31A-27a-403 - Continuance of coverage -- Health maintenance organizations.
31A-27a-403. Continuance of coverage -- Health maintenance organizations.
(1) As used in this section:
(a) "Basic health care services" is as defined in Section 31A-8-101.
(b) "Enrollee" is as defined in Section 31A-8-101.
(c) "Health care" is as defined in Section 31A-1-301.
(d) "Health maintenance organization" is as defined in Section 31A-8-101.
(e) "Limited health plan" is as defined in Section 31A-8-101.
(f) (i) "Managed care organization" means an entity licensed by, or holding a certificateof authority from, the department to furnish health care services or health insurance.
(ii) "Managed care organization" includes:
(A) a limited health plan;
(B) a health maintenance organization;
(C) a preferred provider organization;
(D) a fraternal benefit society; or
(E) an entity similar to an entity described in Subsections (1)(f)(ii)(A) through (D).
(iii) "Managed care organization" does not include:
(A) an insurer or other person that is eligible for membership in a guaranty associationunder Chapter 28, Guaranty Associations;
(B) a mandatory state pooling plan;
(C) a mutual assessment company or an entity that operates on an assessment basis; or
(D) an entity similar to an entity described in Subsections (1)(f)(iii)(A) through (C).
(g) "Participating provider" means a provider who, under a contract with a managed careorganization authorized under Section 31A-8-407, agrees to provide health care services toenrollees with an expectation of receiving payment:
(i) directly or indirectly, from the managed care organization; and
(ii) other than a copayment.
(h) "Participating provider contract" means the agreement between a participatingprovider and a managed care organization authorized under Section 31A-8-407.
(i) "Preferred provider" means a provider who agrees to provide health care servicesunder an agreement authorized under Subsection 31A-22-617(1).
(j) "Preferred provider contract" means the written agreement between a preferredprovider and a managed care organization authorized under Subsection 31A-22-617(1).
(k) (i) Except as provided in Subsection (1)(k)(ii), "preferred provider organization"means a person that:
(A) furnishes at a minimum, through a preferred provider, basic health care services to anenrollee in return for prepaid periodic payments in an amount agreed to before the time duringwhich the health care may be furnished;
(B) is obligated to the enrollee to arrange for the services described in Subsection(1)(k)(i)(A); and
(C) permits the enrollee to obtain health care services from a provider who is not apreferred provider.
(ii) "Preferred provider organization" does not include:
(A) an insurer licensed under Chapter 7, Nonprofit Health Service InsuranceCorporations; or
(B) an individual who contracts to render professional or personal services that the
individual performs.
(l) "Provider" is as defined in Section 31A-8-101.
(m) "Uncovered expenditure" means a cost of health care services that is covered by anorganization for which an enrollee is liable in the event of the managed care organization'sinsolvency.
(2) The rehabilitator or liquidator may take one or more of the actions described inSubsections (2)(a) through (g) to assure continuation of health care coverage for enrollees of aninsolvent managed care organization.
(a) (i) Subject to Subsection (2)(a)(ii), a rehabilitator or liquidator may require aparticipating provider or preferred provider to continue to provide the health care services theprovider is required to provide under the provider's participating provider contract or preferredprovider contract until the earlier of:
(A) 90 days after the day on which the following is filed:
(I) a petition for rehabilitation; or
(II) a petition for liquidation; or
(B) the day on which the term of the contract ends.
(ii) A requirement by the rehabilitator or liquidator under Subsection (2)(a)(i) that aparticipating provider or preferred provider continue to provide health care services under theprovider's participating provider contract or preferred provider contract expires when health carecoverage for all enrollees of the insolvent managed care organization is obtained from anothermanaged care organization or insurer.
(b) (i) Subject to Subsection (2)(b)(ii), a rehabilitator or liquidator may reduce the fees aparticipating provider or preferred provider is otherwise entitled to receive from the managedcare organization under the provider's participating provider contract or preferred providercontract during the time period in Subsection (2)(a)(i).
(ii) Notwithstanding Subsection (2)(b)(i), a rehabilitator or liquidator may not reduce afee to less than 75% of the regular fee set forth in the provider's participating provider contract orpreferred provider contract.
(iii) An enrollee shall continue to pay the same copayments, deductibles, and otherpayments for services received from a participating provider or preferred provider that theenrollee is required to pay before the day on which the following is filed:
(A) the petition for rehabilitation; or
(B) the petition for liquidation.
(c) A participating provider or preferred provider shall:
(i) accept the amounts specified in Subsection (2)(b) as payment in full; and
(ii) relinquish the right to collect additional amounts from the insolvent managed careorganization's enrollee.
(d) Subsections (2)(b) and (c) apply to the fees paid to a provider who agrees to providehealth care services to an enrollee but is not a preferred or participating provider.
