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First Substitute H.B. 35
Representative Judy Ann Buffmire proposes to substitute the following bill:
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CATASTROPHIC MENTAL HEALTH
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INSURANCE COVERAGE
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Judy Ann Buffmire
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AN ACT RELATING TO INSURANCE; DEFINING TERMS; REQUIRING THAT HEALTH
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INSURANCE POLICIES APPLY THE SAME LIFETIME LIMITS, ANNUAL PAYMENT
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LIMITS, AND OUT-OF-POCKET LIMITS TO MENTAL HEALTH CONDITIONS AS APPLY
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TO PHYSICAL HEALTH CONDITIONS; PERMITTING THE USE OF MANAGED CARE
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AND CLOSED PANELS; REQUIRING THAT SERVICES BE PROVIDED BY LICENSED
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THERAPISTS AND FACILITIES; PERMITTING EMPLOYERS TO SEEK A HARDSHIP
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EXEMPTION; IMPOSING DUTIES ON THE COMMISSIONER TO ADOPT RULES;
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REQUIRING AN INTERIM REVIEW; AND PROVIDING A REPEAL DATE.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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31A-22-617, as last amended by Chapters 314 and 316, Laws of Utah 1994
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31A-22-618, as last amended by Chapter 204, Laws of Utah 1986
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63-55-231, as last amended by Chapter 131, Laws of Utah 1999
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ENACTS:
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31A-22-625, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
31A-22-617
is amended to read:
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31A-22-617. Preferred provider contract provisions.
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Health insurance policies may provide for insureds to receive services or reimbursement
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under the policies in accordance with preferred health care provider contracts as follows:
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(1) Subject to restrictions under this section, any insurer or third party administrator may
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enter into contracts with health care providers as defined in Section
78-14-3
under which the health
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care providers agree to supply services, at prices specified in the contracts, to persons insured by
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an insurer. The health care provider contract may require the health care provider to accept the
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specified payment as payment in full, relinquishing the right to collect additional amounts from
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the insured person. The insurance contract may reward the insured for selection of preferred health
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care providers by reducing premium rates, reducing deductibles, coinsurance, or other copayments,
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or in any other reasonable manner.
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(2) (a) Subject to Subsections (2)(b) through (2)(f), an insurer using preferred health care
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provider contracts shall pay for the services of health care providers not under the contract, unless
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the illnesses or injuries treated by the health care provider are not within the scope of the insurance
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contract. As used in this section, "class of health care providers" means all health care providers
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licensed or licensed and certified by the state within the same professional, trade, occupational, or
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facility licensure or licensure and certification category established pursuant to Titles 26 and 58.
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(b) When the insured receives services from a health care provider not under contract, the
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insurer shall reimburse the insured for at least 75% of the average amount paid by the insurer for
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comparable services of preferred health care providers who are members of the same class of
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health care providers. The commissioner may adopt a rule dealing with the determination of what
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constitutes 75% of the average amount paid by the insurer for comparable services of preferred
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health care providers who are members of the same class of health care providers.
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(c) When reimbursing for services of health care providers not under contract, the insurer
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may make direct payment to the insured.
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(d) Notwithstanding Subsection (2)(b), an insurer using preferred health care provider
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contracts may impose a deductible on coverage of health care providers not under contract.
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(e) When selecting health care providers with whom to contract under Subsection (1), an
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insurer may not unfairly discriminate between classes of health care providers, but may
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discriminate within a class of health care providers, subject to Subsection (7).
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(f) For purposes of this section, unfair discrimination between classes of health care
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providers shall include:
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(i) refusal to contract with class members in reasonable proportion to the number of
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insureds covered by the insurer and the expected demand for services from class members; and
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(ii) refusal to cover procedures for one class of providers that are:
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(A) commonly utilized by members of the class of health care providers for the treatment
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of illnesses, injuries, or conditions;
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(B) otherwise covered by the insurer; and
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(C) within the scope of practice of the class of health care providers.
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(3) Before the insured consents to the insurance contract, the insurer shall fully disclose
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to the insured that it has entered into preferred health care provider contracts. The insurer shall
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provide sufficient detail on the preferred health care provider contracts to permit the insured to
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agree to the terms of the insurance contract. The insurer shall provide at least the following
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information:
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(a) a list of the health care providers under contract and if requested their business
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locations and specialties;
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(b) a description of the insured benefits, including any deductibles, coinsurance, or other
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copayments;
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(c) a description of the quality assurance program required under Subsection (4); and
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(d) a description of the grievance procedures required under Subsection (5).
