:
27 (a) Chapter 3, except for Part I;
1 (b) Section 31A-4-107;
2 (c) Chapter 5, except for provisions specifically made applicable by this chapter;
3 (d) Chapter 14, except for provisions specifically made applicable by this chapter;
4 (e) Chapters 17 and 18, except as made applicable by the commissioner by rule consistent
5 with this chapter; and
6 (f) Chapter 22, except for Parts VI, VII, and XII.
7 (2) The commissioner may by rule waive other specific provisions of this title that he
8 considers inapplicable to health maintenance organizations or limited health plans, upon a finding
9 that such a waiver will not endanger the interests of enrollees, investors, or the public.
10 (3) Title 16, Chapter 6, Utah Nonprofit Corporation and Co-operative Association Act,
11 and Title 16, Chapter 10a, Utah Revised Business Corporation Act, do not apply to organizations
12 except as specifically made applicable by:
13 (a) this chapter;
14 (b) a provision referenced under this chapter; or
15 (c) a rule adopted by the commissioner to deal with corporate law issues of health
16 maintenance organizations that are not settled under this chapter.
17 (4) Whenever in this chapter a section, subsection, or paragraph of Chapter 5 or 14 is made
18 applicable to organizations, the application is of those provisions that apply to mutual corporations
19 if the organization is nonprofit and of those that apply to stock corporations if the organization is
20 for profit. Whenever a provision under Chapter 5 or 14 is made applicable to organizations under
21 this chapter, "mutual" means nonprofit organization.
22 (5) Solicitation of enrollees by an organization is not a violation of any provision of law
23 relating to solicitation or advertising by health professionals if that solicitation is made in
24 accordance with the provisions of this chapter and Chapter 23.
25 (6) Nothing in this title prohibits any health maintenance organization from meeting the
26 requirements of any federal law that enables the health maintenance organization to receive federal
27 funds or to obtain or maintain federal qualification status.
28 (7) Except as provided in [
29 exempt from statutes in this title or department rules that restrict or limit their freedom of choice
30 in contracting with or selecting health care providers, including Section 31A-22-618.
31 (8) Organizations are exempt from the assessment or payment of premium taxes imposed
1 by Sections 59-9-101 through 59-9-104.
2 Section 2. Section 31A-22-617 is amended to read:
3 31A-22-617. Preferred provider contract provisions.
4 Health insurance policies may provide for insureds to receive services or reimbursement
5 under the policies in accordance with preferred health care provider contracts as follows:
6 (1) Subject to restrictions under this section, any insurer or third party administrator may
7 enter into contracts with health care providers as defined in Section 78-14-3 under which the health
8 care providers agree to supply services, at prices specified in the contracts, to persons insured by
9 an insurer. The health care provider contract may require the health care provider to accept the
10 specified payment as payment in full, relinquishing the right to collect additional amounts from
11 the insured person. The insurance contract may reward the insured for selection of preferred health
12 care providers by reducing premium rates, reducing deductibles, coinsurance, or other copayments,
13 or in any other reasonable manner.
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22 equipment supplier not under contract, the insurer shall reimburse the insured [
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2 an insurer may not unfairly discriminate between classes of health care providers, but may
3 discriminate within a class of health care providers, subject to Subsection (7).
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5 providers shall include:
6 (i) refusal to contract with class members in reasonable proportion to the number of
7 insureds covered by the insurer and the expected demand for services from class members; and
8 (ii) refusal to cover procedures for one class of providers that are:
9 (A) commonly utilized by members of the class of health care providers for the treatment
10 of illnesses, injuries, or conditions;
11 (B) otherwise covered by the insurer; and
12 (C) within the scope of practice of the class of health care providers.
13 (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
14 to the insured that it has entered into preferred health care provider contracts. The insurer shall
15 provide sufficient detail on the preferred health care provider contracts to permit the insured to
16 agree to the terms of the insurance contract. The insurer shall provide at least the following
17 information:
18 (a) a list of the health care providers under contract and if requested their business
19 locations and specialties;
20 (b) a description of the insured benefits, including any deductibles, coinsurance, or other
21 copayments;
22 (c) a description of the quality assurance program required under Subsection (4); and
23 (d) a description of the grievance procedures required under Subsection (5).