(e) If the managed care organization is a health maintenance organization, Subsections(2)(e)(i) through (vi) apply.
(i) A solvent health maintenance organization licensed under Chapter 8, HealthMaintenance Organizations and Limited Health Plans, shall extend to the enrollees of aninsolvent health maintenance organization all rights, privileges, and obligations of being anenrollee in the accepting health maintenance organization:
(A) subject to Subsections (2)(e)(ii), (iii), and (v);
(B) upon notification from and subject to the direction of the rehabilitator or liquidator ofan insolvent health maintenance organization licensed under Chapter 8, Health MaintenanceOrganizations and Limited Health Plans; and
(C) if the solvent health maintenance organization operates within a portion of theinsolvent health maintenance organization's service area.
(ii) Notwithstanding Subsection (2)(e)(i), the accepting health maintenance organizationshall give credit to an enrollee for any waiting period already satisfied under the enrollee'scontract with the insolvent health maintenance organization.
(iii) A health maintenance organization accepting an enrollee of an insolvent healthmaintenance organization under Subsection (2)(e)(i) shall charge the enrollee the premiumsapplicable to the existing business of the accepting health maintenance organization.
(iv) A health maintenance organization's obligation to accept an enrollee underSubsection (2)(e)(i) is limited in number to the accepting health maintenance organization's prorata share of all health maintenance organization enrollees in this state, as determined afterexcluding the enrollees of the insolvent insurer.
(v) (A) The rehabilitator or liquidator of an insolvent health maintenance organizationshall take those measures that are possible to ensure that no health maintenance organization isrequired to accept more than its pro rata share of the adverse risk represented by the enrollees ofthe insolvent health maintenance organization.
(B) If the methodology used by the rehabilitator or liquidator to assign an enrollee is onethat can be expected to produce a reasonably equitable distribution of adverse risk, thatmethodology and its results are acceptable under this Subsection (2)(e)(v).
(vi) (A) Notwithstanding Section 31A-27a-402, the rehabilitator or liquidator mayrequire all solvent health maintenance organizations to pay for the covered claims incurred by theenrollees of the insolvent health maintenance organization.
(B) As determined by the rehabilitator or liquidator, payments required under thisSubsection (2)(e)(vi) may:
(I) begin as of the day on which the following is filed:
(Aa) the petition for rehabilitation; or
(Bb) the petition for liquidation; and
(II) continue for a maximum period through the time all enrollees are assigned pursuantto this section.
(C) If the rehabilitator or liquidator makes an assessment under this Subsection(2)(e)(vi), the rehabilitator or liquidator shall assess each solvent health maintenanceorganization its pro rata share of the total assessment based upon its premiums from the previouscalendar year.
(D) (I) A solvent health maintenance organization required to pay for covered claimsunder this Subsection (2)(e)(vi) may file a claim against the estate of the insolvent healthmaintenance organization.
(II) Any claim described in Subsection (2)(e)(vi)(D)(I), if allowed by the rehabilitator orliquidator, shall share in any distributions from the estate of the insolvent health maintenanceorganization as a Class 3 claim.
(f) (i) A rehabilitator or liquidator may transfer, through sale or otherwise, the group andindividual health care obligations of the insolvent managed care organization to one or more
other managed care organizations or other insurers, if those other managed care organizationsand other insurers:
(A) are licensed to provide the same health care services in this state that are held by theinsolvent managed care organization; or
(B) have a certificate of authority to provide the same health care services in this statethat is held by the insolvent managed care organization.
(ii) The rehabilitator or liquidator may combine group and individual health careobligations of the insolvent managed care organization in any manner the rehabilitator orliquidator considers best to provide for continuous health care coverage for the maximumnumber of enrollees of the insolvent managed care organization.
(iii) If the terms of a proposed transfer of the same combination of group and individualpolicy obligations to more than one other managed care organization or insurer are otherwiseequal, the rehabilitator or liquidator shall give preference to the transfer of the group andindividual policy obligations of an insolvent managed care organization as follows:
(A) from one category of managed care organization to another managed careorganization of the same category, as follows:
(I) from a limited health plan to a limited health plan;
(II) from a health maintenance organization to a health maintenance organization;
(III) from a preferred provider organization to a preferred provider organization;
(IV) from a fraternal benefit society to a fraternal benefit society; and
(V) from an entity similar to an entity described in this Subsection (2)(f)(iii)(A) to acategory that is similar;
(B) from one category of managed care organization to another managed careorganization, regardless of the category of the transferee managed care organization; and
(C) from a managed care organization to a nonmanaged care provider of health carecoverage, including insurers.
(g) If an insolvent managed care organization has required surplus, a rehabilitator orliquidator may use the insolvent managed care organization's required surplus to continue toprovide coverage for the insolvent managed care organization's enrollees, including payinguncovered expenditures.
Enacted by Chapter 309, 2007 General Session