History: L. 1974, ch. 181, § 1; July 1.
(a) "Commissioner" means the commissioner of insurance of the state of Kansas.
(b) "Basic health care services" means but is not limited to usual physician, hospitalization, laboratory, x-ray, emergency and preventive services and out-of-area coverage.
(c) "Capitated basis" means a fixed per member per month payment or percentage of premium payment wherein the provider assumes risk for the cost of contracted services without regard to the type, value or frequency of services provided. For purposes of this definition, capitated basis includes the cost associated with operating staff model facilities.
(d) "Carrier" means a health maintenance organization, an insurer, a nonprofit hospital and medical service corporation, or other entity responsible for the payment of benefits or provision of services under a group contract.
(e) "Certificate of coverage" means a statement of the essential features and services of the health maintenance organization coverage which is given to the subscriber by the health maintenance organization, medicare provider organization or by the group contract holder.
(f) "Copayment" means an amount an enrollee must pay in order to receive a specific service which is not fully prepaid.
(g) "Deductible" means an amount an enrollee is responsible to pay out-of-pocket before the health maintenance organization begins to pay the costs associated with treatment.
(h) "Director" means the secretary of health and environment.
(i) "Disability" means an injury or illness that results in a substantial physical or mental limitation in one or more major life activities such as working or independent activities of daily living that a person was able to do prior to the injury or illness.
(j) "Enrollee" means a person who has entered into a contractual arrangement or on whose behalf a contractual arrangement has been entered into with a health maintenance organization or the medicare provider organization for health care services.
(k) "Grievance" means a written complaint submitted in accordance with the formal grievance procedure by or on behalf of the enrollee regarding any aspect of the health maintenance organization or the medicare provider organization relative to the enrollee.
(l) "Group contract" means a contract for health care services which by its terms limits eligibility to members of a specified group. The group contract may include coverage for dependents.
(m) "Group contract holder" means the person to which a group contract has been issued.
(n) "Health care services" means basic health care services and other services, medical equipment and supplies which may include, but are not limited to, medical, surgical and dental care; psychological, obstetrical, osteopathic, optometric, optic, podiatric, nursing, occupational therapy services, physical therapy services, chiropractic services and pharmaceutical services; health education, preventive medical, rehabilitative and home health services; inpatient and outpatient hospital services, extended care, nursing home care, convalescent institutional care, laboratory and ambulance services, appliances, drugs, medicines and supplies; and any other care, service or treatment for the prevention, control or elimination of disease, the correction of defects or the maintenance of the physical or mental well-being of human beings.
(o) "Health maintenance organization" means an organization which:
(1) Provides or otherwise makes available to enrollees health care services, including at a minimum those basic health care services which are determined by the commissioner to be generally available on an insured or prepaid basis in the geographic area served;
(2) is compensated, except for reasonable copayments, for the provision of basic health care services to enrollees solely on a predetermined periodic rate basis;
(3) provides physician services directly through physicians who are either employees or partners of such organization or under arrangements with a physician or any group of physicians or under arrangements as an independent contractor with a physician or any group of physicians;
(4) is responsible for the availability, accessibility and quality of the health care services provided or made available.
(p) "Individual contract" means a contract for health care services issued to and covering an individual. The individual contract may include dependents of the subscriber.
(q) "Individual practice association" means a partnership, corporation, association or other legal entity which delivers or arranges for the delivery of basic health care services and which has entered into a services arrangement with persons who are licensed to practice medicine and surgery, dentistry, chiropractic, pharmacy, podiatry, optometry or any other health profession and a majority of whom are licensed to practice medicine and surgery. Such an arrangement shall provide:
(1) That such persons shall provide their professional services in accordance with a compensation arrangement established by the entity; and
(2) to the extent feasible for the sharing by such persons of medical and other records, equipment, and professional, technical and administrative staff.
(r) "Medical group" or "staff model" means a partnership, association or other group:
(1) Which is composed of health professionals licensed to practice medicine and surgery and of such other licensed health professionals, including but not limited to dentists, chiropractors, pharmacists, optometrists and podiatrists as are necessary for the provision of health services for which the group is responsible;
(2) a majority of the members of which are licensed to practice medicine and surgery; and
(3) the members of which: (A) As their principal professional activity over 50% individually and as a group responsibility are engaged in the coordinated practice of their profession for a health maintenance organization; (B) pool their income and distribute it among themselves according to a prearranged salary or drawing account or other plan, or are salaried employees of the health maintenance organization; (C) share medical and other records and substantial portions of major equipment and of professional, technical and administrative staff; and (D) establish an arrangement whereby the enrollee's enrollment status is not known to the member of the group who provides health services to the enrollee.
