Second Substitute H.B. 168

Representative James A. Dunnigan proposes the following substitute bill:

1 HEALTH INSURANCE MARKET CHOICES
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: James A. Dunnigan
5 Senate Sponsor: Sheldon L. Killpack
6
7 LONG TITLE
8 General Description:
9 This bill amends the Insurance Code to permit a new health insurance product offering
10 for accident and health insurers and health maintenance organizations.
11 Highlighted Provisions:
12 This bill:
13 . amends the access to rural health care provider law to prohibit balanced billing by
14 non-contracted independent hospitals;
15 . provides that a health maintenance organization that is subject to Chapter 8, Health
16 Maintenance Organizations and Limited Health Plans:
17 . shall offer at least one health benefit plan that is subject to current limitations on
18 the use of indemnity plans, point of service plans, and scope of basic health care
19 services;
20 . may offer a health benefit plan that is not subject to current limitations on the
21 use of indemnity plans, point of service plans, and scope of basic health care
22 services; and
23 . must cover emergency care services;
24 . provides that an insurer that offers a health benefit plan in the state and is not
25 subject to Chapter 8, Health Maintenance Organizations and Limited Health Plans:

26 . shall offer at least one health benefit plan that is subject to current requirements
27 for provider reimbursement levels and provider participation;
28 . may offer a health benefit plan that is not subject to current provider
29 reimbursement levels and provider participation requirements;
30 . must comply with access to rural health care laws; and
31 . must cover emergency care services.
32 Monies Appropriated in this Bill:
33 None
34 Other Special Clauses:
35 None
36 Utah Code Sections Affected:
37 AMENDS:
38 31A-8-501, as last amended by Laws of Utah 2004, Chapters 90, 229, and 367
39 ENACTS:
40 31A-22-618.5, Utah Code Annotated 1953
41
42 Be it enacted by the Legislature of the state of Utah:
43 Section 1. Section 31A-8-501 is amended to read:
44 31A-8-501. Access to health care providers.
45 (1) As used in this section:
46 (a) "Class of health care provider" means a health care provider or a health care facility
47 regulated by the state within the same professional, trade, occupational, or certification
48 category established under Title 58, Occupations and Professions, or within the same facility
49 licensure category established under Title 26, Chapter 21, Health Care Facility Licensing and
50 Inspection Act.
51 (b) "Covered health care services" or "covered services" means health care services for
52 which an enrollee is entitled to receive under the terms of a health maintenance organization
53 contract.
54 (c) "Credentialed staff member" means a health care provider with active staff
55 privileges at an independent hospital or federally qualified health center.
56 (d) "Federally qualified health center" means as defined in the Social Security Act, 42

57 U.S.C. Sec. 1395x.
58 (e) "Independent hospital" means a general acute hospital or a critical access hospital
59 that:
60 (i) is either:
61 (A) located 20 miles or more from any other general acute hospital or critical access
62 hospital; or
63 (B) licensed as of January 1, 2004;
64 (ii) is licensed pursuant to Title 26, Chapter 21, Health Care Facility Licensing and
65 Inspection Act; and
66 (iii) is controlled by a board of directors of which 51% or more reside in the county
67 where the hospital is located and:
68 (A) the board of directors is ultimately responsible for the policy and financial
69 decisions of the hospital; or
70 (B) the hospital is licensed for 60 or fewer beds and is not owned, in whole or in part,
71 by an entity that owns or controls a health maintenance organization if the hospital is a
72 contracting facility of the organization.
73 (f) "Noncontracting provider" means an independent hospital, federally qualified health
74 center, or credentialed staff member who has not contracted with a health maintenance
75 organization to provide health care services to enrollees of the organization.
76 (2) Except for a health maintenance organization which is under the common
77 ownership or control of an entity with a hospital located within ten paved road miles of an
78 independent hospital, a health maintenance organization shall pay for covered health care
79 services rendered to an enrollee by an independent hospital, a credentialed staff member at an
80 independent hospital, or a credentialed staff member at his local practice location if:
81 (a) the enrollee:
82 (i) lives or resides within 30 paved road miles of the independent hospital; or
83 (ii) if Subsection (2)(a)(i) does not apply, lives or resides in closer proximity to the
84 independent hospital than a contracting hospital;
85 (b) the independent hospital is located prior to December 31, 2000 in a county with a
86 population density of less than 100 people per square mile, or the independent hospital is
87 located in a county with a population density of less than 30 people per square mile; and

