SENATE BILL No. 1088

February 6, 2002, Introduced by Senators BYRUM, GARCIA, EMMONS, SIKKEMA, GOSCHKA

and PETERS and referred to the Committee on Health Policy.

A bill to amend 1956 PA 218, entitled

"The insurance code of 1956,"

by amending sections 2243, 3405, 3631, and 3709 (MCL 500.2243,

500.3405, 500.3631, and 500.3709), as amended by 1994 PA 438; and

to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 2243. (1) Notwithstanding any provision of a policy or

2 contract of group accident, group health, or group accident and

3 health insurance, executed after July 23, 1965, if the policy or

4 contract provides for reimbursement for any optometric service

5 that is within the lawful scope of practice of a duly licensed

6 optometrist, a subscriber to such group accident, group health,

7 or group accident and group health insurance policy or contract

8 shall be entitled to reimbursement for such service, whether the

9 service is performed by a physician or a duly licensed

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1 optometrist. Unless the policy or contract of group accident,

2 group health, or group accident and health insurance otherwise

3 provides, there shall be no reimbursement for ophthalmic materi-

4 als, lenses, spectacles, eyeglasses, or appurtenances.

5 (2) If a subscriber contract provides for and offers opto-

6 metric services, the subscriber shall have freedom of choice to

7 select either a physician or an optometrist to render the

8 services. Unless the subscriber contract otherwise provides,

9 there shall be no reimbursement for ophthalmic materials, lenses,

10 spectacles, eyeglasses, or appurtenances.

11 (3) This section does not require coverage or reimbursement

12 for a practice of optometric service unless that service was

13 included in the definition of practice of optometry under

14 section 17401 of the public health code, Act No. 368 of the

15 Public Acts of 1978, being section 333.17401 of the Michigan

16 Compiled Laws, as of May 20, 1992.

17 Sec. 3405. (1) For the purpose of doing business as an

18 organization under the prudent purchaser act, Act No. 233 of the

19 Public Acts of 1984, being sections 550.51 to 550.63 of the

20 Michigan Compiled Laws 1984 PA 233, MCL 550.51 TO 550.63, an

21 insurer authorized in this state to write disability insurance

22 that provides coverage for hospital, nursing, medical, surgical,

23 or sick-care benefits may enter into prudent purchaser agreements

24 with providers of hospital, nursing, medical, surgical, or

25 sick-care services pursuant to this section and Act No. 233 of

26 the Public Acts of 1984 THE PRUDENT PURCHASER ACT, 1984 PA 233,

27 MCL 550.51 TO 550.63.

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1 (2) An insurer may offer disability insurance policies under

2 which the insured persons shall be required, as a condition of

3 coverage, to obtain hospital, nursing, medical, surgical, or

4 sick-care services exclusively from health care providers who

5 have entered into prudent purchaser agreements. A person to whom

6 such a policy is offered shall also be offered a policy that:

7 (a) Does not, as a condition of coverage, require insured

8 persons to obtain services exclusively from health care providers

9 who have entered into prudent purchaser agreements.

10 (b) Does not give a financial advantage or other advantage

11 to an insured person who elects to obtain services from health

12 care providers who have entered into prudent purchaser

13 agreements.

14 (3) An insurer may offer disability insurance policies under

15 which insured persons who elect to obtain hospital, nursing, med-

16 ical, surgical, or sick-care services from health care providers

17 who have entered into prudent purchaser agreements shall realize

18 a financial advantage or other advantage by selecting such

19 THOSE providers. Policies offered pursuant to this subsection

20 shall not, as a condition of coverage, require insured persons to

21 obtain such services exclusively from health care providers who

22 have entered into prudent purchaser agreements. A person to whom

23 such a policy is offered shall also be offered a policy that:

24 (a) Does not, as a condition of coverage, require insured

25 persons to obtain services exclusively from health care providers

26 who have entered into prudent purchaser agreements.

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1 (b) Does not give a financial advantage or other advantage

2 to an insured person who elects to obtain services from health

3 care providers who have entered into prudent purchaser

4 agreements.

5 (4) The rates charged by an insurer for coverage under poli-

6 cies issued under this section shall not be unreasonably lower

7 than what is necessary to meet the expenses of the insurer for

8 providing this coverage and shall not have an anticompetitive

9 effect or result in predatory pricing in relation to prudent pur-

10 chaser agreement coverages offered by other organizations.

