A. A health insurer shall make reimbursement for direct services at a level not less than eighty-five percent of premiums across all health product lines, including short-term plans and excluding individually underwritten health insurance policies, contracts or plans, that are governed by the provisions of Chapter 59A, Article 22 NMSA 1978, the Health Maintenance Organization Law [Chapter 59A, Article 46 NMSA 1978] and the Nonprofit Health Care Plan Law [Chapter 59A, Article 47 NMSA 1978], and an excepted benefit policy intended to supplement major medical coverage, including medicare supplement, vision, dental, disease-specific, accident-only or hospital indemnity-only insurance policies, or a plan that only issues policies for long-term care or disability income. Reimbursement shall be made for direct services provided over the preceding three calendar years, but not earlier than calendar year 2010, as determined by reports filed with the office of superintendent of insurance. Nothing in this subsection shall be construed to preclude a purchaser from negotiating an agreement with a health insurer that requires a higher amount of premiums paid to be used for reimbursement for direct services for one or more products or for one or more years.
B. For individually underwritten health care policies, plans or contracts, the superintendent shall establish, after notice and informal hearing, the level of reimbursement for direct services, as determined by the reports filed with the office of superintendent of insurance, as a percent of premiums. Additional informal hearings may be held at the superintendent's discretion. In establishing the level of reimbursement for direct services, the superintendent shall consider the costs associated with the individual marketing and medical underwriting of these policies, plans or contracts at a level not less than seventy-five percent of premiums. A health insurer writing these policies shall make reimbursement for direct services at a level not less than that level established by the superintendent pursuant to this subsection over the three calendar years preceding the date upon which that rate is established, but not earlier than calendar year 2010. Nothing in this subsection shall be construed to preclude a purchaser of one of these policies, plans or contracts from negotiating an agreement with a health insurer that requires a higher amount of premiums paid to be used for reimbursement for direct services.
C. An insurer that fails to comply with the reimbursement requirements pursuant to this section shall issue a dividend or credit against future premiums to all policyholders in an amount sufficient to ensure that the benefits paid in the preceding three calendar years plus the amount of the dividends or credits are equal to the required direct services reimbursement level pursuant to Subsection A of this section for group health coverage and blanket health coverage or the required direct services reimbursement level pursuant to Subsection B of this section for individually underwritten health policies, contracts or plans for the preceding three calendar years. If the insurer fails to issue the dividend or credit in accordance with the requirements of this section, the superintendent shall enforce these requirements and may pursue any other penalties as provided by law, including general penalties pursuant to Section 59A-1-18 NMSA 1978.
D. After notice and hearing, the superintendent may adopt and promulgate reasonable rules necessary and proper to carry out the provisions of this section.
E. For the purposes of this section:
(1) "direct services" means services rendered to an individual by a health insurer or a health care practitioner, facility or other provider, including case management, disease management, health education and promotion, preventive services, quality incentive payments to providers and any portion of an assessment that covers services rather than administration and for which an insurer does not receive a tax credit pursuant to the Medical Insurance Pool Act [Chapter 59A, Article 54 NMSA 1978]; provided, however, that "direct services" does not include care coordination, utilization review or management or any other activity designed to manage utilization or services;
(2) "health insurer" means a person duly authorized to transact the business of health insurance in the state pursuant to the Insurance Code, including a person that issues a short-term plan and a person that only issues an excepted benefit policy intended to supplement major medical coverage, including medicare supplement, vision, dental, disease-specific, accident-only or hospital indemnity-only insurance policies, or that only issues policies for long-term care or disability income;
(3) "premium" means all income received from individuals and private and public payers or sources for the procurement of health coverage, including capitated payments, self-funded administrative fees, self-funded claim reimbursements, recoveries from third parties or other insurers and interests less any tax paid pursuant to the Insurance Premium Tax Act [7-40-1 to 7-40-10 NMSA 1978] and fees associated with participating in a health insurance exchange that serves as a clearinghouse for insurance; and
(4) "short-term plan" means a nonrenewable health benefits plan covering a resident of the state, regardless of where the plan is delivered, that:
(a) has a maximum specified duration of not more than three months after the effective date of the plan; and
(b) is issued only to individuals who have not been enrolled in a health benefits plan that provides the same or similar nonrenewable coverage from any health insurance carrier within the three months preceding enrollment in the short-term plan.
History: Laws 2010, ch. 94, § 1; 2013, ch. 74, § 26; 2018, ch. 57, § 20; 2019, ch. 235, § 8; 2019, ch. 235, § 9.
ANNOTATIONSThe second 2019 amendment, effective January 1, 2020, provided for short-term health and excepted benefit coverage; in Subsection A, after "product lines", deleted "except" and added "including short-term plans and excluding", and after "Nonprofit Health Care Plan Law", added "and an excepted benefit policy intended to supplement major medical coverage, including medicare supplement, vision, dental, disease-specific, accident-only or hospital indemnity-only insurance policies, or a plan that only issues policies for long-term care or disability income"; and in Subsection E, Paragraph E(2), after "Insurance Code", deleted "but does not include" and added "including a person that issues a short-term plan and", and after "that only issues", deleted "a limited-benefit" and added "an excepted benefit", and added Paragraph E(4).
The first 2019 amendment, effective June 14, 2019, provided for short-term health and excepted benefit coverage; in Subsection A, after "product lines", deleted "except" and added "including short-term plans and excluding", and after "Nonprofit Health Care Plan Law", added "and an excepted benefit policy intended to supplement major medical coverage, including medicare supplement, vision, dental, disease-specific, accident-only or hospital indemnity-only insurance policies, or a plan that only issues policies for long-term care or disability income"; and in Subsection E, Paragraph E(1), after "Medical Insurance Pool Act", deleted "or the Health Insurance Alliance Act", in Paragraph E(2), after "Insurance Code", deleted "but does not include" and added "including a person that issues a short-term plan and", and after "that only issues", deleted "a limited-benefit" and added "an excepted benefit", and added Paragraph E(4).
The 2018 amendment, effective January 1, 2020, revised the definitions of "direct services" and "premium" as used in this section; in Subsection E, Paragraph E(1), after "Medical Insurance Pool Act", deleted "or the Health Insurance Alliance Act", and in Paragraph E(3), after "interests less any", deleted "premium", and after "paid pursuant to", deleted "Section 59A-6-2 NMSA 1978" and added "the Insurance Premium Tax Act".
Temporary provisions. — Laws 2018, ch. 57, § 30 provided that:
A. On January 1, 2020, all personnel directly involved with the audit and collection of the taxes imposed pursuant to the New Mexico Insurance Code prior to the effective date of this act, functions, appropriations, money, records, furniture, equipment and other property of, or attributable to, the financial audit bureau of the office of superintendent of insurance shall be transferred to the taxation and revenue department.
B. On January 1, 2020, no contractual obligations of the office of superintendent of insurance shall be binding on the taxation and revenue department.
The 2013 amendment, effective March 29, 2013, required reports of direct services to be filed with the superintendent of insurance; in Subsection A, in the second sentence, after "reports filed with the", added "office of the superintendent of" and after "insurance", deleted "division of the commission"; and in Subsection B, in the first sentence, after "filed with the", added "office of the superintendent of" and after "insurance", deleted "division".