Insurance, Administration

Rule R590-76

Health Maintenance Organizations and Limited Health Plans

Notice of Proposed Rule

(Amendment)

DAR File No.: 33018
Filed: 10/01/2009 05:58:22 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is being changed at the request of the insurance industry.

Summary of the rule or change:

The changes allow Health Maintenance Organizations (HMOs) to offer stand-alone dental and vision products with a closed HMO panel. The change will allow a great variety of plans to be offered in the marketplace thus providing more choices for consumers.

State statutory or constitutional authorization for this rule:

• Title 31A, Chapter 8

Anticipated cost or savings to:

the state budget:

The changes to this rule will not increase the revenue into the department or the state. Utah currently has nine HMOs. The Division does not know how many will develop stand-alone vision and dental plan but at least two or three will and possibly more. This will require them to file with the department new policy and rate forms for each new product they produce. This will increase the department's workload but the insurer will not be required to pay the department for the filing.

local governments:

Local governments will not be affected by these changes since they deal solely with the relationship between the department and their health insurance licensees.

small businesses:

Most of these HMOs would be considered small businesses. Several of the HMOs are run by their parent companies, which are large employers. There are at least two ways an HMO will be impacted by the changes to this rule. First, if an HMO decides to sell these stand-alone dental and vision plans they will be required to file them electronically with the state. Each filing packet will cost them $15. Adding to their product line may also increase their business which would increase their revenue stream up front. How many HMOs will produce and sell these new plans is not known at this time. Currently there are nine HMOs in Utah.

persons other than small businesses, businesses, or local governmental entities:

Consumers will have an additional option when they purchase insurance. They can either purchase the dental and vision plans in a package with their HMO plan or separately as a stand-alone plan.

Compliance costs for affected persons:

There are at least two ways an HMO will be impacted by the changes to this rule. First, if an HMO decides to sell these stand-alone dental and vision plans they will be required to file them electronically with the state. Each filing packet will cost them $15. Adding to their product line may also increase their business which would increase their revenue stream up front. How many HMOs will produce and sell these new plans is not known at this time. Currently there are nine HMOs in Utah.

Comments by the department head on the fiscal impact the rule may have on businesses:

The fiscal impact resulting from these changes will be minimal. It will increase the number of choices consumers will have. How many of these plans will sell is unknown. It will be an additional product offered by HMOs that will give consumers more choices.

D. Kent Michie, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at jwhitby@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

11/16/2009

This rule may become effective on:

11/23/2009

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

R590-76. Health Maintenance Organizations and Limited Health Plans.

R590-76-4. HMO Definitions.

A group or individual contract and evidence of coverage delivered or issued for delivery to any person in this state by an HMO required to obtain a certificate of authority in this state shall contain definitions respecting the matters set forth below. The definitions shall comply with the requirements of this section. Definitions other than those set forth in this regulation may be used as appropriate providing that they do not contradict these requirements. As used in this regulation and as used in the group or individual contract and evidence of coverage:

(1) "Coinsurance" is the enrollee's cost-sharing amount expressed as a percentage of covered charges.

(2) "Copayment" means, other than coinsurance, the amount an enrollee must pay in order to receive a specific service that is not fully prepaid.

(3) "Deductible" means the amount an enrollee is responsible to pay out-of-pocket before the HMO begins to pay the costs or provide the services associated with treatment.

(4) "Directors" mean the executive director of Department of Health or his authorized representative, and the director of the Health Division of the Utah Insurance Department.

(5) "Eligible dependent" means any member of an enrollee's family who meets the eligibility requirements set forth in the contract.

(6) "Emergency care services" means services for an emergency medical condition as defined in 31A-22-627(3).

(a) Within the service area, emergency care services shall include covered health care services from non-affiliated providers only when delay in receiving care from the HMO could reasonably be expected to cause severe jeopardy to the enrollee's condition.

(b) Outside the service area, emergency care services include medically necessary health care services that are immediately required because of unforeseen illness or injury while the enrollee is outside the geographical limits of the HMO's service area.

(7) "Evidence of coverage" means a certificate or a statement of the essential features and services of the HMO coverage that is given to the subscriber by the HMO or by the group contract holder.

(8) "Facility" means an institution providing health care services or a health care setting, including but not limited to hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, diagnostic, laboratory and imaging centers, and rehabilitation and other therapeutic health settings which operate within their specific licensures requirements.

(9) "Grievance" means a written complaint submitted in accordance with the HMO's formal grievance procedure by or on behalf of the enrollee regarding any aspect of the HMO relative to the enrollee.

(10) "Group contract" means a contract for health care services by which its terms limit eligibility to enrollees of a specified group.

(11) "Group contract holder" means the person to which a group contract has been issued.

(12) "Incidental coverage" means a contract or endorsement offered by an HMO that provides limited health plan benefits as defined in Subsection 31A-8-101(6)(a).

(13) "Individual contract" means a contract for health care services issued to and covering an individual. The individual contract may include coverage for dependents of the subscriber.

