First Substitute S.B. 29

Senator Leonard M. Blackham proposes the following substitute bill:

1 ACCESS TO RURAL HEALTH CARE
2 PROVIDERS
3 2004 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Leonard M. Blackham
6
7 LONG TITLE
8 General Description:
9 This bill imposes penalties on a health maintenance organization that violates the
10 access to rural health care providers statute and makes the Public Employees Health
11 Plan subject to the access to rural health care providers statute.
12 Highlighted Provisions:
13 This bill:
14 . imposes penalties on a health maintenance organization that violates the access to
15 rural health care providers statute;
16 . gives the commissioner rulemaking authority to enforce the statute;
17 . makes the Public Employees Health Plan subject to the access to rural health care
18 provider statute; and
19 . amends the definition of independent hospital to include a critical care access
20 hospital.
21 Monies Appropriated in this Bill:
22 None
23 Other Special Clauses:
24 This bill provides an effective date.
25 Utah Code Sections Affected:

26 AMENDS:
27 31A-8-501, as last amended by Chapter 263, Laws of Utah 2001
28 49-20-407, as enacted by Chapter 220, Laws of Utah 2002
29
30 Be it enacted by the Legislature of the state of Utah:
31 Section 1. Section 31A-8-501 is amended to read:
32 31A-8-501. Access to health care providers.
33 (1) As used in this section:
34 (a) "Class of health care provider" means a health care provider or a health care facility
35 regulated by the state within the same professional, trade, occupational, or certification
36 category established under Title 58, Occupations and Professions, or within the same facility
37 licensure category established under Title 26, Chapter 21, Health Care Facility Licensing and
38 Inspection Act.
39 (b) "Covered health care services" or "covered services" means health care services for
40 which an enrollee is entitled to receive under the terms of a health maintenance organization
41 contract.
42 (c) "Credentialed staff member" means a health care provider with active staff
43 privileges at an independent hospital or federally qualified health center.
44 (d) "Federally qualified health center" means as defined in the Social Security Act, 42
45 U.S.C. Sec. 1395(x).
46 (e) "Independent hospital" means a general acute hospital or a critical care access
47 hospital that:
48 (i) is licensed pursuant to Title 26, Chapter 21, Health Care Facility Licensing and
49 Inspection Act; and
50 (ii) is controlled by a board of directors of which 51% or more reside in the county
51 where the hospital is located and:
52 (A) the board of directors is ultimately responsible for the policy and financial
53 decisions of the hospital; or
54 (B) the hospital is licensed for 60 or fewer beds and is not owned, in whole or in part,
55 by an entity that owns or controls a health maintenance organization if the hospital is a
56 contracting facility of the organization.

57 (f) "Noncontracting provider" means an independent hospital, federally qualified health
58 center, or credentialed staff member who has not contracted with a health maintenance
59 organization to provide health care services to enrollees of the organization.
60 (2) Except for a health maintenance organization which is under the common
61 ownership or control of an entity with a hospital located within ten paved road miles of an
62 independent hospital, a health maintenance organization shall pay for covered health care
63 services rendered to an enrollee by an independent hospital, a credentialed staff member at an
64 independent hospital, or a credentialed staff member at his local practice location if:
65 (a) the enrollee:
66 (i) lives or resides within 30 paved road miles of the independent hospital; or
67 (ii) if Subsection (2)(a)(i) does not apply, lives or resides in closer proximity to the
68 independent hospital than a contracting hospital;
69 (b) the independent hospital is located prior to December 31, 2000 in a county with a
70 population density of less than 100 people per square mile, or the independent hospital is
71 located in a county with a population density of less than 30 people per square mile; and
72 (c) the enrollee has complied with the prior authorization and utilization review
73 requirements otherwise required by the health maintenance organization contract.
74 (3) A health maintenance organization shall pay for covered health care services
75 rendered to an enrollee at a federally qualified health center if:
76 (a) the enrollee:
77 (i) lives or resides within 30 paved road miles of the federally qualified health center;
78 or
79 (ii) if Subsection (3)(a)(i) does not apply, lives or resides in closer proximity to the
80 federally qualified health center than a contracting provider;
81 (b) the federally qualified health center is located in a county with a population density
82 of less than 30 people per square mile; and
83 (c) the enrollee has complied with the prior authorization and utilization review
84 requirements otherwise required by the health maintenance organization contract.
85 (4) (a) A health maintenance organization shall reimburse a noncontracting provider or
86 the enrollee for covered services rendered pursuant to Subsection (2) a like dollar amount as it
87 pays to contracting providers under a noncapitated arrangement for comparable services.

