Concerning the Laws Regulation Health Maintenance Organization Benefit Contracts and Services in Colorado
See bold text below:
Section 1 Authority
This rule is promulgated and adopted by the Commissioner of Insurance under the authority of § 10-16-109, C.R.S.
Section 2 Scope and Purpose
The purpose of this regulation is to provide reasonable standards for the terms and provisions contained in Health Maintenance Organizations’ (“HMOs”) benefit contracts and evidences of coverage.
Section 3 Applicability and Scope
This regulation shall apply to all HMOs that are required to obtain or maintain a certificate of authority in this state. This regulation shall apply to all benefit contracts and evidences of coverage that are issued or renewed on or after the effective date of this regulation. In the event of conflict between the provisions of this regulation and the provisions of any earlier regulation issued by the Commissioner, the provisions of this regulation shall be controlling as to HMOs.
Section 4 Definitions
No contract or evidence of coverage delivered or issued for delivery to any person by an HMO required to obtain a certificate of authority in this state shall contain definitions respecting the matters set forth below and in § 10-16-102, C.R.S., unless such definitions comply with the requirements of this section. Definitions other than those set forth herein and in § 10-16-102, C.R.S., may be used as appropriate providing that they do not contradict these requirements. As used in this regulation and for the purpose of any terms used in a benefit contract of evidence of coverage:
A. “Copayment” means, for the purposes of this regulation, the predetermined amount, whether stated as a percentage or a fixed dollar, an enrollee must pay, to receive a specific service or benefit.
B. “Deductible” means, for the purposes of this regulation, the amounts to be paid by the enrollee for covered services, other than a co-payment, before the enrollee is entitled to benefits from a health benefit plan.
C. “Emergency services” means, for the purposes of this regulation, health care services provided in connection with any event that a prudent lay person would believe threatens his or her life or limb in such a manner that a need for immediate medical care is created to prevent death or serious impairment of health.
D. “Group” means, for the purposes of this regulation, a) a bona fide employer covering employees of such employer for the benefit of persons other than the employer; or b) an association, including a labor union, which has a constitution and bylaws and which is organized and maintained in good faith for purposes other than that of obtaining insurance.
E. “Group contract” means, for the purposes of this regulation, 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.
F. “Group contractholder” means, for the purposes of this regulation, the person to which a group contract has been issued.
G. “HMO service area” means, for the purposes of this regulation, the geographical area within which the HMO is authorized to provide or arrange for health care services that are available and accessible to enrollees and may include contracted providers physically located across state or county lines.
H. “Individual contract” or “nongroup contract” means, for the purposes of this regulation, a contract for health care services issued to and covering an individual or a family that is not a group.
I. “Out-of-area services” means, for the purposes of this regulation, the health care services that an HMO covers when its enrollees are outside of the enrollee service area.
J. “Point-of-service plan contract” means, for the purposes of this regulation, a Health Maintenance Organization contract which includes coverage for both in-network services and coverage for services provided by non-contracted providers. The term “point-of-service plan contract” shall also apply to a plan contract where the indemnity coverage or service is underwritten by a non-HMO carrier in this state and is offered in conjunction with an HMO contract.
K. “Primary care physician” means, for the purposes of this regulation, a physician designated by the enrollee, subject to the policies and procedures of the HMO, who supervises, coordinates, and provides initial and basic care to members, initiates their referral for specialist care and maintains continuity of patient care.
L. “Subscriber” means, for the purposes of this regulation, the individual whose employment or other status, except for family dependency, is the basis for eligibility for enrollment in the HMO.
M. “Supplemental health care services” means, for the purposes of this regulation, any health care services other than basic health care services as defined in § 10-16-102(4), C.R.S.
N. “Temporarily absent” means, for the purposes of this regulation, circumstances where the enrollee has left the HMO’s service area but intends to return within a reasonable period of time, such as a vacation trip.
O. “Urgently needed services” means, for the purposes of this regulation, covered services which enrollees require in order to prevent a serious deterioration in their health while they are temporarily absent from the enrollee’s service area.
P. “Variable Copayment” means, for the purposes of this regulation, a copayment that varies based on the enrollee’s use of certain providers.
Q. “Variable Deductible” means, for the purposes of this regulation, a deductible that varies based on the enrollee’s use of certain providers.
Section 5 Requirements for Benefit Contracts and Evidences of Coverage
Each enrollee shall be entitled to receive an individual contract and/or evidence of coverage. Each group contractholder shall be entitled to receive a group contract and/or evidence of coverage. Group contracts, individual contracts and evidences of coverage shall be delivered or issued for delivery to enrollees or group contractholders within a reasonable time after enrollment, but not more than fifteen working days from the later of the effective date of coverage or the date on which the HMO is notified of enrollment. The contract and/or evidence of coverage shall include the following:
A. HMO Information
The contract and/or evidence of coverage shall contain the name, address and telephone number of the HMO and shall describe how services may be obtained. A toll free or collect call phone number within the service area for calls, without charge to enrollees, to the HMO’s administrative office shall be made available and disseminated to enrollees to adequately provide telephone access for member services, problems or questions.
