Title 26 · WY

26-34-105(a)(i), the funds of a health maintenance organization

Citation: Wyo. Stat. § 26-34-105

Section: 26-34-105

26-34-105(a)(i), the funds of a health maintenance organization shall be invested only in securities or other investments permitted by chapter 7 of this code.

26-34-114. Protection against insolvency.

(a) Before issuing any certificate of authority, the commissioner shall require that the health maintenance organization have an initial net worth of one million five hundred thousand dollars ($1,500,000.00) and shall thereafter maintain the minimum net worth required under subsection (b) of this section.

(b) Except as provided in subsection (c) of this section, every health maintenance organization must maintain a minimum net worth equal to the greater of:

(i) Two percent (2%) of annual premium revenues as reported on the most recent annual financial statement filed with the commissioner on the first seventy-five million dollars ($75,000,000.00) of premium and one percent (1%) of annual premium revenues on the premium in excess of seventy-five million dollars ($75,000,000.00);

(ii) Three (3) times the average monthly uncovered health care expenditures as reported on the most recent financial statement filed with the commissioner;

(iii) One million dollars ($1,000,000.00); or

(iv) An amount equal to the sum of:

(A) Eight percent (8%) of annual health care expenditures except those paid on a capitated basis or managed hospital payment basis as reported on the most recent financial statement filed with the commissioner; and

(B) Four percent (4%) of annual hospital expenditures paid on a managed hospital payment basis as reported on the most recent financial statement filed with the commissioner.

(i) Twenty-five percent (25%) of the amount required by subsection (b) of this section by December 31, 1995;

(ii) Fifty percent (50%) of the amount required by subsection (b) of this section by December 31, 1996;

(iii) Seventy-five percent (75%) of the amount required by subsection (b) of this section by December 31, 1997;

(iv) One hundred percent (100%) of the amount required by subsection (b) of this section by December 31, 1998. (d) In determining net worth, no debt shall be considered fully subordinated unless the subordination clause is in a form acceptable to the commissioner. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated.

(e) The interest expenses relating to the repayment of any fully subordinated debt shall be considered covered expenses.

(f) Any fully subordinated debt incurred by a note meeting the requirements of subsections (d) and (e) of this section, and otherwise acceptable to the commissioner, shall not be considered a liability and shall be recorded as equity.

(g) Unless otherwise provided in this section, each health maintenance organization shall deposit with the commissioner or, at the discretion of the commissioner, with any organization or trustee acceptable to him through which a custodial or controlled account is utilized, cash, securities or any combination of these or other measures that are acceptable to him which at all times shall have a value of not less than three hundred thousand dollars ($300,000.00).

(h) An organization that is in operation on July 1, 1995, shall make a deposit of cash, securities, combination thereof or other measures of equal amount acceptable to the commissioner of one hundred fifty thousand dollars ($150,000.00) on or before August 1, 1995, and an additional deposit of cash, securities, combination thereof or other measures of equal amount acceptable to the commissioner of one hundred fifty thousand dollars ($150,000.00) on or before July 1, 1996.

(j) The deposit shall be an admitted asset of the health maintenance organization in the determination of net worth. All income from deposits belongs to the depositing organization, shall be paid to it as it becomes available and shall be an asset of the organization. A health maintenance organization that has made a securities deposit may withdraw that deposit or any part thereof after making a substitute deposit of cash, securities or any combination thereof or other measures of equal amount and value. Any securities shall be approved by the commissioner before being substituted.

(k) The deposit shall be used to protect the interests of the health maintenance organization's enrollees and to assure continuation of health care services to enrollees of a health maintenance organization which is in rehabilitation or conservation. The commissioner may use the deposit for administrative costs directly attributable to a receivership or liquidation. If the health maintenance organization is placed in receivership or liquidation, the deposit shall be an asset subject to chapter 28 of this code.

(m) The commissioner may reduce or eliminate any of the deposit requirements set forth in this section if he is satisfied that the health maintenance organization has deposited with the state treasurer, insurance commissioner, or other official body of the state or jurisdiction of domicile for the protection of all subscribers and enrollees, wherever located, of the health maintenance organization, cash, acceptable securities or surety, and delivers to the commissioner a certificate to that effect, duly authenticated by the appropriate state official holding the deposit.

(n) Every health maintenance organization shall, when determining liabilities, include an amount estimated in the aggregate to provide for any unearned premium and for the payment of all claims for health care expenditures which have been incurred, whether reported or unreported, which are unpaid and for which the organization is or may be liable, and to provide for the expense of adjustment or settlement of those claims. The liabilities shall be computed in accordance with accounting principles established by the commissioner upon reasonable consideration of the ascertained experience and character of the health maintenance organization.

