HOUSE BILL NO. 554

INTRODUCED BY B. KRENZLER

A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING THAT LAWS GOVERNING INSURANCE CONTRACTS AND HEALTH MAINTENANCE ORGANIZATIONS APPLY TO THE PROVISION OF MANAGED CARE MENTAL HEALTH SERVICES UNDER THE MONTANA MEDICAID PROGRAM; PROVIDING FOR OVERSIGHT OF THE MENTAL HEALTH MANAGED CARE CONTRACT BY THE COMMISSIONER OF INSURANCE; PROVIDING FOR THE DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES TO ADMINISTER A REGIONAL MANAGED CARE PROGRAM IF THE CURRENT CONTRACT IS CANCELED; AMENDING SECTIONS 33-1-102 AND 33-31-202, MCA; AND PROVIDING AN EFFECTIVE DATE AND A CONTINGENT APPLICABILITY PROVISION."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 33-1-102, MCA, is amended to read:

"33-1-102. Compliance required -- exceptions -- health service corporations -- health maintenance organizations -- governmental insurance programs. (1) A person may not transact a business of insurance in Montana or a business relative to a subject resident, located, or to be performed in Montana without complying with the applicable provisions of this code.

(2) The provisions of this code do not apply with respect to:

(a) domestic farm mutual insurers as identified in chapter 4, except as stated in chapter 4;

(b) domestic benevolent associations as identified in chapter 6, except as stated in chapter 6; and

(c) fraternal benefit societies, except as stated in chapter 7.

(3) This code applies to health service corporations as prescribed in 33-30-102. The existence of the corporations is governed by Title 35, chapter 2, and related sections of the Montana Code Annotated.

(4) This code does not apply to health maintenance organizations or to managed care community networks, as defined in 53-6-702, to the extent that the existence and operations of those organizations are governed by chapter 31 or to the extent that the existence and operations of those networks are governed by Title 53, chapter 6, part 7.

(5) This code does not apply to workers' compensation insurance programs provided for in Title 39, chapter 71, parts 21 and 23, and related sections.

(6) This code applies to the functions performed by a managed care contractor providing mental health services under the Montana medicaid program as established in Title 53, chapter 6.

(7) This code does not apply to the state employee group insurance program established in Title 2, chapter 18, part 8.

(8) This code does not apply to insurance funded through the state self-insurance reserve fund provided for in 2-9-202.

(9) (a) This code does not apply to any arrangement, plan, or interlocal agreement between political subdivisions of this state in which the political subdivisions undertake to separately or jointly indemnify one another by way of a pooling, joint retention, deductible, or self-insurance plan.

(b) This code does not apply to any arrangement, plan, or interlocal agreement between political subdivisions of this state or any arrangement, plan, or program of a single political subdivision of this state in which the political subdivision provides to its officers, elected officials, or employees disability insurance or life insurance through a self-funded program."

Section 2. Section 33-31-202, MCA, is amended to read:

"33-31-202. Issuance of certificate of authority. (1) The commissioner shall issue or deny a certificate of authority to any person filing an application pursuant to 33-31-201 within 180 days after receipt of the application. The commissioner shall grant a certificate of authority upon payment of the application fee prescribed in 33-31-212 if the commissioner is satisfied that each of the following conditions is met:

(a) The persons responsible for the conduct of the applicant's affairs are competent and trustworthy.

(b) The health maintenance 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. This requirement does not apply to the comprehensive physical health care services provided by a health maintenance organization to a person receiving medicaid services under the Montana medicaid program as established in Title 53, chapter 6. This requirement applies to the comprehensive mental health care services provided by a health maintenance organization to a person receiving medicaid services under the Montana medicaid program as established in Title 53, chapter 6.

(c) The health maintenance organization is financially responsible and can reasonably be expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the commissioner may consider:

(i) the financial soundness of the arrangements for health care services and the schedule of charges used in connection with the services;

(ii) the adequacy of working capital;

(iii) any agreement with an insurer, a health service corporation, a government, or any other organization for ensuring the payment of the cost of health care services or the provision for automatic applicability of an alternative coverage in the event of discontinuance of the health maintenance organization;

(iv) any agreement with providers for the provision of health care services;

(v) any deposit of cash or securities submitted in accordance with 33-31-216; and

(vi) any additional information that the commissioner may reasonably require.

(d) The enrollees must be afforded an opportunity to participate in matters of policy and operation pursuant to 33-31-222.

(e) Nothing in the proposed method of operation, as shown by the information submitted pursuant to 33-31-201 or by independent investigation, violates any provision of this chapter or rules adopted by the commissioner.

(2) The commissioner may deny a certificate of authority only if the requirements of 33-31-404 are complied with."

NEW SECTION. Section 3. Enforcement -- commissioner of insurance. In addition to any enforcement powers granted to the department of public health and human services, the commissioner of insurance shall enforce the provisions of Title 33 against a managed care contractor providing mental health services under the Montana medicaid program as established in this chapter. The commissioner has the powers and authority to enforce the provisions as expressly conferred upon the commissioner by or reasonably implied from the provisions of the laws of this state, including but not limited to the following:

(1) approval over changes in ownership or control of the managed care contractor;

(2) investigation, examination, supervision, rehabilitation, and liquidation in connection with financial solvency, assets and liabilities, deposits, and investments;

(3) investigation, examination, hearings, and penalties in connection with:

(a) unfair trade practices;

(b) unfair claim settlement practices;

(c) insurance information and privacy protection;

(d) misrepresentation and false advertising;

(e) unfair discrimination;

(f) fraud;

(g) licensing and registration; and

(h) filing and approval of forms;

(4) service of process;

(5) rulemaking as provided in 33-1-313;

(6) orders, notices, and injunctions;

(7) compelled testimony; and

(8) subpoenas of witnesses and records.

NEW SECTION. Section 4. Contingency in effect upon cancellation of contract. If a contract for managed care of mental health services under Title 53, chapter 6, is canceled, the department of public health and human services shall administer a regional managed care program to provide services to clients in need of mental health services.

NEW SECTION. Section 5. Codification instruction. [Sections 3 and 4] are intended to be codified as an integral part of Title 53, chapter 6, part 1, and the provisions of Title 53, chapter 6, part 1, apply to [sections 3 and 4].

NEW SECTION. Section 6. Saving clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act].

NEW SECTION. Section 7. Effective date. [This act] is effective on July 1, 1999.

NEW SECTION. Section 8. Contingent applicability. [This act] applies to any managed care contractor or health maintenance organization providing mental health care services under contract with the state upon entering into, amendment of, or renewal of a contract.

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