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(4) (a) An insurer using preferred health care provider contracts shall maintain a quality
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assurance program for assuring that the care provided by the health care providers under contract
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meets prevailing standards in the state.
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(b) The commissioner in consultation with the executive director of the Department of
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Health may designate qualified persons to perform an audit of the quality assurance program. The
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auditors shall have full access to all records of the organization and its health care providers,
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including medical records of individual patients.
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(c) The information contained in the medical records of individual patients shall remain
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confidential. All information, interviews, reports, statements, memoranda, or other data furnished
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for purposes of the audit and any findings or conclusions of the auditors are privileged. The
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information is not subject to discovery, use, or receipt in evidence in any legal proceeding except
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hearings before the commissioner concerning alleged violations of this section.
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(5) An insurer using preferred health care provider contracts shall provide a reasonable
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procedure for resolving complaints and grievances initiated by the insureds and health care
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providers.
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(6) An insurer may not contract with a health care provider for treatment of illness or
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injury unless the health care provider is licensed to perform that treatment.
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(7) (a) No health care provider or insurer may discriminate against a preferred health care
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provider for agreeing to a contract under Subsection (1).
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(b) Any health care provider licensed to treat any illness or injury within the scope of the
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health care provider's practice, who is willing and able to meet the terms and conditions established
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by the insurer for designation as a preferred health care provider, shall be able to apply for and
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receive the designation as a preferred health care provider. Contract terms and conditions may
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include reasonable limitations on the number of designated preferred health care providers based
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upon substantial objective and economic grounds, or expected use of particular services based
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upon prior provider-patient profiles.
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(8) Upon the written request of a provider excluded from a provider contract, the
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commissioner may hold a hearing to determine if the insurer's exclusion of the provider is based
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on the criteria set forth in Subsection (7)(b).
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(9) Insurers are subject to the provisions of Sections
31A-22-613.5
,
31A-22-614.5
, and
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31A-22-618
.
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(10) Nothing in this section is to be construed as to require an insurer to offer a certain
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benefit or service as part of a health benefit plan.
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(11) This section does not apply to mental health benefits provided pursuant to Section
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31A-22-625
.
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Section 2.
Section
31A-22-618
is amended to read:
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31A-22-618. Nondiscrimination among health care professionals.
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(1) Except as provided under Section
31A-22-617
, and except as to insurers licensed under
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Chapter 8, no insurer may unfairly discriminate against any licensed class of health care providers
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by structuring contract exclusions which exclude payment of benefits for the treatment of any
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illness, injury, or condition by any licensed class of health care providers when the treatment is
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within the scope of the licensee's practice and the illness, injury, or condition falls within the
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coverage of the contract. Upon the written request of an insured alleging an insurer has violated
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this section, the commissioner shall hold a hearing to determine if the violation exists. The
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commissioner may consolidate two or more related alleged violations into a single hearing.
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(2) This section does not apply to mental health benefits provided pursuant to Section
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31A-22-625
.
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Section 3.
Section
31A-22-625
is enacted to read:
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31A-22-625. Catastrophic coverage of mental health conditions.
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(1) As used in this section:
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(a) (i) "Mental health condition" means any condition or disorder involving mental illness
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that falls under any of the diagnostic categories listed in the mental disorders section of the
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International Classification of Diseases, as periodically revised.
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(ii) "Mental health condition" does not include the following when diagnosed as the
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primary or substantial reason or need for treatment:
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(A) marital or family problem;
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(B) social, occupational, religious, or other social maladjustment;
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(C) conduct disorder;
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(D) chronic adjustment disorder;
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(E) sexual paraphilias;
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(F) personality disorder;
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(G) specific developmental disorder or learning disability; or
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(H) mental retardation.
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(b) Until January 1, 2004:
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(i) "Rate, term, or condition" means any lifetime limit, annual payment limit, episodic
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limit, inpatient or outpatient service limit, and out-of-pocket limit.
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(ii) "Rate, term, or condition" does not include any deductible, copayment, or coinsurance
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prior to reaching any maximum out-of-pocket limit.
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(iii) Out-of-pocket expenses for mental health conditions and physical health conditions
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shall apply equally to any out-of-pocket limit within a policy or contract.