(s) "Medicare provider organization" means an organization which:
(1) Is a provider-sponsored organization as defined by Section 4001 of the Balanced Budget Act of 1997 (PL 105-33); and
(2) provides or otherwise makes available to enrollees basic health care services pursuant to Section 4001 of the Balanced Budget Act of 1997 (PL 105-33).
(t) "Net worth" means the excess of assets over liabilities as determined by the commissioner from the latest annual report filed pursuant to K.S.A. 40-3220 and amendments thereto.
(u) "Person" means any natural or artificial person including but not limited to individuals, partnerships, associations, trusts or corporations.
(v) "Physician" means a person licensed to practice medicine and surgery under the healing arts act.
(w) "Provider" means any physician, hospital or other person which is licensed or otherwise authorized in this state to furnish health care services.
(x) "Uncovered expenditures" means the costs of health care services that are covered by a health maintenance organization for which an enrollee would also be liable in the event of the organization's insolvency as determined by the commissioner from the latest annual statement filed pursuant to K.S.A. 40-3220 and amendments thereto and which are not guaranteed, insured or assumed by any person or organization other than the carrier.
History: L. 1974, ch. 181, § 2; L. 1975, ch. 248, § 1; L. 1984, ch. 176, § 1; L. 1996, ch. 169, § 6; L. 1998, ch. 174, § 13; L. 2000, ch. 147, § 37; July 1.
(b) Applications for a certificate of authority shall be made in the form required by the commissioner and shall be verified by an officer or authorized representative of the applicant and shall set forth or be accompanied by:
(1) A copy of the basic organizational documents of the applicant such as articles of incorporation, partnership agreements, trust agreements or other applicable documents;
(2) a copy of the bylaws, regulations or similar document, if any, regulating the conduct of the internal affairs of the applicant;
(3) a list of the names, addresses, official capacity with the organization and biographical information for all of the persons who are to be responsible for the conduct of its affairs, including all members of the governing body, the officers and directors in the case of a corporation and the partners or members in the case of a partnership or corporation;
(4) a sample or representative copy of any contract or agreement made or to be made between the health maintenance organization or medicare provider organization and any class of providers and a copy of any contract made or agreement made or to be made, excluding individual employment contracts or agreements, between third party administrators, marketing consultants or persons listed in subsection (3) and the health maintenance organization or medicare provider organization;
(5) a statement generally describing the organization, its enrollment process, its operation, its quality assurance mechanism, its internal grievance procedures, in the case of a health maintenance organization the methods it proposes to use to offer its enrollees an opportunity to participate in matters of policy and operation, the geographic area or areas to be served, the location and hours of operation of the facilities at which health care services will be regularly available to enrollees in the case of staff and group practices, the type and specialty of health care personnel and the number of personnel in each specialty category engaged to provide health care services in the case of staff and group practices, and a records system providing documentation of utilization rates for enrollees. In cases other than staff and group practices, the organization shall provide a list of names, addresses and telephone numbers of providers by specialty;
(6) copies of all contract forms the organization proposes to offer enrollees together with a table of rates to be charged;
(7) the following statements of the fiscal soundness of the organization:
(A) Descriptions of financing arrangements for operational deficits and for developmental costs if operational one year or less;
(B) a copy of the most recent unaudited financial statements of the health maintenance organization or medicare provider organization;
(C) financial projections in conformity with statutory accounting practices prescribed or otherwise permitted by the department of insurance of the state of domicile for a minimum of three years from the anticipated date of certification and on a monthly basis from the date of certification through one year. If the health maintenance organization or medicare provider organization is expected to incur a deficit, projections shall be made for each deficit year and for one year thereafter. Financial projections shall include:
(i) Monthly statements of revenue and expense for the first year on a gross dollar as well as per-member-per-month basis, with quarters consistent with standard calendar year quarters;
(ii) quarterly statements of revenue and expense for each subsequent year;
(iii) a quarterly balance sheet; and
(iv) statement and justification of assumptions;
(8) a description of the procedure to be utilized by a health maintenance organization or medicare provider organization to provide for:
(A) Offering enrollees an opportunity to participate in matters of policy and operation of a health maintenance organization;
(B) monitoring of the quality of care provided by such organization including, as a minimum, peer review; and
(C) resolving complaints and grievances initiated by enrollees;
(9) a written irrevocable consent duly executed by such applicant, if the applicant is a nonresident, appointing the commissioner as the person upon whom lawful process in any legal action against such organization on any cause of action arising in this state may be served and that such service of process shall be valid and binding in the same extent as if personal service had been had and obtained upon said nonresident in this state;
(10) a plan, in the case of group or staff practices, that will provide for maintaining a medical records system which is adequate to provide an accurate documentation of utilization by every enrollee, such system to identify clearly, at a minimum, each patient by name, age and sex and to indicate clearly the services provided, when, where, and by whom, the diagnosis, treatment and drug therapy, and in all other cases, evidence that contracts with providers require that similar medical records systems be in place;
(11) evidence of adequate insurance coverage or an adequate plan for self-insurance to respond to claims for injuries arising out of the furnishing of health care;
(12) such other information as may be required by the commissioner to make the determinations required by K.S.A. 40-3204 and amendments thereto; and
(13) in lieu of any of the application requirements imposed by this section on a medicare provider organization, the commissioner may accept any report or application filed by the medicare provider organization with the appropriate examining agency or official of another state or agency of the federal government.