(o) Every contract between a health maintenance organization and a participating provider of health care services shall be in writing and shall set forth that in the event the health maintenance organization fails to pay for health care services as set forth in the contract, the subscriber or enrollee shall not be liable to the provider for any sums owed by the health maintenance organization.

(p) In the event that the participating provider contract has not been reduced to writing as required by this section or that the contract fails to contain the required prohibition, the participating provider shall not collect or attempt to collect from the subscriber or enrollee sums owed by the health maintenance organization.

(q) No participating provider, or agent, trustee or assignee thereof, may maintain any action at law against a subscriber or enrollee to collect sums owed by the health maintenance organization.

(r) The commissioner shall require that each health maintenance organization have a plan for handling insolvency which allows for continuation of benefits for the duration of the contract period for which premiums have been paid and continuation of benefits to members who are confined on the date of insolvency in an inpatient facility until their discharge or expiration of benefits. In considering such a plan, the commissioner may require:

(i) Insurance to cover the expenses to be paid for continued benefits after an insolvency;

(ii) Provisions in provider contracts that obligate the provider to provide services for the duration of the period after the health maintenance organization's insolvency for which premium payment has been made and until the enrollees' discharge from inpatient facilities;

(iii) Insolvency reserves;

(iv) Acceptable letters of credit;

(v) Any other arrangements to assure that benefits are continued as specified in this subsection.

(s) An agreement to provide health care services between a provider and a health maintenance organization shall require that if the provider terminates the agreement, the provider shall give the organization at least sixty (60) days advance notice of termination.

26-34-115. Uncovered expenditures insolvency deposit.

(a) If at any time uncovered expenditures exceed ten percent (10%) of total health care expenditures, a health maintenance organization shall place an uncovered expenditures insolvency deposit with the commissioner, or with any organization or trustee acceptable to the commissioner through which a custodial or controlled account is maintained, cash or securities that are acceptable to the commissioner. The deposit shall at all times have a fair market value in an amount of one hundred twenty percent (120%) of the organization's outstanding liability for uncovered expenditures for enrollees in this state, including incurred but not reported claims, and shall be calculated as of the first day of the month and maintained for the remainder of the month. If a health maintenance organization is not otherwise required to file a quarterly report, it shall file a report within forty-five (45) days of the end of the calendar quarter with information sufficient to demonstrate compliance with this section.

(b) The deposit required under this section is in addition to the deposit required under W.S. 26-34-114(g) and (h) and is an admitted asset of the health maintenance organization in the determination of net worth. All income from such deposits or trust account shall be assets of the health maintenance organization and may be withdrawn quarterly with the approval of the commissioner.

(i) A substitute deposit of cash or securities of equal amount and value is made;

(ii) The fair market value exceeds the amount of the required deposit; or

(iii) The required deposit under subsection (a) of this section is reduced or eliminated.

(d) Deposits, substitutions or withdrawals may be made only with the prior written approval of the commissioner.

(e) The deposit required under this section is in trust and may be used only as provided under this section. The commissioner may use the deposit of an insolvent health maintenance organization for administrative costs associated with administering the deposit and payment of claims of enrollees of this state for uncovered expenditures in this state. Claims for uncovered expenditures shall be paid on a pro rata basis based on assets available to pay the ultimate liability for incurred expenditures. Partial distribution may be made pending final distribution. Any amount of the deposit remaining shall be paid into the liquidation or receivership of the health maintenance organization.

(f) The commissioner may by regulation prescribe the time, manner and form for filing claims under subsection (e) of this section. (g) The commissioner may by regulation or order require health maintenance organizations to file annual, quarterly or more frequent reports as he deems necessary to demonstrate compliance with this section. The commissioner may require that the reports include liability for uncovered expenditures as well as an audit opinion.

26-34-116. Enrollment period, replacement coverage in the event of insolvency.

(a) In the event of an insolvency of a health maintenance organization, upon order of the commissioner all other carriers that participated in the enrollment process with the insolvent health maintenance organization at a group's last regular enrollment period shall offer the group's enrollees of the insolvent health maintenance organization a thirty (30) day enrollment period commencing upon the date of insolvency. Each carrier shall offer the enrollees of the insolvent health maintenance organization the same coverages and rates that it had offered to the enrollees of the group at its last regular enrollment period.

(b) If no other carrier had been offered to some groups enrolled in the insolvent health maintenance organization, or if the commissioner determines that the other health benefit plan lacks sufficient health care delivery resources to assure that health care services will be available and accessible to all of the group enrollees of the insolvent health maintenance organization, the commissioner shall allocate equitably the insolvent health maintenance organization's group contracts for those groups among all health maintenance organizations which operate within a portion of the insolvent health maintenance organization's service area, taking into consideration the health care delivery resources of each health maintenance organization. Each health maintenance organization to which a group is so allocated shall offer the group the health maintenance organization's existing coverage which is most similar to the group's coverage with the insolvent health maintenance organization at rates determined in accordance with the successor health maintenance organization's existing rating methodology.

