Chapter 209

2009 -- S 0548 SUBSTITUTE A AS AMENDED

Enacted 11/09/09

 

A N A C T

RELATING TO INSURANCE -- RENTAL NETWORK CONTRACT ARRANGEMENTS

 

     Introduced By: Senator David E. Bates

     Date Introduced: February 25, 2009

 

It is enacted by the General Assembly as follows:

 

     SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended

by adding thereto the following chapter:

 

     CHAPTER 20.10

RENTAL NETWORK CONTRACT ARRANGEMENTS

 

     27-20.10-1. Definitions. For purposes of this chapter, the following definitions shall

apply:

     (1) "Contracting entity" means any person or entity that enters into direct contracts with

providers for the delivery of health care services in the ordinary course of business.

     (2) "Control" and "under common control with" shall mean possession, directly or

indirectly, of the power to direct or cause the direction of the management and policies of an

entity through the ownership of fifty percent (50%) or more of the voting securities of the entity.

     (3) "Covered individual" means an individual who is covered under a health insurance

plan.

     (4) "Department" means the department of business regulation.

     (5) "Direct notification" is a written or electronic communication from a contracting

entity to a provider documenting a third-party access to a provider network.

     (6) "Health care services" means services for the diagnosis, prevention, treatment or cure

of a health condition, illness, injury or disease.

     (7)(i) "Health insurance plan" means any hospital and medical expense incurred policy,

nonprofit health care service plan contract, health maintenance organization subscriber contract,

or any other health care plan or arrangement that pays for or furnishes medical or health care

services, whether by insurance or otherwise.

     (ii) "Health insurance plan" shall not include one or more, or any combination of, the

following: coverage only for accident, or disability income insurance; coverage issued as a

supplement to liability insurance; liability insurance, including general liability insurance and

automobile liability insurance; workers' compensation or similar insurance; automobile medical

payment insurance; credit-only insurance; coverage for on-site medical clinics; coverage similar

to the foregoing as specified in federal regulation issued pursuant to P.L. No. 104-191, under

which benefits for medical care are secondary or incidental to other insurance benefits; dental or

vision benefits; benefits for long-term care, nursing home care, home health care, or community-

based care; specified disease or illness coverage, hospital indemnity or other fixed indemnity

insurance, or such other similar, limited benefits as are specified in regulations; Medicare

supplemental health insurance as defined under section 1882(g)(1) of the Social Security Act;

coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code;

or other similar limited benefit supplemental coverages.

     (8)(i) "Provider" means a physician, a physician organization, or a physician hospital

organization that is acting exclusively as an administrator on behalf of a provider to facilitate the

provider's participation in health care contracts.

     (ii) "Provider" does not include a physician organization or physician hospital

organization that leases or rents the physician organization's or physician hospital organization's

network to a third-party.

     (9) "Provider network contract" means a contract between a contracting entity and a

provider specifying the rights and responsibilities of the contracting entity and provider for the

delivery of and payment for health care services to covered individuals.

     (10) "Third-party" means an organization that enters into a contract with a contracting

entity or with another third-party to gain access to a provider network contract.

 

     27-20.10-2. Scope. (a) This chapter shall apply to health insurance corporations subject

to chapter 1 of this title, nonprofit hospital or medical service corporations subject to chapters 19

or 20 of this title, and health maintenance organization incorporated or resident in the state of

Rhode Island.

     (b) This chapter shall not apply to provider network contracts for services provided to

Medicaid, Medicare or state children's health insurance program (SCHIP) beneficiaries.

     (c) This chapter shall not apply in circumstances where access to the provider network

contract is granted to an entity operating under common control with or under the same brand

licensee program as the contracting entity ("affiliate entities"). Contracting entities shall,

however, make the list of such affiliate entities available on a website or by other means. The

affiliate entities shall have the same rights and responsibilities under the provider network

contracts as the contracting entities.

     (d) This chapter shall not apply to a contract between a contracting entity and a discount

medical plan organization.

     (e) This chapter shall not apply to any entity, such as employers, church plans or

government plans, receiving administrative services from the contracting entity or an affiliate

entity. Such exempt entities shall have the same rights and responsibilities under the provider

network contracts as the contracting entities, except the exempt entities shall not grant access to a

provider's health care services and contractual discounts to any other entity.

 

     27-20.10-3. Registration. (a) Any person that commences business as a contracting

entity shall register with the department within thirty (30) days of commencing business in the

state of Rhode Island unless such person is licensed by the department as an insurer. Upon

passage of this chapter, each person not licensed by the department as a contracting entity shall

register with the department within ninety (90) days of the effective date of this chapter.

     (1) Registration shall consist of the submission of the following information:

     (i) The official name of the contracting entity, including and d/b/a designations used in

this state;

     (ii) The mailing address and main telephone number for the contracting entity's main

headquarters; and

     (iii) The name and telephone number of the contracting entity's representative who shall

serve as the primary contact with the department.

     (2) The information required by this section shall be submitted in written or electronic

format, as prescribed by the department.

     (b) The department may collect a reasonable fee for the purpose of administering the

registration process.

 

     27-20.10-4. Contracting entity rights and responsibilities. (a) A contracting entity

may not grant access to a provider's health care services and contractual discounts pursuant to a

provider network contract unless:

     (1) The provider network contract specifically states that the contracting entity may enter

into an agreement with a third-party allowing the third-party to obtain the contracting entity's

rights and responsibility's under the provider network contract as if the third-party were the

contracting entity; and

     (2) The third-party accessing the provider network contract is contractually obligated to

comply with all applicable terms, limitations and conditions of the provider network contract.

