2008 Legislation
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HOUSE BILL NO. 412<br /> – Managed care plan, deposits/reports

HOUSE BILL NO. 412

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Bill Status



H0412...........................................................by BUSINESS
MANAGED CARE PLANS - Amends existing law relating to managed care to revise
the deposit required of an organization offering a limited managed care
plan; to revise a due date for filing an annual report to the director of
the Department of Insurance; to revise a requirement for certain
information submitted to the Department of Insurance; and to revise a
provision relating to grievance procedures.

01/24    House intro - 1st rdg - to printing
01/25    Rpt prt - to Bus
02/22    Rpt out - rec d/p - to 2nd rdg
02/25    2nd rdg - to 3rd rdg
02/26    3rd rdg - PASSED - 67-0-3
      AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Bilbao, Black,
      Block, Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon,
      Chavez, Chew, Collins, Crane, Durst, Eskridge, Hagedorn, Hart,
      Harwood, Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador,
      LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer,
      Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ringo,
      Roberts, Ruchti, Rusche, Sayler, Schaefer, Shepherd(02),
      Shepherd(08), Shirley, Shively, Smith(24), Smith(30)(Stanek),
      Snodgrass, Stevenson, Thayn, Thomas, Trail, Vander Woude, Wills,
      Wood(27), Wood(35), Mr. Speaker
      NAYS -- None
      Absent and excused -- Clark, Lake, Patrick
    Floor Sponsor - Crane
    Title apvd - to Senate
02/27    Senate intro - 1st rdg - to Com/HuRes
03/12    Rpt out - rec d/p - to 2nd rdg
03/13    2nd rdg - to 3rd rdg
03/14    3rd rdg - PASSED - 33-0-2
      AYES -- Andreason, Bair, Bastian, Broadsword, Burkett, Cameron,
      Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes, Goedde,
      Hammond, Heinrich, Hill, Kelly, Keough, Langhorst, Little, Lodge,
      Malepeai(Sagness), McGee, McKague, McKenzie, Pearce, Richardson,
      Schroeder, Siddoway, Stegner, Stennett, Werk
      NAYS -- None
      Absent and excused -- Bilyeu, Jorgenson
    Floor Sponsor - Andreason
    Title apvd - to House
03/17    To enrol - Rpt enrol - Sp signed
03/18    Pres signed - To Governor
03/19    Governor signed
         Session Law Chapter 203
         Effective: 07/01/08

Bill Text




                                                                       
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008

                                                                       

                              IN THE HOUSE OF REPRESENTATIVES

                                     HOUSE BILL NO. 412

                                   BY BUSINESS COMMITTEE

  1                                        AN ACT
  2    RELATING TO MANAGED CARE; AMENDING SECTION 41-3905, IDAHO CODE, TO REVISE  THE
  3        DEPOSIT  REQUIRED OF AN ORGANIZATION OFFERING A LIMITED MANAGED CARE PLAN;
  4        AMENDING SECTION 41-3910, IDAHO CODE, TO REVISE THE ANNUAL FILING DATE  OF
  5        A  REPORT  SHOWING  A MANAGED CARE ORGANIZATION'S AUDITED FINANCIAL CONDI-
  6        TION; AMENDING SECTION  41-3914,  IDAHO  CODE,  TO  REVISE  A  REQUIREMENT
  7        RELATED  TO  ANNUAL  DISCLOSURES FURNISHED TO THE DEPARTMENT OF INSURANCE;
  8        AMENDING SECTION 41-3918, IDAHO CODE, TO REVISE A PROVISION RELATED TO THE
  9        REVIEW AND APPROVAL OF GRIEVANCE PROCEDURES BY MEMBER  REPRESENTATIVES  OF
 10        MANAGED CARE ORGANIZATIONS AND TO DELETE A CODE REFERENCE.

 11    Be It Enacted by the Legislature of the State of Idaho:

 12        SECTION  1.  That  Section 41-3905, Idaho Code, be, and the same is hereby
 13    amended to read as follows:

 14        41-3905.  QUALIFICATIONS FOR CERTIFICATE OF AUTHORITY. The director  shall
 15    not  issue or permit to remain in force a certificate of authority authorizing
 16    the transaction of managed care plans unless  the  organization  offering  the
 17    managed care plan is qualified therefor as follows:
 18        (1)  It  must be empowered to engage in business as a managed care organi-
 19    zation under its articles or certificate of incorporation, or of  association,
 20    or  partnership agreement, or other basic organizational document, as the case
 21    may be.
 22        (2)  It must be financially responsible, and have such funds and financial
 23    resources as may reasonably be expected to enable it to  fulfill  its  obliga-
 24    tions  to  its  members.  An organization offering a general managed care plan
 25    must comply with the capital and surplus requirements of a disability  insurer
 26    under  the provisions of section 41-313, Idaho Code. The director shall deter-
 27    mine the surplus required of an organization offering a limited  managed  care
 28    plan, which shall be not less than twenty-five  thousand  dollars ($25,000) or
 29    such  increased  amount  as  the director may find reasonably necessary by the
 30    scope of the organization's proposed operations. As to financial resources  of
 31    an  organization  offering a limited managed care plan the director may, among
 32    other relevant factors, also consider:
 33        (a)  Any agreements with an  insurer,  professional  service  corporation,
 34        governmental  agency,  or  other  responsible  organization to underwrite,
 35        insure payment for or provide the proposed services;
 36        (b)  Agreements with providers for the provision  of   the  proposed  ser-
 37        vices;
 38        (c)  Arrangements  for  liability  insurance, or an adequate plan of self-
 39        insurance, as to claims for loss or injury arising  out  of  managed  care
 40        operations;
 41        (d)  Reinsurance agreements; and
 42        (e)  Deposit requirements under subsection (7) of this section.
 43        (3)  It  must  propose  to provide health care services on a predetermined