B. Entire Contract
The contract shall contain a statement that the contract, evidence of coverage, all applications and any amendments thereto shall constitute the entire agreement between the parties.
C. Term of coverage
1. The contract and/or evidence of coverage shall contain the time and date or occurrence upon which coverage takes effect and include any applicable waiting periods.
2. The contract and/or evidence of coverage shall contain the time and date or occurrence upon which coverage will terminate.
D. Benefits and Services within the HMO’s Service Area
The contract and/or evidence of coverage shall contain a specific description of benefits and services available within the HMO’s service area.
E. Emergency Care Services
The contract and/or evidence of coverage shall contain a specific description of emergency services available twenty-four hours a day, seven days a week, including disclosure of how emergency care services will be accessible within the HMO’s service area by affiliated providers and nonaffiliated providers.
F. Out of Area Benefits and Services
The contract and/or evidence of coverage shall contain a specific description of benefits and services available out of the HMO’s service area including situations where balance billing could apply, variable deductibles, variable copayments and notice if individuals may need to travel into the HMO’s service area to receive covered health benefits.
G. Cancellation or Termination
The contract and/or evidence of coverage shall contain the conditions upon which cancellation or termination may be effected by the HMO or the enrollee.
The contract and/or evidence of coverage shall contain the conditions for, and any restrictions upon, the enrollee’s right to renewal.
The contract and/or evidence of coverage shall contain the conditions for, and any restrictions upon, the enrollee’s right to reinstate.
The contract and/or evidence of coverage shall contain procedures for filing claims that include:
1. any required notice to the HMO;
2. if any claim forms are required, how, when and where to obtain and submit them;
3. any requirements for filing proper proofs of loss;
4. any time limit of payment of claims;
5. notice of any requirement for resolving disputed claims including arbitration; and
6. a statement of restrictions, if any, on assignment of sums payable to the enrollee by the HMO.
K. Complaint System
In compliance with § 10-16-409, C.R.S., the contract and/or evidence of coverage shall contain a description of the HMO’s method for resolving enrollee complaints, incorporating procedures to be followed by the enrollee in the event any dispute arises under the contract.
L. Coordination of Benefits
A group contract and/or evidence of coverage must contain a provision for coordination of benefits that shall be consistent with Colorado Insurance Regulation 4-6-2, 3 CCR 702-4. An individual contract and/or evidence of coverage may have an “insurance with other insurers provision.” Additionally, an HMO must coordinate benefits with private passenger automobile coverage, as required under § 10-4-641, C.R.S.
M. Point-of-service plan contract
There is no requirement that “point-of-service” coverage be offered to groups or individuals. However, if an HMO offers a point-of-service plan, it must be offered to all individuals and/or groups that qualify for the point-of-service plan, based upon the HMO’s underwriting standards. If the point-of-service plan is offered to a group, it must be offered to all eligible members of that group. Additionally, an employer may set standards as to which employees are eligible for “point-of-service” coverage.
1. Point-of-service plan mandatory contract provisions.
A point-of-service plan contract must, at a minimum:
a. Provide all basic health care services required by law to be provided by an HMO as in-plan coverage services, including emergency and urgent care; and
b. Provide incentives for enrollees to use in-plan covered services.
2. Point-of-service plan optional contract provisions.
A point-of-service plan may:
a. Limit or exclude specific types of services from coverage when obtained out-of-plan;
b. Include annual out-of-pocket limits and annual and/or lifetime maximum benefit allowances for out-of-plan covered services that are separate from any limits and allowances applied to in-plan covered services; and
c. Include those services that an enrollee obtains from a medical provider for which proper authorization or referral was not given.
3. Point-of-service plan limitations.
An HMO may not expend more than 20% of its total annual net medical and hospital expenses (net of reinsurance and coordination of benefit recoveries) for indemnity benefits.
4. An HMO must comply with the form and rate filing requirements contained in statute and regulation. In complying with these statutes and regulations, the HMO will:
a. Design the benefit levels for in-plan covered services and out-of-plan covered services to achieve the desired level of in-plan utilization; and
b. Provide or arrange for adequate systems to:
(1) Process and pay claims for out-of-plan covered services;
(2) Meet the requirements of a point-of-service product as set by this section; and
(3) Generate accurate financial and regulatory reports on a timely basis in order for the commissioner to evaluate experience with the point-of-service plan and monitor compliance with the point-of-service plan provisions.
All HMO benefit contracts and evidence of coverage must contain a clear and concise explanation of point-of-service health care services. The explanation must include:
a. The method of reimbursement to enrollees, where applicable;
b. Applicable copayments, coinsurance and deductibles;
d. The services that an enrollee is permitted to obtain on an allowed self-referral basis; and
e. Instructions regarding submission of claims for self-referred health care services.
N. Indemnity Benefits
Basic health care services are required to be offered through providers that are contracted or employed by the HMO. Coverage offered by non-contracted providers may be provided on an indemnity basis, as permitted by law.
Section 6 Prohibited Practices
A. No HMO shall unfairly discriminate against any enrollee based on the age, sex, race, color, creed, national origin, ancestry, religion or marital status. However, nothing shall prohibit an HMO from setting rates or establishing a schedule of charges in accordance with relevant actuarial data.