24 (4) (a) An insurer using preferred health care provider contracts shall maintain a quality
25 assurance program for assuring that the care provided by the health care providers under contract
26 meets prevailing standards in the state.
27 (b) The commissioner in consultation with the executive director of the Department of
28 Health may designate qualified persons to perform an audit of the quality assurance program. The
29 auditors shall have full access to all records of the organization and its health care providers,
30 including medical records of individual patients.
31 (c) The information contained in the medical records of individual patients shall remain
1 confidential. All information, interviews, reports, statements, memoranda, or other data furnished
2 for purposes of the audit and any findings or conclusions of the auditors are privileged. The
3 information is not subject to discovery, use, or receipt in evidence in any legal proceeding except
4 hearings before the commissioner concerning alleged violations of this section.
5 (5) An insurer using preferred health care provider contracts shall provide a reasonable
6 procedure for resolving complaints and grievances initiated by the insureds and health care
7 providers.
8 (6) An insurer may not contract with a health care provider for treatment of illness or
9 injury unless the health care provider is licensed to perform that treatment.
10 (7) (a) No health care provider or insurer may discriminate against a preferred health care
11 provider for agreeing to a contract under Subsection (1).
12 (b) Any health care provider licensed to treat any illness or injury within the scope of the
13 health care provider's practice, who is willing and able to meet the terms and conditions
14 established by the insurer for designation as a preferred health care provider, shall be able to apply
15 for and receive the designation as a preferred health care provider. Contract terms and conditions
16 may include reasonable limitations on the number of designated preferred health care providers
17 based upon substantial objective and economic grounds, or expected use of particular services
18 based upon prior provider-patient profiles.
19 (8) Upon the written request of a provider excluded from a provider contract, the
20 commissioner may hold a hearing to determine if the insurer's exclusion of the provider is based
21 on the criteria set forth in Subsection (7)(b).
22 (9) Insurers are subject to the provisions of Sections 31A-22-613.5, 31A-22-614.5, and
23 31A-22-618.
24 (10) Nothing in this section is to be construed as to require an insurer to offer a certain
25 benefit or service as part of a health benefit plan.
26 Section 3. Section 31A-22-623 is enacted to read:
27 31A-22-623. Choice of health care providers.
28 (1) An insured may receive health care services from a health care provider, health care
29 facility, or medical equipment supplier of his choice and the insurer shall pay for those services
30 if:
31 (a) the illness, injury, or condition is covered by the insured's health insurance contract;
1 (b) the provider, facility, or equipment supplier is a member of a class of health care
2 providers, health care facilities, or medical equipment suppliers covered by the insured's health
3 insurance contract; and
4 (c) the insured has met any preauthorization or utilization review for the services as
5 required by the insured's health insurance contract.
6 (2) (a) When an insurer receives a request for payment from a health care provider, health
7 care facility, or medical equipment supplier under Subsection (1), the insurer shall pay to the
8 requesting provider, facility, or equipment supplier the average amount the insurer pays for
9 comparable services to a provider or facility who:
10 (i) is under contract with or employed by the insurer; and
11 (ii) is in the same class as the requesting provider, facility, or equipment supplier.
12 (b) The commissioner may adopt rules for calculating the average amount the insurer pays
13 to providers, facilities, and equipment suppliers who are under contract with or employed by it.
14 (3) If a health care provider, health care facility, or medical equipment supplier renders
15 services that are eligible for payment under Subsection (1), receives the information necessary for
16 payment from the insured, and has not entered into an agreement to the contrary with the insured
17 before services were rendered, the provider, facility, or equipment supplier shall accept as payment
18 in full:
19 (a) the amount paid by the insurer as required by Subsection (2); and
20 (b) any deductible or copayment paid by the insured as required by the insured's health
21 insurance contract.
22 Section 4. Effective date.
23 This act takes effect on July 1, 1998.
Legislative Review Note
as of 2-20-98 10:52 AM
A limited legal review of this bill raises no obvious constitutional or statutory concerns.
Office of Legislative Research and General Counsel
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