88 (b) A health maintenance organization shall reimburse a federally qualified health
89 center or the enrollee for covered services rendered pursuant to Subsection (3) a like amount as
90 paid by the health maintenance organization under a noncapitated arrangement for comparable
91 services to a contracting provider in the same class of health care providers as the provider who
92 rendered the service.
93 (5) A noncontracting provider may only refer an enrollee to another noncontracting
94 provider so as to obligate the enrollee's health maintenance organization to pay for the resulting
95 services if:
96 (a) the noncontracting provider making the referral or the enrollee has received prior
97 authorization from the organization for the referral; or
98 (b) the practice location of the noncontracting provider to whom the referral is made:
99 (i) is located in a county with a population density of less than 25 people per square
100 mile; and
101 (ii) is within 30 paved road miles of:
102 (A) the place where the enrollee lives or resides; or
103 (B) the independent hospital or federally qualified health center at which the enrollee
104 may receive covered services pursuant to Subsection (2) or (3).
105 (6) Notwithstanding this section, a health maintenance organization may contract
106 directly with an independent hospital, federally qualified health center, or credentialed staff
107 member.
108 (7) (a) A health maintenance organization that violates any provision of this section is
109 subject to sanctions as determined by the commissioner in accordance with Section 31A-2-308 .
110 (b) Violations of this section include:
111 (i) failing to provide the notice required by Subsection (7)(d) by placing the notice in
112 any health maintenance organization's provider list that is supplied to enrollees, including any
113 website maintained by the health maintenance organization;
114 (ii) failing to provide notice of an enrolles's rights under this section when:
115 (A) an enrollee makes personal contact with the health maintenance organization by
116 telephone, electronic transaction, or in person; and
117 (B) the enrollee inquires about his rights to access an independent hospital or federally
118 qualified health center; and

119 (iii) refusing to reprocess or reconsider a claim, initially denied by the health
120 maintenance organization, when the provisions of this section apply to the claim.
121 (c) The commissioner shall, pursuant to Chapter 2, Part 2, Duties and Powers of the
122 Commissioner:
123 (i) adopt rules as necessary to implement this section;
124 (ii) identify in rule:
125 (A) the counties with a population density of less than 100 people per square mile;
126 (B) independent hospitals as defined in Subsection (1)(e); and
127 (C) federally qualified health centers as defined in Subsection (1)(d).
128 (d) (i) A health maintenance organization shall:
129 (A) use the information developed by the commissioner under Subsection (7)(c) to
130 identify the rural counties, independent hospitals and federally qualified health centers that are
131 located in the health maintenance organization's service area; and
132 (B) include the providers identified under Subsection (7)(d)(i)(A) in the notice required
133 in Subsection (7)(d)(ii).
134 (ii) The health maintenance organization shall provide the following notice, in bold
135 type, to enrollees as specified under Subsection (7)(b)(i), and shall keep the notice current:
136 "You may be entitled to coverage for health care services from the following non-HMO
137 contracted providers if you live or reside within 30 paved road miles of the listed providers, or
138 if you live or reside in closer proximity to the listed providers than to your HMO contracted
139 providers:
140 This list may change periodically, please check on our website or call for verification.
141 Please be advised that if you choose a noncontracted provider you will be responsible for any
142 charges not covered by your health insurance plan.
143 If you have questions concerning your rights to see a provider on this list you may
144 contact your health maintenance organization at ________. If the HMO does not resolve your
145 problem, you may contact the Office of Consumer Health Assistance in the Insurance
146 Department, toll free."
147 (e) A person whose interests are affected by an alleged violation of this section may
148 contact the Office of Consumer Health Assistance and request assistance, or file a complaint as
149 provided in Section 31A-2-216 .

150 Section 2. Section 49-20-407 is amended to read:
151 49-20-407. Insurance mandates.
152 Notwithstanding the provisions of Subsection 31A-1-103 (3)(f), health coverage offered
153 to the state employee risk pool under Subsection 49-20-202 (1)(a) shall comply with the
154 provisions of [Section] Sections 31A-8-501 and 31A-22-605.5 .
155 Section 3. Effective date.
156 This bill takes effect May 3, 2004, except that the amendments to Section 49-20-407
157 take effect on July 1, 2004.