§ 301.62. Subscriber contracts and evidences of coverage.
(a) General filing procedure.
(1) Number of copies. The HMO shall file group and nongroup contract forms and evidences of coverage, in duplicate. One copy will be retained by the Department, and the other copy will be returned to the HMO with the action taken by the Department noted thereon.
(2) Time of filing. Contract forms and evidences of coverage shall be filed with the Commissioner and deemed approved unless explicitly rejected within 60 days of the filing. Disapproval of a filing by the Commissioner may be appealed under 2 Pa.C.S. (relating to administrative law and procedure).
(3) Form number. A form shall be identified with a distinguishing form number on the cover of the form.
(4) Hypothetical data. Blank spaces in the proposed contract form and evidence of coverage shall be completed with hypothetical data demonstrating the purpose and use of the forms.
(5) Final print required. Contract forms and evidences of coverage shall be submitted in final print, in the form intended for actual issue, for formal filing. Initial submissions of contract forms and evidences of coverage may be in other than final print when the HMO desires a preliminary review of forms before preparing final printed documents.
(6) Letter of submission. The letter of submission shall be in duplicate and shall contain:
(i) The form number of each form submitted.
(ii) An explanation of the coverage provided.
(iii) An explanation of the specific purpose and use of the form.
(iv) Identification of the previously approved form which is to be replaced by the newly submitted form.
(v) Identification of forms no longer being used by the HMO.
(b) Disclosure requirements.
(1) Contract forms and evidences of coverage shall clearly and prominently state that coverage is limited to services provided by affiliated providers, except in emergency situations or when authorized in advance by an affiliated provider.
(2) Contract forms and evidences of coverage shall clearly explain the limitations on emergency and out-of-area services.
(3) Contract forms and evidences of coverage shall contain a complete, accurate and easily understood description of contract benefits, limitations and exclusions.
(4) Contract forms and evidences of coverage shall state that changes in premium rates and contract forms are subject to prior review and approval by the Department.
(c) Emergency benefits and services. The contract and evidence of coverage shall contain a specific description of benefits and services available for emergencies 24 hours a day, 7 days a week, including disclosure of restrictions on emergency benefits and services. The forms shall explain the procedures to be followed to secure medically necessary emergency health services. Emergency care service shall be covered in and out of the service area. No contract or evidence of coverage may limit the availability of emergency services within the service area only to affiliated providers. No emergency room copayment in excess of primary care copayment may be charged if the member has been referred to the emergency room by a primary care physician or the HMO and the services could have been provided in the primary care physician’s office.
(d) Copayment requirements. Contract forms, evidences of coverage and marketing literature shall contain a complete, accurate and easily understood description of copayment requirements. Copayments shall be described in specific dollar amounts.
(e) Arbitration. Contract forms and evidences of coverage may not require a member to submit to binding arbitration for settlement of a dispute between the member and the HMO.
(f) Subrogation. If the contract contains a subrogation or reimbursement provision, the provision shall state that the right of subrogation or reimbursement is not enforceable if prohibited by statute or regulation.
(g) Transplant procedures. Benefits for a covered transplant procedure shall include coverage for the medical expenses of a live donor to the extent that those medical expenses are not covered by another program.
(h) Preexisting conditions.
(1) No preexisting condition limitation provision may be more restrictive than the following:
(i) A preexisting condition is a disease or physical condition for which an individual received medical advice or treatment within 90 days immediately prior to becoming covered under the contract.
(ii) The condition shall be covered in full after the individual has been covered under the contract for 12 months.
(2) Group contracts shall give the member credit toward satisfaction of the preexisting condition limitation for the period of time the member was covered by the group’s prior health care plan or alternate health care plan.
(3) Nongroup conversion contracts shall give the member credit toward satisfaction of the preexisting condition limitation for the period of time the member was covered by the prior group contract.
(4) If a contract includes a preexisting condition limitation, the enrollment form shall contain a question and provision for answer in the following form: ‘‘NOTICE: The following question must be answered: Do you understand that the HMO will not provide coverage during the first
month(s) of enrollment for health care services required for the treatment of any disease or physical condition which required medical advice or treatment within 90 days prior to enrollment?’’(5) Contracts may not utilize individual impairment riders whereby coverage for a specific condition of a specific individual is limited or excluded.