                                       2

  1    and prepaid basis and indemnity benefits covering all or a portion of the cost
  2    of out-of-area services, out-of-network services and emergency services;  pro-
  3    vided,  however,  that except for care provided by primary care providers, who
  4    shall include at  least  those  categories  of  providers  listed  in  section
  5    41-3915(2)(e),  Idaho Code, a managed care organization may require a determi-
  6    nation that a member needs care from a category of provider not listed in sec-
  7    tion 41-3915(2)(e), Idaho Code, before  a  member  may  access  out-of-network
  8    nonemergency  care from a provider  not listed in section 41-3915(2)(e), Idaho
  9    Code.
 10        (4)  It must have the intent to render and  capability  for  rendering  or
 11    providing  coverage  for  good quality health care services, which will be and
 12    are readily available and accessible to members in  each  geographic  area  in
 13    which it proposes to operate or operates, and such services must be reasonably
 14    responsive to the needs of members.
 15        (5)  Its  procedures  for  offering health care services, and for offering
 16    and terminating health care contracts, must be reasonable and equitable.
 17        (6)  It must propose to establish, and after authorization in fact  estab-
 18    lish and maintain, reasonable and adequate procedures to:
 19        (a)  Monitor  the  quality of health care provided, including a reasonable
 20        system of internal peer review of  diagnosis  and  treatment  of  members'
 21        health conditions;
 22        (b)  Resolve  grievances of members, as required by section 41-3918, Idaho
 23        Code; and
 24        (c)  Provide members with an opportunity to participate in matters of pol-
 25        icy and operation as required by section 41-3916, Idaho Code.
 26        (7)  It must comply with the deposit requirements  of  section  41-316  or
 27    41-316A,  Idaho  Code, as applicable; provided however, that the amount of the
 28    deposit required of an organization offering a limited managed care plan shall
 29    be equal to the surplus required of the organization  pursuant  to  subsection
 30    (2)  of  this  section not less than twenty-five thousand dollars ($25,000) or
 31    such increased amount as the director may find  reasonably  necessary  by  the
 32    scope of the organization's proposed operations.
 33        (8)  Notwithstanding  anything to the contrary in this chapter, the direc-
 34    tor may allow a period of up to three (3) years following the  issuance  of  a
 35    certificate  of  authority  to a managed care organization after the effective
 36    date of this act to comply with the capital, surplus and deposit  requirements
 37    of this chapter. The director shall establish minimum initial amounts and min-
 38    imum  increases  in  capital, surplus and deposits for such certificate holder
 39    based upon the number of enrolled members in its managed care  plans.  If  the
 40    certificate  holder fails to meet the capital, surplus or deposit requirements
 41    within the time herein allowed, the organization shall no longer be authorized
 42    to offer managed care plans on a  predetermined  and  prepaid  basis  in  this
 43    state.  If the organization fails to meet the minimum increases established by
 44    the director, the organization shall cease to market  its  plans  upon  notice
 45    from the director.
 46        (9)  Notwithstanding  anything  to the contrary in this chapter, a managed
 47    care organization holding a valid Idaho certificate of authority  to  transact
 48    insurance as a health maintenance organization on or before the effective date
 49    of  this  act  may  have up to three (3) years from and after that date within
 50    which to comply with the increases in capital, surplus  and  deposit  require-
 51    ments  imposed by this act.  The director shall establish minimum increases in
 52    capital, surplus and deposits for the certificate holder based upon the number
 53    of enrolled members in its managed care plans. If the certificate holder fails
 54    to meet the capital, surplus or deposit requirements within  the  time  herein
 55    allowed,  the organization shall no longer be authorized to offer managed care

                                       3

  1    plans on a predetermined and prepaid basis in this state.  If the organization
  2    fails to meet the minimum increases established by the director, the organiza-
  3    tion shall cease to market its plans upon notice from the director.