(c) The commissioner may promulgate rules and regulations the commissioner deems necessary to the proper administration of this act to require a health maintenance organization or medicare provider organization, subsequent to receiving its certificate of authority to submit the information, modifications or amendments to the items described in subsection (b) to the commissioner prior to the effectuation of the modification or amendment or to require the health maintenance organization to indicate the modifications to the commissioner. Any modification or amendment for which the approval of the commissioner is required shall be deemed approved unless disapproved within 30 days, except the commissioner may postpone the action for such further time, not exceeding an additional 30 days, as necessary for proper consideration.
History: L. 1974, ch. 181, § 3; L. 1976, ch. 280, § 22; L. 1985, ch. 208, § 3; L. 1988, ch. 162, § 1; L. 1996, ch. 169, § 7; L. 1997, ch. 13, § 1; L. 1998, ch. 174, § 14; July 1.
(b) The commissioner shall, within 60 days after the receipt of a completed application and any prescribed fees, issue a certificate of authority to any person filing such application if the commissioner finds that:
(1) The persons responsible for the conduct of the affairs of the applicant are competent, trustworthy and possess good reputations;
(2) any deficiencies identified by the commissioner in the application have been corrected;
(3) the health maintenance organization or medicare provider organization will effectively provide or arrange for the provision of basic health care services on a prepaid basis, through insurance or otherwise except to the extent of reasonable requirements for copayments and/or deductibles; and
(4) in the case of a health maintenance organization, that the health maintenance organization is in compliance with K.S.A. 40-3227 and amendments thereto and in the case of a medicare provider organization, that the medicare provider organization is in compliance with such deposit or solvency requirements as the commissioner may establish by rules and regulations.
History: L. 1974, ch. 181, § 4; L. 1996, ch. 169, § 8; L. 1998, ch. 174, § 15; July 1.
History: L. 1974, ch. 181, §§ 5, 6; Repealed, L. 1997, ch. 24, § 7; July 1.
Upon the request of the commissioner, a representative of the secretary of health and environment who is licensed to practice medicine and surgery shall be in attendance at the hearing and shall participate in the proceedings. Recommendations received pursuant to this subsection may be rejected or accepted in full or in part by the commissioner. Nothing in this subsection shall be construed to limit or modify in any way the authority given by the provisions of this act to the commissioner to deny, suspend or revoke a certificate or to levy an administrative penalty in lieu of suspension or revocation.
History: L. 1974, ch. 181, § 7; L. 1975, ch. 462, § 51; L. 1986, ch. 318, § 43; L. 1988, ch. 356, § 117; L. 1998, ch. 174, § 16; July 1.
(1) The purchase, lease, construction, renovation, operation, or maintenance of hospitals, medical facilities, or both, and their ancillary equipment, and such property as may reasonably be required for its principal office or for such other purposes as are necessary in the transaction of the business of the organization;
(2) the furnishing of health care services through providers which are under contract with or employed by the health maintenance organization;
(3) the contracting with any person for the performance on its behalf of certain functions such as marketing, enrollment and administration;
(4) the contracting with an insurance company licensed in this state, or with a hospital or medical service corporation or dental service corporation authorized to do business in this state, for the provision of insurance, indemnity or reimbursement against the cost of health care services provided by the health maintenance organization;
(5) the offering, in addition to health care services, of indemnity benefits covering out-of-area or emergency services; and
(6) receiving and accepting from governmental or private agencies payments covering all or part of the cost of the services provided or arranged for by the organization.
(b) Health maintenance organizations shall provide in their arrangements with all contracting parties and providers that if there be valid medicaid coverage, providing benefits for the same loss or condition, the medicaid coverage shall be the source of last resort of any provider payment.
History: L. 1974, ch. 181, § 8; L. 1993, ch. 132, § 8; L. 1998, ch. 174, § 17; July 1.
