April 20, 2004, Introduced by Senators HARDIMAN, KUIPERS, BARCIA, BIRKHOLZ, HAMMERSTROM, SIKKEMA and GOSCHKA and referred to the Committee on Health Policy.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 3501, 3515, and 3519 (MCL 500.3501,
500.3515, and 500.3519), section 3501 as added by 2000 PA 252 and
sections 3515 and 3519 as amended by 2002 PA 621.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 3501. As used in this chapter:
2 (a) "Affiliated provider" means a health professional,
3 licensed hospital, licensed pharmacy, or any other institution,
4 organization, or person having a contract with a health
5 maintenance organization to render 1 or more health maintenance
6 services to an enrollee.
7 (b) "Basic health services" means:
8 (i) Physician services including consultant and referral
9 services by a physician, but not including psychiatric services.
1 (ii) Ambulatory services.
2 (iii) Inpatient hospital services, other than those for the
3 treatment of mental illness.
4 (iv) Emergency health services.
5 (v) Outpatient mental health services, not fewer than 20
6 visits per year.
7 (vi) Intermediate and outpatient care for substance abuse as
8 follows:
9 (A) For group contracts, if the fees for a group contract
10 would be increased by 3% or more because of the provision of
11 services under this subparagraph, the group subscriber may
12 decline the services. For individual contracts, if the total
13 fees for all individual contracts would be increased by 3% or
14 more because of the provision of the services required under this
15 subparagraph in all of those contracts, the named subscriber of
16 each contract may decline the services.
17 (B) Charges, terms, and conditions for the services required
18 to be provided under this subparagraph shall not be less
19 favorable than the maximum prescribed for any other comparable
20 service.
21 (C) The services required to be provided under this
22 subparagraph shall not be reduced by terms or conditions that
23 apply to other services in a group or individual contract. This
24 sub-subparagraph shall not be construed to prohibit contracts
25 that provide for deductibles and copayment provisions for
26 services for intermediate and outpatient care for substance
27 abuse.
1 (D) The services required to be provided under this
2 subparagraph shall, at a minimum, provide for up to $2,968.00 in
3 services for intermediate and outpatient care for substance abuse
4 per individual per year. This minimum shall be adjusted annually
5 by March 31 each year in accordance with the annual average
6 percentage increase or decrease in the United States consumer
7 price index for the 12-month period ending the preceding December
8 31.
9 (E) As used in this subparagraph, "intermediate care",
10 "outpatient
care", and "substance abuse" have those meanings
11 ascribed to them mean those terms as defined in section 3425.
12 (vii) Diagnostic laboratory and diagnostic and therapeutic
13 radiological services.
14 (viii) Home health services.
15 (ix) Preventive health services.
16 (c) "Credentialing verification" means the process of
17 obtaining and verifying information about a health professional
18 and evaluating that health professional when that health
19 professional applies to become a participating provider with a
20 health maintenance organization.
21 (d) "Enrollee" means an individual who is entitled to receive
22 health maintenance services under a health maintenance contract.
23 (e) "Health maintenance contract" means a contract between a
24 health maintenance organization and a subscriber or group of
25 subscribers, to provide, when medically indicated, designated
26 health maintenance services, as described in and pursuant to the
27 terms of the contract,
including , at a minimum, basic health
1 maintenance services preventive health care services as defined
2 in section 3515. Health maintenance contract includes a prudent
3 purchaser contract.
4 (f) "Health maintenance organization" means an entity that
5 does the following:
6 (i) Delivers health maintenance services that are medically
7 indicated to enrollees under the terms of its health maintenance
8 contract, directly or through contracts with affiliated
9 providers, in exchange for a fixed prepaid sum or per capita
10 prepayment, without regard to the frequency, extent, or kind of
11 health services.
12 (ii) Is responsible for the availability, accessibility, and
13 quality of the health maintenance services provided.