(14)[(13)] "Medical necessity" or "medically necessary" means:

(a) Health care services or products that a prudent health care professional would provide to a patient for the purpose of preventing, diagnosing or treating an illness, injury, disease or its symptoms in a manner that is:

(i) in accordance with generally accepted standards of medical practice in the United States;

(ii) clinically appropriate in terms of type, frequency, extent, site, and duration;

(iii) not primarily for the convenience of the patient, physician, or other health care provider; and

(iv) covered under the contract; and

(b) when a medical question-of-fact exists medical necessity shall include the most appropriate available supply or level of service for the individual in question, considering potential benefits and harms to the individual, and known to be effective.

(i) For interventions not yet in widespread use, the effectiveness shall be based on scientific evidence.

(ii) For established interventions, the effectiveness shall be based on:

(a) scientific evidence;

(b) professional standards; and

(c) expert opinion.

(15)[(14)] "Out-of-area services" means the health care services that an HMO covers when its enrollees are outside of the service area.

(16)[(15)] "Physician" means a duly licensed doctor of medicine or osteopathy practicing within the scope of the license.

(17)[(16)] "Primary care physician" means a physician who supervises, coordinates, and provides initial and basic care to enrollees, and who initiates their referral for specialist care and maintains continuity of patient care.

(18)[(17)] "Scientific evidence" means:

(a) scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff; or

(b) findings, studies or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes.

(c) Scientific evidence shall not include published peer-reviewed literature sponsored to a significant extent by a pharmaceutical manufacturing company or medical device manufacturer or a single study without other supportable studies.

(19)[(18)] "Service area" means the geographical area within a 40-mile radius of the HMO's health care facility.

(20)[(19)] "Subscriber" means an individual whose employment or other status, except family dependency, is the basis for eligibility for enrollment in the HMO, or in the case of an individual contract, the person in whose name the contract is issued.

 

R590-76-7. HMO Services.

(1) Access to Care.

(a) An HMO shall establish and maintain adequate arrangements to provide health services for its enrollees, including:

(i) reasonable proximity to the business or personal residences of the enrollees so as not to result in unreasonable barriers to accessibility;

(ii) reasonable hours of operation and after-hours services;

(iii) emergency care services available and accessible within the service area 24 hours a day, 7 days a week; and

(iv) sufficient providers, personnel, administrators and support staff to assure that all services contracted for will be accessible to enrollees on an appropriate basis without delays detrimental to the health of enrollees.

(b) If a primary care physician is required in order to obtain covered services, an HMO shall make available to each enrollee a primary care physician and provide accessibility to medically necessary specialists through staffing, contracting or referral.

(c) An HMO shall have written procedures governing the availability of services utilized by enrollees, including at least the following:

(i) well-patient examinations and immunizations;

(ii) treatment of emergencies;

(iii) treatment of minor illness; and

(iv) treatment of chronic illnesses.

(2) Basic health care services. An HMO shall provide, or arrange for the provision of, as a minimum, basic health care services, which shall include the following:

(a) emergency care services;

(b) inpatient hospital services, meaning medically necessary hospital services including:

(i) room and board;

(ii) general nursing care;

(iii) special diets when medically necessary;

(iv) use of operating room and related facilities;

(v) use of intensive care units and services;

(vi) x-ray, laboratory and other diagnostic tests;

(vii) drugs, medications, biologicals;

(viii) anesthesia and oxygen services;

(ix) special nursing when medically necessary;

(x) physical therapy, radiation therapy and inhalation therapy;

(xi) administration of whole blood and blood plasma; and

(xii) short-term rehabilitation services;

(c) inpatient physician care services, meaning medically necessary health care services performed, prescribed, or supervised by physicians or other providers including diagnostic, therapeutic, medical, surgical, preventive, referral and consultative health care services;

(d) Outpatient medical services, meaning preventive and medically necessary health care services provided in a physician's office, a non-hospital-based health care facility or at a hospital. Outpatient medical services shall include:

(i) diagnostic services;

(ii) treatment services;

(iii) laboratory services;

(iv) x-ray services;

(v) referral services;

(vi) physical therapy, radiation therapy and inhalation therapy; and

(vii) preventive health services, which shall include at least a range of services for the diagnosis of infertility, well-child care from birth, periodic health evaluations for adults, screening to determine the need for vision and hearing correction, and pediatric and adult immunizations in accordance with accepted medical practice;

(e) Coverage of inborn metabolic errors as required by 31A-22-623 and Rule R590-194, Coverage of Dietary Products for Inborn Errors of Amino Acid or Urea Cycle Metabolism, and benefits for diabetes as required by 31A-22-626 and Rule R590-200, Diabetes Treatment and Management.

(3) Out-of-area benefits and services. Other than emergency care, if the contract provides out-of-area services, they shall be subject to the same copayment, coinsurance, and deductible requirements set forth in R590-76-5(7).

(4)(a) An HMO may offer a contract or endorsement that provides incidental coverage.

(b) An incidental coverage contract or endorsement is exempt from the basic health care services and emergency care requirements set forth in this rule.

(c) An HMO offering an incidental benefit contract or endorsement may offer all of the basic health care services.

 

R590-76-12. Enforcement Date.

The commissioner will begin enforcing the revised provisions of this rule 45 days from the rule's effective date.[Effective January 1, 2003, the department will enforce this rule.]

 

KEY: HMO insurance

Date of Enactment or Last Substantive Amendment: [February 26, 2003 ] 2009

Notice of Continuation: September 23, 2004

Authorizing, and Implemented or Interpreted Law: 31A-2-201