     (b) A contracting entity that grants access to a provider's health care services and

contractual discounts pursuant to a provider network contract shall:

     (1) Identify and provide to the provider, upon request at the time a provider network

contract is entered into with a provider, a written or electronic list of all third-parties known at the

time of contracting, to which the contracting entity has or will grant access to the provider's

health care services and contractual discounts pursuant to a provider network contract;

     (2) Maintain an Internet website or other readily available mechanism, such as a toll-free

telephone number, through which a provider may obtain a listing, updated at least every ninety

(90) days, of the third-parties to which the contracting entity or another third-party has executed

contracts to grant access to such provider's health care services and contractual discounts pursuant

to a provider network contract;

     (3) Provide each third-party who contracts with the contracting entity to gain access to

the provider network contract with a summary of the contracting entity's current standard

provider contract terms;

     (4) Require that the third-party who contracts with the contracting entity to gain access to

the provider network contract identify the source of the contractual discount taken by the third-

party on each remittance advice (RA) or explanation of payment (EOP) form furnished to a health

care provider when such discount is pursuant to the contracting entity's provider network

contract;

     (5)(i) Notify the third-party who contracts with the contracting entity to gain access to the

provider network contract of the termination of the provider network contract no later than ten

(10) days after receipt of notice of the termination of the provider network contract;

     (ii) Require those that are by contract eligible to claim the right to access a provider’s

discounted rate to cease claiming entitlement to those rates or other contracted rights or

obligations for services rendered after termination of the provider network contract; and

     (iii) The notice required under paragraph (i) above can be provided through any

reasonable means, including, but not limited to: written notice, electronic communication, or an

update to electronic database or other provider listing.

     (c) Subject to any applicable continuity of care requirements, agreements, or contractual

provisions:

     (1) A third-party’s right to access a provider’s health care services and contractual

discounts pursuant to a provider network contract shall terminate on the date the provider network

contract is terminated;

     (2)_Claims for health care services performed after the termination date of the provider

network contract are not eligible for processing and payment in accordance with the provider

network contract; and

     (3) Claims for health care services performed before the termination date of the provider

network contract, but processed after the termination date, are eligible for processing and

payment in accordance with the provider network contract.

     (d)(1) All information made available to provider in accordance with the requirements of

this chapter shall be confidential and shall not be disclosed to any person or entity not involved in

the provider’s practice or the administration thereof without the prior written consent of the

contracting entity.

     (2) Nothing contained in this chapter shall be construed to prohibit a contracting entity

from requiring the provider to execute a reasonable confidentiality agreement to ensure that

confidential or proprietary information disclosed by the contracting entity is not used for any

purpose other than the provider’s director practice management or billing activities.

 

     27-20.10-5. Third-party rights and responsibilities. -- (a) A third-party, having itself

been granted access to a provider’s health care services and contractual discounts pursuant to a

provider network contract, that subsequently grants access to another third-party is obligated to

comply with the rights and responsibilities imposed on contracting entities under section 27-

20.10-4 and 27-20.10-6.

     (b) A third-party that enters into a contract with another third-party to access a provider’s

health care services and contractual discounts pursuant to a provider network contract is obligated

to comply with the rights and responsibilities imposed on third-parties under this section 27-

20.10-5.

     (c)(1) A third-party will provide to the contracting entity the location of a website, or

identify another readily available mechanism such as a toll-free telephone number, which the

contracting entity will make available to the providers under the provider network contract

accessed through the contracting entity. The website or other readily available mechanism will

identify the name of the person or entity to which the third-party subsequently grants access to the

provider’s health care services and contractual discounts pursuant to the provider network

contract.

     (2) The website will allow the providers under the contracting entity’s provider network

contract access to the information referenced in (c)(1) above, and will be updated on a routine

basis as additional persons or entities are granted access. The website must be updated to reflect

all current persons and entities with access every ninety (90) days. Upon request, a contracting

entity shall make updated access information available to a provider via telephone or through

direct notification.

 

     27-20.10-6. Unauthorized access to provider network contracts. -- (a) It is an unfair

insurance practice for the purposes of chapter 27-29 of the Rhode Island general laws to

knowingly access or utilize a provider’s contractual discount pursuant to a provider network

contract without a contractual relationship with the provider, contracting entity, or third-party, as

specified in this chapter;

     (b) Contracting entities and third-parties are obligated to comply with subdivisions 27-

20.10-4(b)(2) or 27-20.10-5(c)(1) and (2) concerning the services referenced on a remittance

advice (RA) or explanation of payment (EOP). A provider may refuse the discount taken on the

(RA) or (EOP) if the discount is taken without a contractual basis or in violation of these sections.

However, an error in the (RA) or (EOP) may be corrected within thirty (30) days following notice

by the provider.

     (c) A contracting entity may not lease, rent, or otherwise grant to a third-party, access to a

provider network contract unless the third-party accessing the health care contract is:

     (1) A payer or third-party administrator or another entity that administers or processes

claims on behalf of the payer;

     (2) A preferred provider organization or preferred provider network, including a

physician organization or physician-hospital organization; or

     (3) An entity engaged in the electronic claims transport between the contracting entity

and the payer that does not provide access to the provider’s services and discount to any other

third-party.

 

     27-20.10-7. Enforcement. Enforcement of this model will follow that of chapter 27-29

of the Rhode Island general laws, “Unfair Competition and Practices.”

 

     SECTION 2. This act shall take effect as of January 1, 2010 and shall apply to provider

network contracts entered into or materially amended on or after said date.

     

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LC01083/SUB A/3

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