(1) A complete description of the health care services and other benefits to which the enrollee is entitled;
(2) The locations of all facilities, the hours of operation and the services which are provided in each facility in the case of individual practice associations or medical staff and group practices, and, in all other cases, a list of providers by specialty with a list of addresses and telephone numbers;
(3) the financial responsibilities of the enrollee and the amount of any deductible, copayment or coinsurance required;
(4) all exclusions and limitations on services or any other benefits to be provided including any deductible or copayment feature and all restrictions relating to pre-existing conditions;
(5) all criteria by which an enrollee may be disenrolled or denied reenrollment;
(6) service priorities in case of epidemic, or other emergency conditions affecting demand for medical services;
(7) in the case of a health maintenance organization, a provision that an enrollee or a covered dependent of an enrollee whose coverage under a health maintenance organization group contract has been terminated for any reason but who remains in the service area and who has been continuously covered by the health maintenance organization or under any group policy providing similar benefits which it replaces for at least three months immediately prior to termination shall be entitled to obtain a converted contract or have such coverage continued under the group contract for a period of six months following which such enrollee or dependent shall be entitled to obtain a converted contract in accordance with the provisions of this section. The converted contract shall provide coverage at least equal to the conversion coverage options generally available from insurers or mutual nonprofit hospital and medical service corporations in the service area at the applicable premium cost. The group enrollee or enrollees shall be solely responsible for paying the premiums for the alternative coverage. The frequency of premium payment shall be the frequency customarily required by the health maintenance organization, mutual nonprofit hospital and medical service corporation or insurer for the policy form and plan selected, except that the insurer, mutual nonprofit hospital and medical service corporation or health maintenance organization shall require premium payments at least quarterly. The coverage shall be available to all enrollees of any group without medical underwriting. The requirement imposed by this subsection shall not apply to a contract which provides benefits for specific diseases or for accidental injuries only, nor shall it apply to any employee or member or such employee's or member's covered dependents when:
(A) Such person was terminated for cause as permitted by the group contract approved by the commissioner;
(B) any discontinued group coverage was replaced by similar group coverage within 31 days; or
(C) the employee or member is or could be covered by any other insured or noninsured arrangement which provides expense incurred hospital, surgical or medical coverage and benefits for individuals in a group under which the person was not covered prior to such termination. Written application for the converted contract shall be made and the first premium paid not later than 31 days after termination of the group coverage or receipt of notice of conversion rights from the health maintenance organization, whichever is later, and shall become effective the day following the termination of coverage under the group contract. The health maintenance organization shall give the employee or member and such employee's or member's covered dependents reasonable notice of the right to convert at least once within 30 days of termination of coverage under the group contract. The group contract and certificates may include provisions necessary to identify or obtain identification of persons and notification of events that would activate the notice requirements and conversion rights created by this section but such requirements and rights shall not be invalidated by failure of persons other than the employee or member entitled to conversion to comply with any such provisions. In addition, the converted contract shall be subject to the provisions contained in paragraphs (2), (4), (5), (6), (7), (8), (9), (13), (14), (15), (16), (17) and (19) of subsection (j) of K.S.A. 40-2209, and amendments thereto;
(8) (A) group contracts shall contain a provision extending payment of such benefits until discharged or for a period not less than 31 days following the expiration date of the contract, whichever is earlier, for covered enrollees and dependents confined in a hospital on the date of termination;
(B) a provision that coverage under any subsequent replacement contract that is intended to afford continuous coverage will commence immediately following expiration of any prior contract with respect to covered services not provided pursuant to subparagraph (8)(A); and
(9) an individual contract shall provide for a 10-day period for the enrollee to examine and return the contract and have the premium refunded, but if services were received by the enrollee during the 10-day period, and the enrollee returns the contract to receive a refund of the premium paid, the enrollee must pay for such services.
(b) No health maintenance organization or medicare provider organization authorized under this act shall contract with any provider under provisions which require enrollees to guarantee payment, other than copayments and deductibles, to such provider in the event of nonpayment by the health maintenance organization or medicare provider organization for any services which have been performed under contracts between such enrollees and the health maintenance organization or medicare provider organization. Further, any contract between a health maintenance organization or medicare provider organization and a provider shall provide that if the health maintenance organization or medicare provider organization fails to pay for covered health care services as set forth in the contract between the health maintenance organization or medicare provider organization and its enrollee, the enrollee or covered dependents shall not be liable to any provider for any amounts owed by the health maintenance organization or medicare provider organization. If there is no written contract between the health maintenance organization or medicare provider organization and the provider or if the written contract fails to include the above provision, the enrollee and dependents are not liable to any provider for any amounts owed by the health maintenance organization or medicare provider organization. Any action by a provider to collect or attempt to collect from a subscriber or enrollee any sum owed by the health maintenance organization to a provider shall be deemed to be an unconscionable act within the meaning of K.S.A. 50-627 and amendments thereto.
(c) No group or individual certificate of coverage or contract form or amendment to an approved certificate of coverage or contract form shall be issued unless it is filed with the commissioner. Such contract form or amendment shall become effective within 30 days of such filing unless the commissioner finds that such contract form or amendment does not comply with the requirements of this section.