14 (g) "Health maintenance services" means services provided to
15 enrollees of a health maintenance organization under their health
16 maintenance contract.
17 (h) "Health professional" means an individual licensed,
18 certified, or authorized in accordance with state law to practice
19 a health profession in his or her respective state.
20 (i) "Primary verification" means verification by the health
21 maintenance organization of a health professional's credentials
22 based upon evidence obtained from the issuing source of the
23 credential.
24 (j) "Prudent purchaser contract" means a contract offered by
25 a health maintenance organization to groups or to individuals
26 under which enrollees who select to obtain health care services
27 directly from the organization or through its affiliated
1 providers receive a financial advantage or other advantage by
2 selecting those providers.
3 (k) "Secondary verification" means verification by the health
4 maintenance organization of a health professional's credentials
5 based upon evidence obtained by means other than direct contact
6 with the issuing source of the credential.
7 (l) "Service area" means a defined geographical area in which
8 health maintenance services are generally available and readily
9 accessible to enrollees and where health maintenance
10 organizations may market their contracts.
11 (m) "Subscriber" means an individual who enters into a health
12 maintenance contract, or on whose behalf a health maintenance
13 contract is entered into, with a health maintenance organization
14 that has received a certificate of authority under this chapter
15 and to whom a health maintenance contract is issued.
16 Sec. 3515. (1) A health maintenance organization may
17 provide additional health maintenance services or any other
18 related health care service or treatment not required under this
19 chapter.
20 (2) A health maintenance organization may have health
21 maintenance contracts with deductibles. A health maintenance
22 organization may have health maintenance contracts with
23 copayments that are required for specific health maintenance
24 services. Copayments for services required under section
25 3501(b) 3519(4), excluding deductibles, shall be
nominal, shall
26 not exceed 50% of a health maintenance organization's
27 reimbursement to an affiliated provider for providing the service
1 to an enrollee, and shall not be based on the provider's standard
2 charge for the service. A health maintenance organization shall
3 not require contributions be made to a deductible for
4 preventative preventive health care services. As used in
this
5 subsection, "preventative
"preventive health care services"
6 means services all
of the following:
7 (a) Services designated to maintain an individual in optimum
8 health and to prevent unnecessary injury, illness, or disability,
9 but does not include services that are specifically excluded by
10 terms of a health maintenance contract.
11 (b) Age-specific, periodic health examinations and screenings
12 as recommended by the United States preventive services task
13 force or its successor.
14 (c) All routine, age-specific immunizations as recommended by
15 the advisory committee on immunization practices or its
16 successor. This subdivision does not require immunizations
17 recommended or required as a result of employment or
18 international travel or by other third parties.
19 (3) A health maintenance organization may accept from
20 governmental agencies and from private persons payments covering
21 any part of the cost of health maintenance contracts.
22 Sec. 3519. (1) A
health maintenance organization contract
23 and the contract's rates, including any deductibles and
24 copayments, between the organization and its subscribers shall be
25 fair, sound, and reasonable in relation to the services provided,
26 and the procedures for offering and terminating contracts shall
27 not be unfairly discriminatory.
1 (2) A health
maintenance organization contract and the
2 contract's rates shall not discriminate on the basis of race,
3 color, creed, national origin, residence within the approved
4 service area of the health maintenance organization, lawful
5 occupation, sex, handicap, or marital status, except that marital
6 status may be used to classify individuals or risks for the
7 purpose of insuring family units. The commissioner may approve a
8 rate differential based on sex, age, residence, disability,
9 marital status, or lawful occupation, if the differential is
10 supported by sound actuarial principles, a reasonable
11 classification system, and is related to the actual and credible
12 loss statistics or reasonably anticipated experience for new
13 coverages.
14 (3) All health
maintenance organization contracts shall
15 include , at a minimum,
basic health services preventive health
16 care services as defined in section 3515.
17 (4) A health maintenance organization shall market and offer
18 a set of health maintenance contracts that include basic health
19 services.