B. No HMO shall expel or refuse to offer a continuation or conversion contract to individual members of a group based on the health status or health care needs of the individual enrollee or member.
Section 7 Services
A. Out-of-Area Services and Benefits
1. Out-of-area services shall be subject to copayment or deductible requirements set forth in Subsection C of Section 8 of this regulation.
2. When an enrollee is temporarily absent from the HMO’s service area, an HMO shall provide benefits for reimbursement for emergency care or urgent care services, or, at the HMO’s discretion, transportation which is medically necessary and appropriate under the circumstances to return the enrollee to an HMO provider, subject to the following conditions:
a. The condition could not reasonably have been foreseen;
b. The enrollee could not reasonably arrange to return to the HMO’s service area to receive treatment from the HMO’s provider;
c. The temporary absence must be for some purpose other than the receipt of medical treatment; and
d. If the HMO requires notification, the HMO is notified as required by the evidence of coverage unless it is shown that it was not reasonably possible to communicate with the HMO in such time limits.
For urgently needed services, the HMO is notified prior to the commencement of care, unless it is shown that it was not reasonably possible to communicate with the HMO in such time limits.
B. Supplemental Health Care Services
In addition to the basic health care services as defined in § 10-16-102(4), C.R.S., an HMO may offer to its enrollees any supplemental health care services it chooses to provide. Limitations as to time and cost may vary from those applicable to basic health care services.
Section 8 Other Requirements
A. Description of Providers
1. An HMO shall provide its enrollees with access to a list of the names and locations of all of its current primary care physicians and hospitals in an enrollee’s service area, no later than the time of enrollment or the time the contract and evidence of coverage are issued and upon request thereafter.
2. Any list of providers shall contain a notice regarding the availability of the listed primary care physicians. Such notice shall be in not less than ten-point type and be placed in a prominent place on the list of providers. The notice shall contain the following or similar language:
“Enrolling in (name of HMO) does not guarantee services by a particular provider on this list. If you wish to be sure of receiving care from specific providers listed, you should contact those providers to be sure that they are accepting additional patients for (name of HMO). Also, we may add physicians on a periodic basis and will provide you with a listing of newly added doctors in your local area, if you request it.”
B. Description of the Service Area
A HMO shall provide its enrollees with a description of the HMO’s service area no later than the time of enrollment or the time the contract and evidence of coverage is issued and upon request thereafter. If the description of the HMO’s service area is changed, the HMO shall provide, at such time, a new description of the HMO’s service area to its enrollees.
C. Copayments or Deductibles
1. An HMO may require copayments and/or deductibles of enrollees as a condition for the receipt of specific health care services. Copayments and deductibles for basic health care services shall be shown in the contract and/or evidence of coverage or an addendum thereof as a percentage or as a specified dollar amount.
2. Copayments or deductibles can vary by provider as a means of encouraging an enrollee to obtain services from a particular provider.
D. Complaint System
1. A complaint system shall be established and maintained by an HMO to provide reasonable procedures for the prompt and effective resolution of written complaints.
2. An HMO shall provide complaint forms to be given to enrollees who wish to register written complaints. Such forms shall include the address and telephone number to which complaints must be directed and shall specify any required time limits imposed by the HMO.
3. The complaint system shall provide for (a) written acknowledgment of complaints and (b) complaints to be resolved or to have a final determination of the complaint by the HMO complaint system within a reasonable period of time, but not more than ninety days from the date the complaint is registered. This period may be extended (a) in the event of a delay in obtaining the documents or records necessary for the resolution of the complaint, or (b) by the mutual written agreement of the HMO and the enrollee.
4. Membership may not be terminated solely as a result of filing a complaint against the HMO.
5. If an enrollee’s complaints and grievances may be resolved through a specified arbitration agreement, the enrollee shall be advised in writing of his rights and duties under the agreement at the time the complaint is registered. Any such agreement must be accompanied by a statement setting forth in writing the terms and conditions of binding arbitration. Any HMO that makes such binding arbitration a condition of enrollment must fully disclose this requirement to its enrollees in the contract and evidence of coverage.
Section 9 Severability
If any provision of this regulation or the application of it to any person or circumstances is for any reason held to be invalid, the remainder of the regulation shall not be affected.
Section 10 Enforcement
Noncompliance with this regulation may result in the imposition of any of the sanctions made available in the Colorado statutes pertaining to the business of insurance, or other laws, which include the imposition of civil penalties, issuance of cease and desist orders, and/or suspensions or revocation of license, subject to the requirements of due process.
Section 11 Effective Date
This regulation is hereby amended shall be effective for policies issued or renewed on January 1, 2014.
Section 12 History
Originally issued as Regulation 90-6, Effective October 1, 1990.
Amended Regulation, Effective December 1, 1992.
Amended Regulation, Effective July 1, 2000.
Amended Regulation, Effective January 31, 2003.
Amended Regulation, Effective October 1, 2009.
Amended Regulation, Effective August 1, 2012.
Amended Regulation, Effective January 1, 2014.