(d) Every contract shall include a clear and understandable description of the health maintenance organization's or medicare provider organization's method for resolving enrollee grievances.
(e) The provisions of subsections (A), (B), (C), (D) and (E) of K.S.A. 40-2209 and 40-2215 and amendments thereto shall apply to all contracts issued under this section, and the provisions of such sections shall apply to health maintenance organizations.
(f) In lieu of any of the requirements of subsection (a), the commissioner may accept certificates of coverage issued by a medicare provider organization in conformity with requirements imposed by any appropriate federal regulatory agency.
History: L. 1974, ch. 181, § 9; L. 1988, ch. 163, § 1; L. 1990, ch. 172, § 1; L. 1991, ch. 137, § 1; L. 1991, ch. 134, § 10; L. 1992, ch. 196, § 3; L. 1993, ch. 231, § 3; L. 1996, ch. 169, § 9; L. 1997, ch. 190, § 4; L. 1998, ch. 174, § 18; L. 2000, ch. 147, § 38; L. 2006, ch. 124, § 9; July 1.
History: L. 1974, ch. 181, § 9; L. 1988, ch. 162, § 2; Repealed, L. 1990, ch. 172, § 2; July 1.
History: L. 1974, ch. 181, § 10; L. 1991, ch. 134, § 11; L. 1998, ch. 174, § 19; July 1.
(b) At least once every three years and at such other times as the commissioner may require, a health maintenance organization or medicare provider organization shall obtain an on-site quality of care assessment by an independent quality review organization acceptable to the commissioner for the purpose of evaluating levels of health care delivery according to industry standards as prevailing from time to time. The findings of said independent quality review organization shall be expressed by it in a written opinion relating to the general quality of care provided by the health maintenance organization or medicare provider organization and its related contractors of health care services. Failure to obtain such quality of care assessment or the rendering of an unfavorable opinion by the independent quality review organization shall give the commissioner cause to institute action in accordance with K.S.A. 40-3205, 40-3206 or 40-3207, and amendments thereto.
(c) Every health maintenance organization or medicare provider organization and any of the medicare provider organization providers shall submit its books and records relating its operation to such examinations. Medical records of individuals and records of providers under a contract to the health maintenance organization or medicare provider organization shall be subject to such examination, but the identity of patients shall not be disclosed in any report to the commissioner or the commissioner's agents or representatives. For the purpose of examinations, the commissioner may administer oaths to, and examine the officers and agents of the health maintenance organization or medicare provider organization and the principals of such providers.
(d) The fees and expenses of examinations under this section shall be assessed against the organization being examined and remitted to the commissioner. The fees and expenses of the commissioner shall be in accordance with K.S.A. 40-223, and amendments thereto.
(e) In lieu of such examination, the commissioner may accept the report of an examination made by the appropriate examining agency or official of another state or agency of the federal government.
History: L. 1974, ch. 181, § 11; L. 1975, ch. 462, § 52; L. 1987, ch. 175, § 1; L. 1998, ch. 174, § 20; July 1.
History: L. 1974, ch. 181, § 12; July 1.
(1) For filing an application for a certificate of authority, $150;
(2) For filing each annual report, $50;
(3) For filing an amendment to the certificate of authority, $10.
(b) Every health maintenance organization subject to this act which has operated for a period of three years but not more than five years shall pay annually to the commissioner at the time such organization files its annual report a privilege fee in an amount equal to one-half of one per cent (.005) per annum of the total of all premiums, subscription charges or any other term which may be used to describe the charges made by such organization to enrollees; and after operating for a period of more than five years from the time of organization a health maintenance organization shall pay annually to the commissioner at the time such organization files its annual report, a privilege fee in an amount equal to 1% per annum of the total of all premiums, subscription charges or any other term which may be used to describe the charges made by such organization to enrollees. In such computations all such organizations shall be entitled to deduct therefrom any premiums or subscription charges returned on account of cancellations and dividends returned to enrollees. If the commissioner shall determine at any time that the application of the privilege fee would cause a denial of, reduction in or elimination of federal financial assistance to the state or to any health maintenance organization subject to this act, the commissioner is hereby authorized to terminate the operation of such privilege fee.
(c) For the purpose of insuring the collection of the privilege fee provided for by subsection (b), every health maintenance organization subject to this act and required by subsection (b) to pay such privilege fee shall at the time it files its annual report, as required by K.S.A. 40-3220, and amendments thereto, make a return, generated by or at the direction of its chief officer or principal managing director, under penalty of K.S.A. 21-3711, and amendments thereto, to the commissioner, stating the amount of all premiums, assessments and charges received by the health maintenance organization, whether in cash or notes, during the year ending on the last day of the preceding calendar year. Upon the receipt of such returns the commissioner of insurance shall verify the same and assess the fees upon such organization on the basis and at the rate provided herein and such fees shall thereupon become due and payable.