11 (5) An insurer shall not discriminate against a class of

12 health care providers when entering into prudent purchaser agree-

13 ments with health care providers for its provider panel. This

14 subsection does not:

15 (a) Prohibit the formation of a provider panel consisting of

16 a single class of providers when a service provided for in the

17 specifications of a purchaser may legally be provided only by a

18 single class of providers.

19 (b) Prohibit the formation of a provider panel that conforms

20 to the specifications of a purchaser of the coverage authorized

21 by this section so long as the specifications do not exclude any

22 class of health care providers who may legally perform the serv-

23 ices included in the coverage.

24 (c) Require an organization that has uniformly applied the

25 standards filed pursuant to section 3(3) of Act No. 233 of the

26 Public Acts of 1984, being section 550.53 of the Michigan

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1 Compiled Laws THE PRUDENT PURCHASER ACT, 1984 PA 233, MCL

2 550.53, to contract with any individual provider.

3 (6) Nothing in this THE 1984 amendatory act THAT ADDED

4 THIS SUBSECTION applies to any contract that is in existence

5 before December 20, 1984, or the renewal of such THAT

6 contract.

7 (7) Notwithstanding any other provision of this act, if

8 coverage under a prudent purchaser agreement provides for bene-

9 fits for services that are within the scope of practice of optom-

10 etry, an insurer is not required to provide coverage or reimburse

11 for a practice of optometric service unless that service was

12 included in the definition of practice of optometry under

13 section 17401 of the public health code, Act No. 368 of the

14 Public Acts of 1978, being section 333.17401 of the Michigan

15 Compiled Laws, as of May 20, 1992.

16 (7) (8) Notwithstanding any other provision of this act,

17 if coverage under a prudent purchaser agreement provides for ben-

18 efits for services that are within the scope of practice of chi-

19 ropractic, an insurer is not required to provide coverage or

20 reimburse for the use of therapeutic sound or electricity, or

21 both, for the reduction or correction of spinal subluxations in a

22 chiropractic service. This subsection shall not take effect

23 unless Senate Bill No. 493 of the 87th Legislature is enacted

24 into law.

25 Sec. 3631. (1) For the purpose of doing business as an

26 organization under the prudent purchaser act, Act No. 233 of the

27 Public Acts of 1984, being sections 550.51 to 550.63 of the

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1 Michigan Compiled Laws 1984 PA 233, MCL 550.51 TO 550.63, an

2 insurer authorized to write group disability insurance or family

3 expense insurance that provides coverage for hospital, nursing,

4 medical, surgical, or sick-care benefits may enter into prudent

5 purchaser agreements with providers of hospital, nursing, medi-

6 cal, surgical, or sick-care services pursuant to this section and

7 Act No. 233 of the Public Acts of 1984 THE PRUDENT PURCHASER

8 ACT, 1984 PA 233, MCL 550.51 TO 550.63.

9 (2) An insurer may offer group disability insurance policies

10 or family expense policies under which the insured persons shall

11 be required, as a condition of coverage, to obtain hospital,

12 nursing, medical, surgical, or sick-care services exclusively

13 from health care providers who have entered into prudent pur-

14 chaser agreements.

15 (3) An individual who is a member of a group who is offered

16 the option of being under a policy pursuant to subsection (2)

17 shall also be offered the option of being insured under a policy

18 pursuant to subsection (4). This subsection applies only if the

19 group in which the individual is a member has 25 or more members

20 or if the provider panel that is providing the services under the

21 group policy is limited by the organization to a specific number

22 pursuant to section 3(1) of Act No. 233 of the Public Acts of

23 1984, being section 550.53 of the Michigan Compiled Laws THE

24 PRUDENT PURCHASER ACT, 1984 PA 233, MCL 550.53.

25 (4) An insurer may offer group disability insurance policies

26 or family expense policies under which insured persons who elect

27 to obtain hospital, nursing, medical, surgical, or sick-care

04169'01 **

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1 services from health care providers who have entered into prudent

2 purchaser agreements shall realize a financial advantage or other

3 advantage by selecting such a provider THOSE PROVIDERS.

4 Policies offered pursuant to this subsection shall not, as a con-

5 dition of coverage, require insured persons to obtain such

6 services exclusively from health care providers who have entered

7 into prudent purchaser agreements.

