(a) (1) This section shall apply to Medicare Select contracts, as defined in this section.
(2) A contract shall not be advertised as a Medicare Select contract unless it meets the requirements of this section.
(b) For the purposes of this section:
(1) “Complaint” means any dissatisfaction expressed by an individual concerning a Medicare Select issuer or its network providers.
(2) “Grievance” means dissatisfaction expressed in writing by an individual covered by a Medicare Select contract with the administration, claims practices, or provision of services concerning a Medicare Select issuer or its network providers.
(3) “Medicare Select issuer” means an issuer offering, or seeking to offer, a Medicare Select contract.
(4) “Medicare Select contract” means a Medicare supplement contract that contains restricted network provisions.
(5) “Network provider” means a provider of health care, or a group of providers of health care, which has entered into a written agreement with the issuer to provide benefits covered under a Medicare Select contract. “Provider network” means a grouping of network providers.
(6) “Restricted network provision” means any provision which conditions the payment of benefits, in whole or in part, on the use of network providers.
(7) “Service area” means the geographic area approved by the director within which an issuer is authorized to offer a Medicare Select contract.
(c) The director may authorize an issuer to offer a Medicare Select contract pursuant to Section 4358 of the federal Omnibus Budget Reconciliation Act (OBRA) of 1990 if the director finds that the issuer’s Medicare Select contracts are in compliance with this chapter and if the director finds that the issuer has satisfied all of the requirements of this section.
(d) A Medicare Select issuer shall not issue a Medicare Select contract in this state until its plan of operation has been approved by the director.
(e) A Medicare Select issuer shall file a proposed plan of operation with the director in a format prescribed by the director. The plan of operation shall contain at least the following information:
(1) Evidence that all covered services that are subject to restricted network provisions are available and accessible through network providers, including a demonstration of all of the following:
(A) That services can be provided by network providers with reasonable promptness with respect to geographic location, hours of operation, and afterhour care. The hours of operation and availability of afterhour care shall reflect usual practice in the local area. Geographic availability shall reflect the usual travel times within the community.
(B) That the number of network providers in the service area is sufficient, with respect to current and expected enrollees, as to either of the following:
(i) To deliver adequately all services that are subject to a restricted network provision.
(ii) To make appropriate referrals.
(C) There are written agreements with network providers describing specific responsibilities.
(D) Emergency care is available 24 hours per day and seven days per week.
(E) In the case of covered services that are subject to a restricted network provision and are provided on a prepaid basis, that there are written agreements with network providers prohibiting the providers from billing or otherwise seeking reimbursement from or recourse against any individual covered under a Medicare Select contract.
This subparagraph shall not apply to supplemental charges or coinsurance amounts as stated in the Medicare Select contract.
(2) A statement or map providing a clear description of the service area.
(3) A description of the grievance procedure to be utilized.
(4) A description of the quality assurance program, including all of the following:
(A) The formal organizational structure.
(B) The written criteria for selection, retention, and removal of network providers.
(C) The procedures for evaluating quality of care provided by network providers, and the process to initiate corrective action when warranted.
(5) A list and description, by specialty, of the network providers.
(6) Copies of the written information proposed to be used by the issuer to comply with subdivision (i).
(7) Any other information requested by the director.
(f) (1) A Medicare Select issuer shall file any proposed changes to the plan of operation, except for changes to the list of network providers, with the director prior to implementing the changes. Changes shall be considered approved by the director after 30 days unless specifically disapproved.
(2) An updated list of network providers shall be filed with the director at least quarterly.
(g) A Medicare Select contract shall not restrict payment for covered services provided by nonnetwork providers if:
(1) The services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury, or condition.
(2) It is not reasonable to obtain services through a network provider.
(h) A Medicare Select contract shall provide payment for full coverage under the contract for covered services that are not available through network providers.
(i) A Medicare Select issuer shall make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare Select contract to each applicant. This disclosure shall include at least the following:
(1) An outline of coverage sufficient to permit the applicant to compare the coverage and charges of the Medicare Select contract with both of the following:
(A) Other Medicare supplement contracts offered by the issuer.