(d) Premiums or other charges received by an insurance company from the operation of a health maintenance organization subject to this act shall not be subject to any fee or tax imposed under the provisions of K.S.A. 40-252, and amendments thereto.
(e) Fees charged under this section shall be remitted to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the state general fund.
History: L. 1974, ch. 181, § 13; L. 1980, ch. 140, § 1; L. 1998, ch. 174, § 21; L. 2001, ch. 5, § 124; L. 2007, ch. 122, § 5; July 1.
Solicitation of enrollees by a duly certificated health maintenance organization or medicare provider organization or its representatives shall not be construed to be a violation of any provisions of law relating to solicitation or advertising by health professionals. A list of locations of services and a list of providers who have current agreements with the health maintenance organization may be made available to prospective enrollees, and shall be made available to prospective enrollees upon request.
Nothing in any professional practices act of any provider shall be construed to prohibit a provider from being employed by or under contract to provide health care services for a health maintenance organization or medicare provider organization granted a certificate of authority under the provisions of this act.
Any health maintenance organization authorized under this act shall not be deemed to be practicing any act for which a provider is licensed and shall be exempt from laws relating to the practice of any act for which a provider is licensed.
History: L. 1974, ch. 181, § 14; L. 1980, ch. 141, § 1; L. 1998, ch. 174, § 22; July 1.
History: L. 1974, ch. 181, § 15; L. 1998, ch. 174, § 23; July 1.
History: L. 1974, ch. 181, § 16; July 1.
History: L. 1974, ch. 181, § 17; July 1.
History: L. 1974, ch. 181, § 18; July 1.
History: L. 1974, ch. 181, § 19; L. 1998, ch. 174, § 24; July 1.
(a) A financial statement of the organization, including its balance sheet and receipts and disbursements for the preceding year; and
(b) such other information relating to the performance of health maintenance organizations as shall be required by the commissioner. Every health maintenance organization and medicare provider organization authorized under this act shall be subject to the provisions of K.S.A. 40-225 and amendments thereto.
History: L. 1974, ch. 181, § 20; L. 1998, ch. 174, § 25; L. 2000, ch. 147, § 39; July 1.
History: L. 1974, ch. 181, § 21; L. 1998, ch. 174, § 26; July 1.
History: L. 1974, ch. 181, § 22; July 1.
(b) Health maintenance organizations providing or arranging for services exclusively on a group contract basis may limit the open enrollment provided for in subsection (a) to all members of the group or groups covered by such contracts.
History: L. 1974, ch. 181, § 23; July 1.
History: L. 1974, ch. 181, § 24; July 1.
(b) A health maintenance organization shall maintain in force a fidelity bond or fidelity insurance on such employees and officers, directors and partners in the amount not less than $250,000 for each health maintenance organization or a maximum of $5,000,000 in aggregate maintained on behalf of health maintenance organizations owned by a common parent corporation, or such sum as may be prescribed by the commissioner.
History: L. 1974, ch. 181, § 25; L. 1996, ch. 169, § 10; L. 1998, ch. 174, § 27; July 1.
(b) Upon the express request of the enrollee, a complete record of any data or information pertaining to the diagnosis, treatment or health of such enrollee obtained from such person or from any provider by any health maintenance organization shall be provided to another health care provider designated by such enrollee when such enrollee is no longer an enrollee of such health maintenance organization.
History: L. 1974, ch. 181, § 26; L. 1994, ch. 81, § 2; July 1.
(b) Except as provided in subsections (c) and (d) of this section, every health maintenance organization shall maintain a minimum net worth equal to the greater of:
(1) $1,000,000; or
(2) two percent of annual premium revenues as reported on the most recent annual financial statement filed with the commissioner on the first $150,000,000 of premium and 1% of annual premium on the premium in excess of $150,000,000; or
(3) an amount equal to the sum of three months uncovered health care expenditures as reported on the most recent financial statement filed with the commissioner; or
(4) an amount equal to the sum of:
(A) Eight percent of annual health care expenditures except those paid on a capitated basis or managed hospital payment basis as reported on the most recent financial statement filed with the commissioner; and
(B) four percent of annual hospital expenditures paid on a managed hospital payment basis as reported on the most recent financial statement filed with the commissioner.
(c) A health maintenance organization licensed on or before the day preceding the effective date of this section must maintain a minimum net worth of:
(1) Twenty-five percent of the amount required by subsection (b) by December 31, 2000;
(2) 50% of the amount required by subsection (b) by December 31, 2001;
(3) 75% of the amount required by subsection (b) by December 31, 2002; and
(4) 100% of the amount required by subsection (b) by December 31, 2003.