  4        SECTION 2.  That Section 41-3910, Idaho Code, be, and the same  is  hereby
  5    amended to read as follows:

  6        41-3910.  REPORTS  TO  THE  DIRECTOR.  (1) Every managed care organization
  7    offering a managed care plan for which a certificate of authority is  required
  8    shall  annually,  on or before the first day of March June, file a report with
  9    the director showing its audited financial condition on the last  day  of  the
 10    preceding  December.  The  report shall be on forms prescribed by the director
 11    and shall be verified by an appropriate officer of the organization.
 12        (2)  Such report shall include:
 13        (a)  A financial statement of  the  organization,  including  its  balance
 14        sheet and statement of income and expenditures for the preceding year cer-
 15        tified by an independent public accountant;
 16        (b)  Any  changes  in  the  information  submitted  in connection with its
 17        application for certificate of authority;
 18        (c)  Such other information as is available to the  managed care organiza-
 19        tion relating to the operations of the organization as  the  director  may
 20        require by rule to enable him to carry out his duties under this chapter.

 21        SECTION  3.  That  Section 41-3914, Idaho Code, be, and the same is hereby
 22    amended to read as follows:

 23        41-3914.  ANNUAL DISCLOSURES. (1) Every managed  care  organization  shall
 24    provide to its enrollees and make available for inspection by the general pub-
 25    lic on an annual basis:
 26        (a)  an audited statement of financial condition including a balance sheet
 27        and a summary of receipts and disbursements;
 28        (b)  a  description  of  the  accessibility  and availability of services,
 29        including a list of the providers currently participating in  the  managed
 30        care  plan  and  of  the  providers  who  are  accepting new patients, the
 31        addresses of primary care physicians and participating hospitals  and  the
 32        specialty  of  each  physician  and  category  of  the other participating
 33        providers;
 34        (c)  a statement as to whether the plan includes a  limited  formulary  of
 35        medications, and  a statement that the formulary will be made available to
 36        any prospective member or member upon request;
 37        (d)  a   clear   and   understandable  description  of  the  managed  care
 38        organization's method of resolving member grievances;
 39        (e)  a description of how the qualifications  of  participating  providers
 40        may be obtained;
 41        (f)  such other information as the director may by rule prescribe.
 42        (2)  In  addition  to matters specified in subsection (1) of this section,
 43    each managed care organization shall make available for  public  inspection  a
 44    description  of  the benefit package or packages offered to each class of mem-
 45    bers and their rates. Such information shall be presented in clear,  readable,
 46    and  concise form and shall include, at a minimum, a description of all of the
 47    material elements required of health care contracts.
 48        (3)  A managed care organization for which a certificate of  authority  is
 49    required  shall furnish a copy of the information required by this section  to
 50    the department upon request of the director.

                                       4

  1        SECTION 4.  That Section 41-3918, Idaho Code, be, and the same  is  hereby
  2    amended to read as follows:

  3        41-3918.  GRIEVANCE  SYSTEM.  (1)  Every   managed care organization shall
  4    establish a grievance system to resolve grievances initiated by  members  con-
  5    cerning  health  care services. The system shall provide reasonable procedures
  6    for the resolution of grievances, and shall include an appeals  process  which
  7    affords  the  member the right to a prompt review  by a grievance panel before
  8    whom the member has the right either to appear or be heard, or both. A managed
  9    care organization offering a managed care plan  for  which  a  certificate  of
 10    authority is required shall have its grievance system approved by the director
 11    and  shall submit to the director an annual report in a form prescribed by the
 12    director which shall include:
 13        (a)  A description of the procedures of the grievance system; and
 14        (b)  The total number of grievances handled through the grievance   system
 15        and a compilation of causes underlying the grievances filed.
 16        (2)  Every  managed care organization shall maintain records of grievances
 17    filed with it concerning health care services and each managed care  organiza-
 18    tion  for  which  a  certificate  of authority is required shall submit to the
 19    director a summary report at such times and in such form as the  director  may
 20    require.  Grievances involving other persons shall be referred to such persons
 21    with a copy to the director.
 22        (3)  The director may examine a grievance system of a managed care organi-
 23    zation for which a certificate of authority is required, subject to the  limi-
 24    tations  concerning  health  records  of  individuals  set  forth  in  section
 25    41-3909(3), Idaho Code.
 26        (4)  Every  managed  care organization must show evidence that such griev-
 27    ance procedures have been reviewed and approved by the member  representatives
 28    through  their participation on advisory panels or other reasonable mechanisms
 29    as set forth in section 41-3916(2), Idaho Code.

Statement of Purpose / Fiscal Impact


                     STATEMENT OF PURPOSE

                           RS 17362

This proposal updates and makes technical corrections to Chapter 
39 of Title 41, Idaho Code, to simplify some of the requirements 
applicable to managed care organizations.  The changes include: 
allowing the Director to set deposit requirements for limited 
managed care organizations that have flexible reserve 
requirements, changing filing dates for audited financial 
reports to coincide with other insurers, and modifying filing 
requirements related to annual disclosure requirements.  These 
changes will eliminate some requirements that the Department 
views as unnecessary, and simplify other requirements.


                          FISCAL NOTE

No Fiscal Impact.




CONTACT
Name:	Martha Smith
Agency:	Insurance, Dept. of
Phone:	334-4315


STATEMENT OF PURPOSE/FISCAL NOTE	                   H 412