Prepaid Limited Health Service Contracts

1. Law
2. Tennessee Code
3. Insurance
4. Tennessee Prepaid Limited Health Service Organization Act of 2000
5. Prepaid Limited Health Service Contracts

1. Any entity issued a certificate of authority and otherwise in compliance with this chapter may enter into contracts in this state to provide an agreed-upon set of limited health services to subscribers in exchange for a prepaid per capita sum or a prepaid aggregate fixed sum from a health maintenance organization or a state or federal agency.
   1. The department shall disapprove any form filed under this subsection (a), or withdraw any previous approval of the form, if the form:
      1. Is in any respect in violation of, or does not comply with, this chapter or rule adopted under this chapter;
      2. Contains or incorporates by reference, where the incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses or exceptions and conditions that deceptively affect the risk purported to be assumed in the general coverage of the contract;
      3. Has any title, heading, or other indication of its provisions that is misleading;
      4. Is printed or otherwise reproduced in such a manner as to render any material provision of the form substantially illegible;
      5. Contains provisions that are unfair, inequitable, or contrary to the public policy of this state or that encourage misrepresentation; or
      6. Charges rates that are determined by the department to be inadequate, excessive, or unfairly discriminatory.
   2. It is not the intent of this subsection (a) to restrict unduly the right to modify rates in the exercise of reasonable business judgment.
   3. All contracts shall be for a minimum period of twelve (12) months, unless the contract holder requests, in writing, a shorter contract period.
2. Every prepaid limited health service organization shall provide each subscriber a contract, a certificate, membership card, or member handbook that must clearly state all of the services to which a subscriber is entitled under the contract and must include a clear and understandable statement of any limitations on the services or kinds of services to be provided, including any copayment feature or schedule of benefits required by the contract or by any insurer or entity that is underwriting any of the services offered by the prepaid limited health service organization. The contract, certificate, provider listing, or member handbook must also state where and in what manner the health services may be obtained.
3. The documents provided pursuant to subsection (b) must have a clear and understandable description of the method used by the prepaid limited health service organization for resolving subscriber grievances and must contain the address of the department and the department's toll-free consumer hotline.
4. All prepaid limited health service coverage, benefits, or services for a member of the family of the subscriber must, as to the family member's coverage, benefits, or services, provide also that the coverage, benefits, or services applicable for children will be provided with respect to a preenrolled newborn child of the subscriber, or covered family member of the subscriber, from the moment of birth, or adoption pursuant to state law.
5. No alteration of any written application for any prepaid limited health services contract may be made by any person other than the applicant without the applicant's written consent, except that insertions may be made by the prepaid limited health service organization for administrative purposes only, in a manner as to indicate clearly that the insertions are not to be ascribed to the applicant.
6. No contract may contain any waiver of rights or benefits provided to or available to subscribers under any law or rule applicable to prepaid limited health service organizations.
7. Each document provided pursuant to subsection (b) must state that emergency services, if any, will be provided to subscribers in emergency situations not permitting treatment through the prepaid limited health service organization providers, without prior notification to and approval of the organization. The prepaid limited health services document must contain a definition of emergency services, describe procedures for determination by the prepaid limited health service organization of whether the services qualify for reimbursement as emergency services, and contain specific examples of what does constitute an emergency.
8. 1. All prepaid limited health services contracts, certificates, and member handbooks must contain the following provision:

      “Grace Period: This contract has a (insert number of days, but not less than ten (10) days)  -day grace period. This provision means that if any required premium is not paid on or before the date it is due, it may be paid subsequently during the grace period. During the grace period, the contract will stay in force.”

   2. Subdivision (h)(1) does not apply to certificates or member handbooks delivered to individual subscribers under a group prepaid limited health services contract when the employer who will hold the contract on behalf of the subscriber group pays the entire premium for the individual subscriber. However, the required provision applies to the group prepaid limited health services contract.
9. The contract must clearly disclose the intent of the prepaid limited health service organization as to the applicability or nonapplicability of coverage to preexisting conditions. The contract must also disclose what services are excludable.
10. All prepaid limited health service organization contracts that provide coverage for a member of the family of the subscriber, must, as to the family member's coverage, provide that coverage, benefits, or services applicable for children will be provided with respect to an adopted child of the subscriber, which child is placed in compliance with state adoption law, from the moment of placement in the residence of the subscriber. In the case of a newborn child, coverage begins from the moment of birth if a written agreement to adopt the child has been entered into by the subscriber prior to the birth of the child whether or not the agreement is enforceable. However, coverage for the child is not required if the child is not ultimately adopted by the subscriber in compliance with state adoption law.
11. Each prepaid limited health service organization shall provide prospective enrollees, upon request, with written information about the terms and conditions of the plan in accordance with subsection (b) to enable prospective enrollees to make informed decisions about accepting a managed-care system of limited health care delivery. All marketing materials printed by the prepaid limited health services organization must contain a notice in boldfaced type that states that the information required under this section is available to prospective enrollees upon request.
12. Each prepaid limited health service organization shall make available to all subscribers, upon request, a description of the authorization and referral process for services or a description of the process used to analyze the qualifications and credentials of providers under contract with the organization.

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