88 (c) the enrollee has complied with the prior authorization and utilization review
89 requirements otherwise required by the health maintenance organization contract.
90 (3) A health maintenance organization shall pay for covered health care services
91 rendered to an enrollee at a federally qualified health center if:
92 (a) the enrollee:
93 (i) lives or resides within 30 paved road miles of the federally qualified health center;
94 or
95 (ii) if Subsection (3)(a)(i) does not apply, lives or resides in closer proximity to the
96 federally qualified health center than a contracting provider;
97 (b) the federally qualified health center is located in a county with a population density
98 of less than 30 people per square mile; and
99 (c) the enrollee has complied with the prior authorization and utilization review
100 requirements otherwise required by the health maintenance organization contract.
101 (4) (a) A health maintenance organization shall reimburse a noncontracting provider or
102 the enrollee for covered services rendered pursuant to Subsection (2) a like dollar amount as it
103 pays to contracting providers under a noncapitated arrangement for comparable services.
104 (b) A health maintenance organization shall reimburse a federally qualified health
105 center or the enrollee for covered services rendered pursuant to Subsection (3) a like amount as
106 paid by the health maintenance organization under a noncapitated arrangement for comparable
107 services to a contracting provider in the same class of health care providers as the provider who
108 rendered the service.
109 (5) (a) A non-contracting independent hospital may not balance bill a patient when the
110 health maintenance organization reimburses a non-contracting independent hospital or an
111 enrollee in accordance with Subsection (4)(a).
112 (b) A non-contracting federally qualified health center may not balance bill a patient
113 when the federally qualified health center or the enrollee receives reimbursement in accordance
114 with Subsection (4)(b).
115 [(5)] (6) A noncontracting provider may only refer an enrollee to another
116 noncontracting provider so as to obligate the enrollee's health maintenance organization to pay
117 for the resulting services if:
118 (a) the noncontracting provider making the referral or the enrollee has received prior

119 authorization from the organization for the referral; or
120 (b) the practice location of the noncontracting provider to whom the referral is made:
121 (i) is located in a county with a population density of less than 25 people per square
122 mile; and
123 (ii) is within 30 paved road miles of:
124 (A) the place where the enrollee lives or resides; or
125 (B) the independent hospital or federally qualified health center at which the enrollee
126 may receive covered services pursuant to Subsection (2) or (3).
127 [(6)] (7) Notwithstanding this section, a health maintenance organization may contract
128 directly with an independent hospital, federally qualified health center, or credentialed staff
129 member.
130 [(7)] (8) (a) A health maintenance organization that violates any provision of this
131 section is subject to sanctions as determined by the commissioner in accordance with Section
132 31A-2-308 .
133 (b) Violations of this section include:
134 (i) failing to provide the notice required by Subsection [(7)] (8)(d) by placing the notice
135 in any health maintenance organization's provider list that is supplied to enrollees, including
136 any website maintained by the health maintenance organization;
137 (ii) failing to provide notice of an enrolles's rights under this section when:
138 (A) an enrollee makes personal contact with the health maintenance organization by
139 telephone, electronic transaction, or in person; and
140 (B) the enrollee inquires about his rights to access an independent hospital or federally
141 qualified health center; and
142 (iii) refusing to reprocess or reconsider a claim, initially denied by the health
143 maintenance organization, when the provisions of this section apply to the claim.
144 (c) The commissioner shall, pursuant to Chapter 2, Part 2, Duties and Powers of
145 Commissioner:
146 (i) adopt rules as necessary to implement this section;
147 (ii) identify in rule:
148 (A) the counties with a population density of less than 100 people per square mile;
149 (B) independent hospitals as defined in Subsection (1)(e); and

