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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
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN 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 beequal to the surplus required of the organization pursuant to subsection30(2) of this sectionnot 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 ofMarchJune, 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
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