(c) The commissioner shall equitably allocate the insolvent health maintenance organization's nongroup enrollees who are unable to obtain other coverage, among all health maintenance organizations which operate within a portion of the insolvent health maintenance organization's service area, taking into consideration the health care delivery resources of each health maintenance organization. Each health maintenance organization to which nongroup enrollees are allocated shall offer the nongroup enrollees the health maintenance organization's existing coverage for individual or conversion coverage as determined by the enrollee's type of coverage in the insolvent health maintenance organization at rates determined in accordance with the successor health maintenance organization's existing rating methodology. Successor health maintenance organizations which do not offer direct nongroup enrollment may aggregate all of the allocated nongroup enrollees into one (1) group for rating and coverage purposes.

(d) Any carrier providing replacement coverage with respect to group hospital, medical or surgical expense or service benefits within a period of sixty (60) days from the date of discontinuance of a prior health maintenance organization contract or policy providing the hospital, medical or surgical expense or service benefits shall immediately cover all enrollees who were validly covered under the previous health maintenance organization contract or policy at the date of discontinuance and who would otherwise be eligible for coverage under the succeeding carrier's contract, regardless of any provisions of the contract relating to active employment or hospital confinement or pregnancy.

(e) Except to the extent benefits for the condition would have been reduced or excluded under the prior carrier's contract or policy, no provision in a succeeding carrier's contract of replacement coverage which would operate to reduce or exclude benefits on the basis that the condition giving rise to benefits preexisted the effective date of the succeeding carrier's contract shall be applied with respect to those enrollees validly covered under the prior carrier's contract or policy on the date of discontinuance.

26-34-117. Prohibited practices.

(a) No health maintenance organization, or representative thereof, shall cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading or any form of evidence of coverage which is deceptive. For purposes of this chapter:

(i) A statement or item of information is: (A) Untrue if it does not conform to fact in any respect which is or may be significant to an enrollee of or person considering enrollment with a health maintenance organization;

(B) Misleading, whether or not it may be literally untrue, if, in the total context in which the statement is made or the item of information is communicated, the statement or item of information may be reasonably understood by a reasonable person, not possessing special knowledge regarding health care coverage, as indicating any benefit or advantage or the absence of any exclusion, limitation or disadvantage of possible significance to an enrollee of, or person considering enrollment in a health maintenance organization if the benefit or advantage or absence of limitation, exclusion or disadvantage does not in fact exist.

(ii) An evidence of coverage is deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, is such as to cause a reasonable person, not possessing special knowledge regarding health maintenance organizations and evidences of coverage therefor, to expect benefits, services, premiums or other advantages which the evidence of coverage does not provide or which the health maintenance organization issuing the evidence of coverage does not regularly make available for enrollees covered under the evidence of coverage.

(b) Chapter 13 of this code applies to health maintenance organizations and evidences of coverage except to the extent that the commissioner determines that the nature of health maintenance organizations and evidences of coverage render that chapter, or any section thereof, clearly inappropriate.

(c) A health maintenance organization shall not cancel or refuse to review an enrollee, except for reasons stated in the organization's rules applicable to all enrollees or for the failure to pay the premiums for coverage, or for any other reasons the commissioner may specify by rule and regulation.

(d) No health maintenance organization unless licensed as an insurer shall refer to itself as an insurer or use a name deceptively similar to the name or description of any insurance or surety corporation doing business in the state.

(e) Any person not in possession of a valid certificate of authority issued pursuant to this chapter shall not use the phrase "health maintenance organization" or "HMO" in the course of operation.

(f) A health care maintenance organization shall not refuse to contract with or compensate for covered services an otherwise eligible health care provider solely because that provider has in good faith communicated with one (1) or more of his current, former or prospective patients regarding the provisions, terms or requirements of the organization's products as they related to the needs of that provider's patients.

(g) A health care maintenance organization shall not prohibit or restrict any health care provider from disclosing to any subscriber, enrollee or member any medically appropriate health care information the provider deems appropriate regarding the:

(i) Nature of treatment, risks or alternatives;

(ii) Decision of any plan to authorize or deny services;

(iii) Process used to authorize or deny health care services or benefits.

26-34-118. Regulation of health maintenance organization producers.

