Section 500.3533 - Prudent purchaser contracts; reimbursement for unauthorized services or services by nonaffiliated providers; rate and operating requirements; maintenance of financial records by hea
THE INSURANCE CODE OF 1956 (EXCERPT)
Act 218 of 1956
500.3533 Prudent purchaser contracts; reimbursement for unauthorized services or services by nonaffiliated providers; rate and operating requirements; maintenance of financial records by health maintenance organization.
Sec. 3533.
(1) A health maintenance organization may offer prudent purchaser contracts to groups or individuals and in conjunction with those contracts a health maintenance organization may pay or may reimburse enrollees, or may contract with another entity to pay or reimburse enrollees, for unauthorized services or for services by nonaffiliated providers in accordance with the terms of the contract and subject to copayments, coinsurances, deductibles, or other financial penalties designed to encourage enrollees to obtain services from the organization's providers.
(2) Prudent purchaser contracts and the rates charged for them are subject to the same regulatory requirements as health maintenance contracts. The rates charged by an organization for coverage under contracts issued under this section shall not be unreasonably lower than what is necessary to meet the expenses of the organization for providing this coverage and shall not have an anticompetitive effect or result in predatory pricing in relation to prudent purchaser agreement coverages offered by other organizations.
(3) A health maintenance organization shall not issue prudent purchaser contracts unless it is in full compliance with the requirements for adequate working capital, statutory deposits, and reserves as provided in this chapter and it is not operating under any limitation to its authorization to do business in this state.
(4) A health maintenance organization shall maintain financial records for its prudent purchaser contracts and activities in a form separate or separable from the financial records of other operations and activities carried on by the organization.
History: Add. 2000, Act 252, Imd. Eff. June 29, 2000 ;-- Am. 2005, Act 306, Imd. Eff. Dec. 21, 2005
Popular Name: Act 218
Popular Name: HMO