8 (5) An individual who is a member of a group who is offered

9 the option of being insured under a policy pursuant to

10 subsection (2) or (4) shall also be offered the option of being

11 insured under a policy that:

12 (a) Does not, as a condition of coverage, require insured

13 persons to obtain services exclusively from health care providers

14 who have entered into prudent purchaser agreements.

15 (b) Does not give a financial advantage or other advantage

16 to an insured person who elects to obtain services from health

17 care providers who have entered into prudent purchaser

18 agreements.

19 (6) Subsection (5) applies only if the group in which the

20 individual is a member has 25 or more members and if the group on

21 December 20, 1984 had health care coverage through the group

22 sponsor.

23 (7) The rates charged by an insurer for coverage under poli-

24 cies issued under this section shall not be unreasonably lower

25 than what is necessary to meet the expenses of the insurer for

26 providing this coverage and shall not have an anticompetitive

04169'01 **

8

1 effect or result in predatory pricing in relation to prudent

2 purchaser agreement coverages offered by other organizations.

3 (8) An insurer shall not discriminate against a class of

4 health care providers when entering into prudent purchaser agree-

5 ments with health care providers for its provider panel. This

6 subsection does not:

7 (a) Prohibit the formation of a provider panel consisting of

8 a single class of providers when a service provided for in the

9 specifications of a purchaser may legally be provided only by a

10 single class of providers.

11 (b) Prohibit the formation of a provider panel that conforms

12 to the specifications of a purchaser of the coverage authorized

13 by this section so long as the specifications do not exclude any

14 class of health care providers who may legally perform the serv-

15 ices included in the coverage.

16 (c) Require an organization that has uniformly applied the

17 standards filed pursuant to section 3(3) of Act No. 233 of the

18 Public Acts of 1984, being section 550.53 of the Michigan

19 Compiled Laws THE PRUDENT PURCHASER ACT, 1984 PA 233, MCL

20 550.53, to contract with any individual provider.

21 (9) Nothing in this THE 1984 amendatory act THAT ADDED

22 THIS SUBSECTION applies to any contract that is in existence

23 before December 20, 1984, or the renewal of such THAT

24 contract.

25 (10) Notwithstanding any other provision of this act, if

26 coverage under a prudent purchaser agreement provides for

27 benefits for services that are within the scope of practice of

04169'01 **

9

1 optometry, an insurer is not required to provide coverage or

2 reimburse for a practice of optometric service unless that serv-

3 ice was included in the definition of practice of optometry under

4 section 17401 of the public health code, Act No. 368 of the

5 Public Acts of 1978, being section 333.17401 of the Michigan

6 Compiled Laws, as of May 20, 1992.

7 (10) (11) Notwithstanding any other provision of this act,

8 if coverage under a prudent purchaser agreement provides for ben-

9 efits for services that are within the scope of practice of chi-

10 ropractic, an insurer is not required to provide coverage or

11 reimburse for the use of therapeutic sound or electricity, or

12 both, for the reduction or correction of spinal subluxations in a

13 chiropractic service. This subsection shall not take effect

14 unless Senate Bill No. 493 of the 87th Legislature is enacted

15 into law.

16 Sec. 3709. (1) For the purpose of doing business as an

17 organization under the prudent purchaser act, Act No. 233 of the

18 Public Acts of 1984, being sections 550.51 to 550.63 of the

19 Michigan Compiled Laws 1984 PA 233, MCL 550.51 TO 550.63, an

20 insurer authorized under this chapter to write health insurance

21 that provides coverage for hospital, nursing, medical, surgical,

22 or sick-care benefits may enter into prudent purchaser agreements

23 with providers of hospital, nursing, medical, surgical, or

24 sick-care services pursuant to this section and Act No. 233 of

25 the Public Acts of 1984 THE PRUDENT PURCHASER ACT, 1984 PA 233,

26 MCL 550.51 TO 550.63.

04169'01 **

10

1 (2) An insurer may offer health insurance policies or family

2 expense policies under which the insured persons shall be

3 required, as a condition of coverage, to obtain hospital, nurs-

4 ing, medical, surgical, or sick-care services exclusively from

5 health care providers who have entered into prudent purchaser

6 agreements.

