GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	1 

SENATE BILL 932

Short Title:  HMO Operations.	(Public)

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Sponsors: Senator Perdue.

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Referred to:  Commerce.

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April 17, 1997

A BILL TO BE ENTITLED
AN ACT TO MAKE IMPROVEMENTS IN THE OPERATIONS OF HEALTH MAINTENANCE ORGANIZATIONS IN NORTH CAROLINA.
The General Assembly of North Carolina enacts:
Section 1.  Article 67 of Chapter 58 of the General Statutes is amended by adding a new section to read: 
"§ 58-67-11. Additional HMO information.
(a)	In addition to the information filed under G.S. 58-67-10(c), each application shall include a description of the:
(1)	Program to be used to evaluate whether the applicant's provider network is sufficient, in numbers and types of providers, to assure that all health care services will be accessible without unreasonable delay.
(2)	Program to be used for verifying provider credentials.
(3)	Quality management program to assure quality of care and health care services managed and provided through the health care plan.
(4)	Utilization review program for the review and control of health care services provided or paid for.
(5)	Applicant's provider network and evidence of the ability of that network to provide all health care services to the applicant's prospective enrollees.
(b)	G.S. 58-67-10(d) applies to the information specified in this section."
Section 2.  G.S. 58-67-50(e) reads as rewritten:
"(e)	Effective on January 1, 1989, every health maintenance organization shall provide at least minimum cost and utilization information for group contracts of 100 or more subscribers on an annual basis when requested by the group. Such information shall be compiled in accordance with the Data Collection Form developed by the Standardized HMO Date Form Task Force as endorsed by the Washington Business Group on Health and the Group Health Association of America on November 19, 1986, and any subsequent amendments.  Beginning with data for the calendar year 1998, every HMO shall instead provide cost, use of service, prevention, outcomes, and other data as collected in accordance with the latest edition of the Health Plan Employer Data and Information Set (HEDIS) guidelines, as published by the National Committee for Quality Assurance, or in accordance with a different format if the Commissioner deems a different format to be more useful to the Department. Beginning with data for the calendar year 1998, every HMO shall file with the Department, not later than July 1 of the following calendar year, a report on its costs, use of services, and other aspects of performance, in the HEDIS format or in a format prescribed by the Commissioner."
Section 3.  G.S. 58-67-100 reads as rewritten:
"§ 58-67-100.  Examinations.
(a)	The Commissioner may make an examination of the affairs of any health maintenance organization and the contracts, agreements or other arrangements pursuant to its health care plan as often as the Commissioner deems it necessary for the protection of the interests of the people of this State but not less frequently than once every three years.  Examinations shall otherwise be conducted under G.S. 58-2-131, 58-2-132, and 58-2-133.
	(c)	Repealed by Session Laws 1995, c. 360, s. 2(m).
(d)	Instead of conducting an examination, the Commissioner may accept the report of an examination made by the HMO regulator of another state."
Section 4. G.S. 58-67-140 reads as rewritten:
"§ 58-67-140. License sanctions.
(a)	The Commissioner may suspend, revoke, or refuse to renew any HMO license if the Commissioner finds that the HMO:
(1)	Is operating significantly in contravention of its basic organizational document, or in a manner contrary to that described in and reasonably inferred from any other information submitted under G.S. 58-67-10, unless amendments to such submissions have been filed with and approved by the Commissioner.
(2)	Issues evidences of coverage or uses a schedule of premiums for health care services that do not comply with G.S. 58-67-50.
(3)	No longer maintains the financial reserve specified in G.S. 58-67-40 or is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees.
(4)	Has itself or through any person on its behalf advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive or unfair manner.
(5)	Is operating in a manner that would be hazardous to its enrollees.
(6)	Fails or refuses to comply with any law, order, or rule applicable to the HMO.
(7)	Has knowingly published or made to the Department or to the public any false statement or report, including any report or any data which serves as the basis for any report, required to be submitted under G.S. 58-67-50(e).
(b)	A license shall be suspended or revoked only after compliance with G.S. 58-67-155.
(c)	When an HMO license is suspended, the HMO shall not, during the suspension, enroll any additional enrollees except newborn children or other newly acquired dependents of existing enrollees, and shall not engage in any advertising or solicitation.
(d)	When an HMO license is revoked, the HMO shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs, and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of the HMO. The HMO shall engage in no advertising or solicitation. The Commissioner may, by written order, permit such further operation of the HMO as the Commissioner may find to be in the best interest of enrollees, to the end that enrollees will be afforded the greatest practical opportunity to obtain continuing health care coverage."
Section 5.  This act becomes effective October 1, 1997.