(d) In determining net worth, no debt shall be considered fully subordinated unless the subordination clause is in a form acceptable to the commissioner. An interest obligation relating to the repayment of any subordinated debt shall be similarly subordinated. The interest expenses relating to the repayment of a fully subordinated debt shall be considered covered expenses. A debt incurred by a note meeting the requirements of this section, and otherwise acceptable to the commissioner, shall not be considered a liability and shall be recorded as equity.
(e) The net worth requirements of subsections (a) through (d) shall not apply to any health organization contracting with the Kansas department of social and rehabilitation services to provide services provided under title XIX and title XXI of the social security act or any other public benefits, provided the public benefit contracts represent at least 90% of the premium volume of the health organization.
(f) Unless otherwise provided below, each health maintenance organization doing business in this state shall deposit with any organization or trustee acceptable to the commissioner through which a custodial or controlled account is utilized, cash, securities or any combination of these or other measures, for the benefit of all of the enrollees of the health maintenance organization, that are acceptable in the amount of $150,000 for a medical group or staff model health maintenance organization or $300,000 for an individual practice association.
(g) The commissioner may waive any of the deposit requirements set forth in subsection (f) whenever satisfied that: (1) The organization has sufficient net worth and an adequate history of generating net income to assure its financial viability for the next year; or (2) the organization's performance and obligations are guaranteed by an organization with sufficient net worth and an adequate history of generating net income; or (3) the assets of the organization or its contracts with insurers, hospital or medical service corporations, governments or other organizations are reasonably sufficient to assure the performance of its obligations.
(h) The deposit requirements imposed by this act shall not apply to health maintenance organizations not organized under the laws of this state to the extent an amount equal to or exceeding that required by this act has been deposited with the commissioner or an organization or trustee acceptable to the department of insurance of its state of domicile for the benefit of Kansas enrollees.
(i) All income from deposits shall belong to the depositing organization and shall be paid to it as it becomes available. A health maintenance organization that has made a securities deposit may withdraw that deposit or any part thereof after making a substitute deposit of cash, securities or any combination of these or other measures of equal amount and value. Any securities shall be approved by the commissioner before being substituted.
(j) Every health maintenance organization, when determining liability, shall include an amount estimated in the aggregate to provide for any unearned premium and for the payment of all claims for health care expenditures that have been incurred, whether reported or unreported, that are unpaid and for which the organization is or may be liable, and to provide for the expense of adjustment or settlement of those claims.
(k) The commissioner shall require that each health maintenance organization have a plan for handling insolvency which allows for continuation of benefits for the duration of the contract period for which premiums have been paid and continuation of benefits to members who are confined on the date of insolvency in an inpatient facility until their discharge or expiration of benefits. In considering such a plan, the commissioner may require:
(1) Insurance to cover the expenses to be paid for continued benefits after an insolvency;
(2) provisions in provider contracts that obligate the provider to provide services for the duration of the period after the health maintenance organization's insolvency for which premium payment has been made and until the enrollees' discharge from inpatient facilities;
(3) insolvency reserves;
(4) acceptable letters of credit; or
(5) any other arrangements to assure that benefits are continued as specified in this subsection (k).
History: L. 1984, ch. 176, § 2; L. 1988, ch. 162, § 3; L. 1996, ch. 169, § 11; L. 2000, ch. 147, § 40; July 1.
(a) The definition of a grievance;
(b) how, where and to whom the enrollee should file such enrollee's grievance; and
(c) that upon receiving notification of a grievance related for payment of a bill for medical services, the health maintenance organization shall:
(1) Acknowledge receipt of the grievance in writing within 10 working days unless it is resolved within that period of time;
(2) conduct a complete investigation of the grievance within 20 working days after receipt of a grievance, unless the investigation cannot be completed within this period of time. If the investigation cannot be completed within 20 working days after receipt of a grievance, the enrollee shall be notified in writing within 30 working days time, and every 30 working days after that, until the investigation is completed. The notice shall state the reasons for which additional time is needed for the investigation;
(3) have within five working days after the investigation is completed, someone not involved in the circumstances giving rise to the grievance or its investigation decide upon the appropriate resolution of the grievance and notify the enrollee in writing of the decision of the health maintenance organization regarding the grievance and of any right to appeal. The notice shall explain the resolution of the grievance and any right to appeal. The notice shall explain the resolution of the grievance in terms which are clear and specific; and
(4) notify, if the health maintenance organization has established a grievance advisory panel, the enrollee of the enrollee's right to request the grievance advisory panel to review the decision of the health maintenance organization. This notice shall indicate that the grievance advisory panel is not obligated to conduct the review. This provision shall also state how, where and when the enrollee should make such enrollee's request for this review.
History: L. 1996, ch. 169, § 12; July 1.