(B) Other Medicare Select contracts.
(2) A description, including address, telephone number, and hours of operation, of the network providers, including primary care physicians, specialty physicians, hospitals, and other providers.
(3) A description of the restricted network provisions, including payments for coinsurance and deductibles when providers other than network providers are utilized. The description shall inform the applicant that expenses incurred when using out-of-network providers are excluded from the out-of-pocket annual limit in benefit plans K and L, unless the contract provides otherwise.
(4) A description of coverage for emergency and urgently needed care and other out-of-service area coverage.
(5) A description of limitations on referrals to restricted network providers and to other providers.
(6) A description of the enrollee’s rights to purchase any other Medicare supplement contract otherwise offered by the issuer.
(7) A description of the Medicare Select issuer’s quality assurance program and grievance procedure.
(j) Prior to the sale of a Medicare Select contract, a Medicare Select issuer shall obtain from the applicant a signed and dated form stating that the applicant has received the information provided pursuant to subdivision (i) and that the applicant understands the restrictions of the Medicare Select contract.
(k) A Medicare Select issuer shall have and use procedures for hearing complaints and resolving written grievances from the enrollees. The procedures shall be aimed at mutual agreement for settlement and may include arbitration procedures.
(1) The grievance procedure shall be described in the contract and in the outline of coverage.
(2) At the time the contract is issued, the issuer shall provide detailed information to the enrollee describing how a grievance may be registered with the issuer.
(3) Grievances shall be considered in a timely manner and shall be transmitted to appropriate decisionmakers who have authority to fully investigate the issue and take corrective action.
(4) If a grievance is found to be valid, corrective action shall be taken promptly.
(5) All concerned parties shall be notified about the results of a grievance.
(6) The issuer shall report no later than each March 31st to the director regarding its grievance procedure. The report shall be in a format prescribed by the director and shall contain the number of grievances filed in the past year and a summary of the subject, nature, and resolution of those grievances.
(l) At the time of initial purchase, a Medicare Select issuer shall make available to each applicant for a Medicare Select contract the opportunity to purchase any Medicare supplement contract otherwise offered by the issuer.
(m) (1) At the request of an enrollee under a Medicare Select contract, a Medicare Select issuer shall make available to the enrollee the opportunity to purchase a Medicare supplement contract offered by the issuer that has comparable or lesser benefits and that does not contain a restricted network provision, if a Medicare supplement contract of that nature is offered by the issuer. The issuer shall make the contracts available without regard to the health status of the enrollee and without requiring evidence of insurability after the Medicare Select contract has been in force for six months.
(2) For the purposes of this subdivision, a Medicare supplement contract will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select contract being replaced. For the purposes of this paragraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services, or coverage for Medicare Part B excess charges.
(n) Medicare Select contracts shall provide for continuation of coverage in the event the secretary determines that Medicare Select contracts issued pursuant to this section should be discontinued due to either the failure of the Medicare Select program to be reauthorized under law or its substantial amendment.
(1) Each Medicare Select issuer shall make available to each enrollee covered by a Medicare Select contract the opportunity to purchase any Medicare supplement contract offered by the issuer that has comparable or lesser benefits and that does not contain a restricted provider network provision, if a Medicare supplement contract of that nature is offered by the issuer. The issuer shall make the contracts available without regard to the health status of the enrollee and without requiring evidence of insurability after the Medicare Select contract has been in force for six months.
(2) For the purposes of this subdivision, a Medicare supplement contract will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select contract being replaced. For the purposes of this paragraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services, or coverage for Medicare Part B excess charges.
(o) An issuer offering Medicare Select contracts shall comply with reasonable requests for data made by state or federal agencies, including the United States Department of Health and Human Services, for the purpose of evaluating the Medicare Select program. An issuer shall not issue a Medicare Select contract in this state until the contract has been approved by the director.
(Amended by Stats. 2005, Ch. 206, Sec. 6. Effective January 1, 2006.)