7 (3) An individual who is a member of a group who is offered

8 the option of being insured under a policy pursuant to subsection

9 (2) shall also be offered the option of being insured under a

10 policy pursuant to subsection (4). This subsection applies only

11 if the group in which the individual is a member has 25 or more

12 members or if the provider panel that is providing the services

13 under the group policy is limited by the organization to a spe-

14 cific number pursuant to section 3(1) of the Act No. 233 of the

15 Public Acts of 1984, being section 550.53 of the Michigan

16 Compiled Laws PRUDENT PURCHASER ACT, 1984 PA 233, MCL 550.53.

17 (4) An insurer may offer health insurance policies under

18 which insured persons who elect to obtain hospital, nursing, med-

19 ical, surgical, or sick-care services from health care providers

20 who have entered into prudent purchaser agreements shall realize

21 a financial advantage or other advantage by selecting such

22 THOSE providers. Policies offered pursuant to this subsection

23 shall not, as a condition of coverage, require insured persons to

24 obtain services exclusively from health care providers who have

25 entered into prudent purchaser agreements.

26 (5) An individual who is a member of a group who is offered

27 the option of being insured under a policy pursuant to subsection

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11

1 (2) or (4) shall also be offered the option of being insured

2 under a policy that:

3 (a) Does not, as a condition of coverage, require insured

4 persons to obtain services exclusively from health care providers

5 who have entered into prudent purchaser agreements.

6 (b) Does not give a financial advantage or other advantage

7 to an insured person who elects to obtain services from health

8 care providers who have entered into prudent purchaser

9 agreements.

10 (6) Subsection (5) applies only if the group in which the

11 individual is a member has 25 or more members and if the group on

12 December 20, 1984 had health care coverage through the group

13 sponsor.

14 (7) The rates charged by an insurer for coverage under poli-

15 cies issued under this section shall not be unreasonably lower

16 than what is necessary to meet the expenses of the insurer for

17 providing this coverage and shall not have an anticompetitive

18 effect or result in predatory pricing in relation to prudent pur-

19 chaser agreement coverages offered by other organizations.

20 (8) An insurer shall not discriminate against a class of

21 health care providers when entering into prudent purchaser agree-

22 ments with health care providers for its provider panel. This

23 subsection does not:

24 (a) Prohibit the formation of a provider panel consisting of

25 a single class of providers when a service provided for in the

26 specifications of a purchaser may legally be provided only by a

27 single class of providers.

04169'01 **

12

1 (b) Prohibit the formation of a provider panel that conforms

2 to the specifications of a purchaser of the coverage authorized

3 by this section so long as the specifications do not exclude any

4 class of health care providers who may legally perform the serv-

5 ices included in the coverage.

6 (c) Require an organization that has uniformly applied the

7 standards filed pursuant to section 3(3) of Act No. 233 of the

8 Public Acts of 1984, being section 550.53 of the Michigan

9 Compiled Laws THE PRUDENT PURCHASER ACT, 1984 PA 233, MCL

10 550.53, to contract with any individual provider.

11 (9) Nothing in the 1984 amendatory act that added this sec-

12 tion applies to any contract that is in existence before

13 December 20, 1984, or the renewal of such THAT contract.

14 (10) Notwithstanding any other provision of this act, if

15 coverage under a prudent purchaser agreement provides for bene-

16 fits for services that are within the scope of practice of optom-

17 etry, an insurer is not required to provide coverage or reimburse

18 for a practice of optometric service unless that service was

19 included in the definition of practice of optometry under

20 section 17401 of the public health code, Act No. 368 of the

21 Public Acts of 1978, being section 333.17401 of the Michigan

22 Compiled Laws, as of May 20, 1992.

23 (10) (11) Notwithstanding any other provision of this act,

24 if coverage under a prudent purchaser agreement provides for ben-

25 efits for services that are within the scope of practice of chi-

26 ropractic, an insurer is not required to provide coverage or

27 reimburse for the use of therapeutic sound or electricity, or

04169'01 **

13

1 both, for the reduction or correction of spinal subluxations in a

2 chiropractic service. This subsection shall not take effect

3 unless Senate Bill No. 493 of the 87th Legislature is enacted

4 into law.

5 Enacting section 1. Section 3107b of the insurance code of

6 1956, 1956 PA 218, MCL 500.3107b, is repealed.

7 Enacting section 2. This amendatory act does not take

8 effect unless all of the following bills of the 91st Legislature

9 are enacted into law:

10 (a) Senate Bill No. 1089.

11

12 (b) Senate Bill No. 1090.

13

14 (c) Senate Bill No. 1091.

15

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