(b) A health maintenance organization shall not base its denial of payment for emergency medical services solely on the failure of the enrollee to receive authorization prior to receiving the emergency medical service. The enrollee must notify the health maintenance organization of receipt of medical services for emergency conditions within 24 hours or as soon after that as is reasonably possible. Nothing shall require the health maintenance organization to authorize payment for any services provided during that 24 hour period, regardless of medical necessity, if those services do not otherwise constitute benefits under the certificate of coverage approved by the commissioner.
(c) If the participating provider is responsible for seeking prior authorization from the health maintenance organization before receiving payment for the treatment of emergency medical conditions and the enrollee is eligible at the time when covered services are provided, then the enrollee will not be held financially responsible for payment for covered services if the prior authorization for emergency medical services has not been sought and received, other than for what the enrollee would otherwise be responsible, such as copayments and deductibles.
(d) All disputes between an enrollee and a health maintenance organization arising under the provisions of this section shall be resolved by means of the grievance procedures established by the health maintenance organization.
History: L. 1996, ch. 169, § 13; July 1.
History: L. 1996, ch. 169, § 14; July 1.
(b) The deposit required under this section shall be in addition to the deposit required under K.S.A. 40-3227, and amendments thereto, and shall be deemed to be an admitted asset of the health maintenance organization in the determination of such health maintenance organization's net worth. All income from deposits or trust accounts shall be deemed to be assets of the health maintenance organization and may be withdrawn from the deposit or account quarterly with the approval of the commissioner.
(c) A health maintenance organization that has made a deposit may withdraw that deposit or any part of the deposit if: (1) A substitute deposit of cash or securities of equal amount and value is made; (2) the fair market value of such substitute deposit exceeds the amount of the required deposit; or (3) the deposit required under subsection (a) is reduced or eliminated. Deposits, substitutions or withdrawals may be made only with the prior written approval of the commissioner.
(d) The deposit required under this section shall be held in trust and may be used only as provided under this section. The commissioner may use all or any portion of the deposit of an insolvent health maintenance organization for administrative costs associated with administering such deposit and the payment of any claim of an enrollee of this state for uncovered expenditures in this state. Each claim for uncovered expenditures shall be paid on a pro rata basis based on assets available to pay the ultimate liability for incurred expenditures. A partial distribution may be made pending final distribution. Any amount of such deposit remaining shall be paid into the liquidation or receivership of the health maintenance organization.
(e) The commissioner by regulation may prescribe the time, manner and form for filing claims under subsection (d).
(f) The commissioner by regulation or order may require health maintenance organizations to file annual, quarterly or more frequent reports deemed necessary to demonstrate compliance with this section. The commissioner may require that the reports include liability for uncovered expenditures as well as an audit opinion.
(g) The deposit required under this section may be satisfied through other arrangement acceptable to the commissioner including parental guarantees and letters of credit.
(h) The commissioner may adopt rules and regulations to implement this section.
History: L. 2000, ch. 147, § 32; July 1.
(b) Any individual or enrollee who has health insurance coverage involuntarily terminated because of the insolvency of such individual's or enrollee's health maintenance organization shall be treated as the equivalent of a federally defined eligible individual for the purposes of the Kansas uninsurable health insurance plan act, K.S.A. 40-2117 et seq. and amendments thereto.
History: L. 2000, ch. 147, § 33; July 1.
(b) For purpose of determining the priority of distribution of general assets, any claim of any enrollee or enrollees' beneficiary shall have the same priority as established by K.S.A. 40-3641, and amendments thereto, for policyholders and beneficiaries of insureds of insurance companies. If an enrollee is liable to a nonparticipating provider for services provided pursuant to and covered by the health maintenance organization, such liability shall have the status of such enrollee's claim for distribution of general assets. A provider who is obligated by statute or agreement to hold any enrollee harmless from liability for services provided pursuant to and covered by a health maintenance organization shall have a priority of distribution of the general assets immediately following that of enrollees and enrollees' beneficiaries as described herein, and immediately preceding the priority of distribution described in subsection (d) of K.S.A. 40-3641 and amendments thereto.
History: L. 2000, ch. 147, § 34; July 1.
(1) Reduce the total amount of present and potential liability for benefits by reinsurance or other method acceptable to the commissioner;
(2) reduce the volume of any new business being accepted;
(3) reduce expenses by specified methods acceptable to the commissioner;
(4) suspend or limit the writing of any new business for a period of time;
(5) increase the health maintenance organization's capital and surplus by contribution; or
(6) take such other steps the commissioner may deem appropriate under the circumstances.
(b) The commissioner may adopt rules and regulations which set uniform standards and criteria for early warning that the continued operation of any health maintenance organization might be hazardous to its enrollees, creditors or the general public and set standards for evaluating the financial condition of any health maintenance organization.
History: L. 2000, ch. 147, § 35; July 1.
History: L. 2000, ch. 147, § 36; July 1.