(i) Termination of coverage.
(1) The contract and evidence of coverage shall clearly state the conditions upon which cancellation or termination may be effected by the HMO or the member.
(2) No HMO may cancel or terminate coverage of services provided a member under an HMO contract except for one of the following reasons:
(i) Failure to pay the amounts due under the contract.
(ii) Fraud or material misrepresentation in the use of services or facilities.
(iii) Violation of the material terms of the contract.
(iv) Failure to continue to meet the eligibility requirements under a group contract, if a conversion option is offered.
(v) Termination of the group contract under which the member was covered.
(vi) Failure of the member and the primary care physician to establish a satisfactory patient-physician relationship if:
(A) It is shown that the HMO has, in good faith, provided the member with the opportunity to select an alternative primary care physician.
(B) The member has repeatedly refused to follow the plan of treatment ordered by the physician.
(C) The member is notified in writing at least 30 days in advance that the HMO considers the patient-physician relationship to be unsatisfactory and specific changes are necessary in order to avoid termination subject to HMO grievance procedure.
(vii) Another reason approved by the Commissioner.
(3) No HMO may cancel or terminate a member’s coverage for services provided under an HMO contract on the basis of the status of the member’s health.
(4) No HMO may cancel or terminate a member’s coverage for services provided under an HMO contract on the basis that the subscriber has exercised rights under the HMO’s grievance system by registering a complaint against the HMO.
(5) No HMO may cancel or terminate a member’s coverage for services provided under an HMO contract without giving the member written notice of termination including the reason for termination. Termination is not effective for at least 15 days from the date of mailing. If the notice is not mailed, effective termination is from the date of delivery. For termination due to nonpayment of premium, the grace period shall be at least 30 days.
(6) A member’s misuse of a membership card will not result in termination of coverage for the member’s entire family unless the member who misuses the membership card is the subscriber.
(7) A member’s failure to establish and maintain an acceptable physician-patient relationship with a provider will not result in termination of coverage for the member’s entire family unless the member is the subscriber.
(8) If a member is an inpatient in a hospital or skilled nursing facility on the date coverage is due to terminate, coverage shall be extended until the member is discharged from the hospital or skilled nursing facility, but may be terminated when the contractual benefit limit has been reached.
(j) Coordination of benefits. The contract and evidence of coverage may contain a provision for coordination of benefits that shall be consistent with that applicable to other carriers in this Commonwealth. Provisions or rules for coordination of benefits established by an HMO may not relieve an HMO of its duty to provide or arrange for a covered health care service to a member because the member is entitled to coverage under another contract, policy or plan, including coverage provided under government programs. The HMO is required to provide health care services first and then may seek coordination of benefits.
(k) Grace period. The contract or evidence of coverage shall provide for a grace period of at least 30 days for the payment of premiums, except the first, during which coverage shall remain in effect. The contract holder shall remain liable for:
(1) The payment of the premium for the time coverage was in effect during the grace period.
(2) The member shall remain liable for copayments owed.
(l) Claims. The contract and evidence of coverage shall contain procedures for filing claims that include:
(1) A required notice to the HMO.
(2) How and when claim forms are obtained if they are required.
(3) Requirements for filing proper proofs of loss.
(4) A time limit for payment of claims.
(m) Medical necessity administration. Authorization by the member’s primary care physician, or other physician providing service at the direction of the primary care physician, shall constitute proof of medical necessity for purposes of determining a member’s potential liability.
Authority The provisions of this § 301.62 amended under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. § § 66, 186, 411 and 412); and the Health Maintenance Organization Act (40 P. S. § § 1551—1567).
Source The provisions of this § 301.62 adopted February 20, 1987, effective February 21, 1987, 17 Pa.B. 807; amended September 8, 1989, effective September 9, 1989, 19 Pa.B. 3820. Immediately preceding text appears at serial pages (115168) to (115172).
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