(a) The commissioner, after notice and hearing, may promulgate reasonable rules and regulations as necessary to provide for the licensing of health maintenance organization producers. The rules shall establish:

(i) The requirements for licensure of resident health maintenance organization producers;

(ii) The conditions for entering into reciprocal agreements with other jurisdictions for the licensure of nonresident health maintenance organization producers;

(iii) Any examination, prelicensing or continuing education requirements;

(iv) The requirements for registering and terminating the appointment of health maintenance organization producers; (v) Any requirements for registering any assumed names or office locations in which a health maintenance organization producer does business;

(vi) The conditions for health maintenance organization producer license renewal;

(vii) The grounds for denial, refusal, suspension or revocation of a health maintenance organization producer's license;

(viii) Any required fees for the licensing activities of health maintenance organization producers; and

(ix) Any other requirement or procedure and any form reasonably necessary to provide for the effective administration of the licensing of health maintenance organization producers under this section.

(b) None of the following shall be required to hold a health maintenance organization producer license:

(i) Any regular salaried officer or employee of a health maintenance organization who devotes substantially all of his time to activities other than the taking or transmitting of applications or membership fees or premiums for health maintenance organization membership, or who receives no commission or other compensation directly dependent upon the business obtained and who does not solicit or accept from the public applications for health maintenance organization membership;

(ii) Employers or their officers or employees or the trustees of any employee benefit plan to the extent that the employers, officers, employees or trustees are engaged in the administration or operation of any program of employee benefits involving the use of health maintenance organization memberships, provided that the employers, officers, employees or trustees are not in any manner compensated directly or indirectly by the health maintenance organization issuing the health maintenance organization memberships;

(iii) Banks or their officers and employees to the extent that the banks, officers and employees collect and remit premiums by charging the same against accounts of depositors on the orders of the depositors; or (iv) Any person or the employee of any person who has contracted to provide administrative, management or health care services to a health maintenance organization and who is compensated for those services by the payment of an amount calculated as a percentage of the revenues, net income or profit of the health maintenance organization, if that method of compensation is the sole basis for subjecting that person or the employee of the person to this act.

(i) The functions they perform do not require special competence, trustworthiness or the regulatory surveillance made possible by licensing; or

(ii) Other existing safeguards make regulation unnecessary.

26-34-119. Powers of insurers and hospital and health service corporations.

(a) Any insurance company licensed in this state, or a hospital or health service corporation authorized to do business in this state, either directly or through a subsidiary or affiliate, may organize and operate a health maintenance organization under this chapter. Notwithstanding any other law to the contrary, any two (2) or more such insurance companies, hospitals or health service corporations, or subsidiaries or affiliates thereof, may jointly organize and operate a health maintenance organization. The business of insurance is deemed to include the providing of health care by a health maintenance organization owned or operated by an insurer or a subsidiary thereof.

(b) Notwithstanding any other provision of this code, any insurer or any hospital or health service corporation may contract with a health maintenance organization to provide insurance or similar protection against the cost of care provided through health maintenance organizations and to provide coverage in the event of the failure of the health maintenance organization to meet its obligations.

(c) The enrollees of a health maintenance organization constitute a permissible group under this code or any other laws of this state. Among other things, under any contract specified the insurer or hospital or health service corporation may make benefit payments to health maintenance organizations for health care services rendered by providers.

26-34-120. Examination.

(a) The commissioner may make an examination of the affairs of any health maintenance organization and providers with whom that organization has contracts, agreements or other arrangements as often as is reasonably necessary for the protection of the interests of the people of this state but not less frequently than once every five (5) years.

(b) The administrator may make an examination concerning the quality of health care service and the adequacy of quality assurance programs of any health maintenance organization and providers with whom that organization has contracts, agreements or other arrangements as often as is reasonably necessary for the protection of the interests of the people of this state but not less frequently than once every five (5) years.

(c) Each health maintenance organization and provider shall submit its relevant books and records for the examinations specified in this section and in every way facilitate those examinations. For the purpose of examinations, the commissioner and the administrator may administer oaths to and examine the officers and agents of the health maintenance organization and the principals of any providers concerning their business.

(d) Repealed by Laws 1995, ch. 210, § 3.

(e) Instead of the examinations under this section the commissioner or administrator may accept the report of an examination made by the insurance commissioner or public health commissioner of another state. A report from another state's insurance commissioner shall only be accepted if:

(i) The insurance department preparing the report was, at the time of the examination, accredited under the National Association of Insurance Commissioners' financial regulation standards and accreditation program; or

(ii) The examination is performed under the supervision of an accredited insurance department or with the participation of one (1) or more examiners who are employed by an accredited insurance department and who, after the review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.

26-34-121. Suspension or revocation of certificate of authority.

(a) The commissioner may suspend or revoke any certificate of authority issued to a health maintenance organization under this chapter if:

(i) The commissioner finds the health maintenance organization:

(A) Is operating significantly in contravention of its basic organizational document or in a manner contrary to that described in any other information submitted under W.S.