150 (C) federally qualified health centers as defined in Subsection (1)(d).
151 (d) (i) A health maintenance organization shall:
152 (A) use the information developed by the commissioner under Subsection [(7)] (8)(c)
153 to identify the rural counties, independent hospitals, and federally qualified health centers that
154 are located in the health maintenance organization's service area; and
155 (B) include the providers identified under Subsection [(7)] (8)(d)(i)(A) in the notice
156 required in Subsection [(7)] (8)(d)(ii).
157 (ii) The health maintenance organization shall provide the following notice, in bold
158 type, to enrollees as specified under Subsection [(7)] (8)(b)(i), and shall keep the notice
159 current:
160 "You may be entitled to coverage for health care services from the following non-HMO
161 contracted providers if you live or reside within 30 paved road miles of the listed providers, or
162 if you live or reside in closer proximity to the listed providers than to your HMO contracted
163 providers:
164 This list may change periodically, please check on our website or call for verification.
165 Please be advised that if you choose a [noncontracted] non-contracted provider you will be
166 responsible for any charges not covered by your health insurance plan.
167 If you have questions concerning your rights to see a provider on this list you may
168 contact your health maintenance organization at ________. If the HMO does not resolve your
169 problem, you may contact the Office of Consumer Health Assistance in the Insurance
170 Department, toll free."
171 (e) A person whose interests are affected by an alleged violation of this section may
172 contact the Office of Consumer Health Assistance and request assistance, or file a complaint as
173 provided in Section 31A-2-216 .
174 Section 2. Section 31A-22-618.5 is enacted to read:
175 31A-22-618.5. Health plan offerings.
176 (1) The purpose of this section is to increase the range of health benefit plans available
177 in the market.
178 (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
179 Organizations and Limited Health Plans:
180 (a) shall offer to potential purchasers at least one health benefit plan that is subject to

181 the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
182 and
183 (b) may offer to potential purchasers one or more health benefit plans or limited health
184 benefit plans that:
185 (i) are not subject to one or more of the following:
186 (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
187 (B) the limitation on point of service products in Subsections 31A-8-408 (3) through
188 (6); or
189 (C) except as provided in Subsection (2)(a)(ii), basic health care services as defined in
190 Section 31A-8-101 ; and
191 (ii) when offering a health plan under this section provide coverage for emergency care
192 services as required by Section 31A-22-627 as follows:
193 (A) within the organization's service area, emergency care services shall include
194 covered health care services from non-affiliated providers only when delay in receiving care
195 from an affiliated provider could reasonably be expected to cause severe jeopardy to the
196 enrollee's condition; and
197 (B) outside the organization's service area, emergency care services shall include
198 medically necessary health care services that are immediately required because of unforseen
199 illness or injury while the enrollee is outside the geographic limits of the organization's service
200 area.
201 (3) An insurer that offers health benefit plans and is not subject to Chapter 8, Health
202 Maintenance Organizations and Limited Health Plans:
203 (a) shall offer to potential purchasers at least one health benefit plan that is subject to
204 Sections 31A-22-617 and 31A-22-618 ; and
205 (b) may offer to potential purchasers one or more health benefit plans that:
206 (i) are not subject to one or more of the following:
207 (A) Subsection 31A-22-617 (2);
208 (B) Subsection 31A-22-617 (7); or
209 (C) notwithstanding Subsection 31A-22-617 (9), Section 31A-22-618 ; and
210 (ii) (A) are subject to Section 31A-8-501 ; and
211 (B) when offering a health plan under this section shall provide coverage of emergency

212 care services as required by Section 31A-22-627 by providing coverage in accordance with
213 Subsection 31A-22-617 (2).
214 (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
215 Subsection (2)(b).
216 (5) (a) Any difference in price between a health benefit plan offered under Subsections
217 (2)(a) and (b):
218 (i) shall be based on actuarially sound data; and
219 (ii) is subject to Subsection 31A-30-106 (1)(f)(ii)(B).
220 (b) Any difference in price between a health benefit plan offered under Subsections
221 (3)(a) and (b):
222 (i) shall be based on actuarially sound data; and
223 (ii) is subject to Subsection 31A-30-106 (1)(f)(ii)(B).
224 (6) Nothing in this section limits the number of health benefit plans that an insurer may
225 offer.