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(c) Beginning January 1, 2004, "rate, term, or condition" means any lifetime or annual
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payment limits, deductibles, copayments, coinsurance, and any other cost-sharing requirements,
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out-of-pocket limits, visit limits, or any other financial component of health insurance coverage
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that affects the insured.
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(d) "Rate" does not mean an insurance premium.
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(2) This section shall apply to health insurance policies and health maintenance
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organization contracts in effect after:
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(a) January 1, 2001, if the policy or contract covers 11 or more employees; and
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(b) January 1, 2002, if the policy or contract covers an individual or 10 or less employees.
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(3) Except as provided in Subsection (5), a policy or contract:
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(a) shall provide coverage for the diagnosis and treatment of mental health conditions; and
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(b) may not establish any rate, term, or condition that places a greater financial burden on
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an insured for the diagnosis and treatment of a mental health condition than for the diagnosis and
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treatment of a covered physical health condition.
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(4) (a) A policy or contract may provide coverage for the diagnosis and treatment of
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mental health conditions through a managed care organization or system, regardless of whether
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the policy or contract uses a managed care organization or system for the treatment of physical
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health conditions.
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(b) (i) Notwithstanding any other provision of this title, an insurer may:
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(A) establish a closed panel of providers under this section; and
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(B) refuse to provide any benefit to be paid for services rendered by a nonpanel provider
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unless:
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(I) the insured is referred to a nonpanel provider with the prior authorization of the insurer;
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and
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(II) the nonpanel provider agrees to follow the insurer's protocols and treatment guidelines.
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(ii) If an insured receives services from a nonpanel provider in the manner permitted by
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Subsection (4)(d)(i)(B), the insurer shall reimburse the insured for not less than 75% of the average
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amount paid by the insurer for comparable services of panel providers under a noncapitated
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arrangement who are members of the same class of health care providers.
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(iii) Nothing in this Subsection (4)(b) may be construed as requiring an insurer to authorize
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a referral to a nonpanel provider.
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(c) To be eligible for coverage under this section, a diagnosis or treatment of a mental
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health condition must be rendered:
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(i) by a mental health therapist as defined in Section
58-60-102
; or
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(ii) in a health care facility licensed or otherwise authorized to provide mental health
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services pursuant to Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act, or
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Title 62A, Chapter 2, Licensure of Programs and Facilities, that provides a program for the
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treatment of a mental health condition pursuant to a written plan.
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(5) An employer that provides a policy or contract that is subject to this section may
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request a hardship exemption from the insurance commissioner by showing by clear and
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convincing evidence in an administrative proceeding that:
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(a) the employer:
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(i) has two to 10 employees; and
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(ii) has experienced an overall premium increase of no less than 2% during the previous
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12 month period based on actuarially sound data:
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(A) as a direct result of complying with the requirements of this section; and
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(B) discounting any increase that may be the result of inflation or providing coverage
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beyond what is required by this section; or
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(b) the employer:
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(i) has 11 or more employees; and
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(ii) has experienced an overall premium increase of no less than 3% during the previous
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12-month period based on actuarially sound data:
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(A) as a direct result of complying with the requirements of this section; and
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(B) discounting any increase that may be the result of inflation or providing coverage
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beyond what is required by this section.
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(6) The commissioner may disapprove any policy or contract that the commissioner
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determines to be inconsistent with the provisions of this section.
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(7) The commissioner shall adopt rules as necessary to ensure compliance with this
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section.
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(8) The Health and Human Services Interim Committee shall review the impact of this
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section on insurers, employers, providers, and consumers of mental health services before January
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1, 2003.
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(9) Nothing in this section may be construed as restricting the ability of an insurer to offer
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greater coverage or benefits for the diagnosis and treatment of mental health conditions than is
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required by this section.
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(10) This section shall be repealed in accordance with Section
63-55-231
.
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Section 4.
Section
63-55-231
is amended to read:
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63-55-231. Repeal dates, Title 31A.
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(1) Section
31A-2-208.5
, Comparison tables, is repealed July 1, 2005.
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(2) Section
31A-22-315
, Motor Vehicle Insurance Reporting, is repealed July 1, 2000.
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(3) Title 31A, Chapter 31, Insurance Fraud Act, is repealed July 1, 2007.
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(4) Section
31A-22-625
, Catastrophic Coverage of Mental Health Conditions, is repealed
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July 1, 2011.
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