Office of the Revisor of Statutes
Minnesota Session Laws - 1992, Regular Session
Key: (1) language to be deleted (2) new language
Laws of Minnesota 1992
CHAPTER 554-S.F.No. 2743
An act relating to insurance; regulating Medicare
supplement; making various changes in state law
required by the federal government; regulating
coverages and practices; regulating the Minnesota
comprehensive health association; increasing the
maximum lifetime benefit amounts of certain state plan
coverages; extending the effective date of the
authorization of use of experimental delivery methods;
amending Minnesota Statutes 1990, sections 62A.31, by
adding subdivisions; 62A.315; 62A.36, subdivision 1;
62A.38; 62A.39; 62A.42; 62A.436; 62A.44; and 62E.07;
Minnesota Statutes 1991 Supplement, sections 62A.31,
subdivision 1; 62A.316; 62E.10, subdivision 9; and
62E.12; proposing coding for new law in Minnesota
Statutes, chapter 62A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
ARTICLE 1
Section 1. Minnesota Statutes 1991 Supplement, section
62A.31, subdivision 1, is amended to read:
Subdivision 1. [POLICY REQUIREMENTS.] No individual or
group policy, certificate, subscriber contract or other evidence
of accident and health insurance the effect or purpose of which
is to supplement Medicare coverage issued or delivered in this
state or offered to a resident of this state shall be sold or
issued to an individual covered by Medicare unless the following
requirements are met:
(a) The policy must provide a minimum of the coverage set
out in subdivision 2; and section 62E.07.
(b) The policy must cover preexisting conditions during the
first six months of coverage if the insured was not diagnosed or
treated for the particular condition during the 90 days
immediately preceding the effective date of coverage;.
(c) The policy must contain a provision that the plan will
not be canceled or nonrenewed on the grounds of the
deterioration of health of the insured;.
(d) Before the policy is sold or issued, an offer of both
categories of Medicare supplement insurance has been made to the
individual, together with an explanation of both coverages;.
(e) An outline of coverage as provided in section 62A.39
must be delivered at the time of application and prior to
payment of any premium;.
(f)(1) The policy must provide that benefits and premiums
under the policy shall be suspended at the request of the
policyholder for the period, not to exceed 24 months, in which
the policyholder has applied for and is determined to be
entitled to medical assistance under title XIX of the Social
Security Act, but only if the policyholder notifies the issuer
of the policy within 90 days after the date the individual
becomes entitled to this assistance;
(2) if suspension occurs and if the policyholder or
certificate holder loses entitlement to this medical assistance,
the policy shall be automatically reinstated, effective as of
the date of termination of this entitlement, if the policyholder
provides notice of loss of the entitlement within 90 days after
the date of the loss;
(3) the policy must provide that upon reinstatement (i)
there is no additional waiting period with respect to treatment
of preexisting conditions, (ii) coverage is provided which is
substantially equivalent to coverage in effect before the date
of the suspension, and (iii) premiums are classified on terms
that are at least as favorable to the policyholder or
certificate holder as the premium classification terms that
would have applied to the policyholder or certificate holder had
coverage not been suspended;.
(g) The written statement required by an application for
Medicare supplement insurance pursuant to section 62A.43,
subdivision 1, shall be made on a form, approved by the
commissioner, that states that counseling services may be
available in the state to provide advice concerning the purchase
of Medicare supplement policies and enrollment under the
Medicaid program;.
(h) No issuer of Medicare supplement policies, including
policies that supplement Medicare issued by health maintenance
organizations or those policies governed by section 1833 or 1876
of the federal Social Security Act, United States Code, title
42, section 1395, et seq., in this state may impose preexisting
condition limitations or otherwise deny or condition the
issuance or effectiveness of any Medicare supplement insurance
policy form available for sale in this state, nor may it
discriminate in the pricing of such a policy, because of the
health status, claims experience, receipt of health care, or
medical condition of an applicant where an application for such
insurance is submitted during the six-month period beginning
with the first month in which an individual first enrolled for
benefits under Medicare Part B;.
(i) If a Medicare supplement policy replaces another
Medicare supplement policy, the issuer of the replacing policy
shall waive any time periods applicable to preexisting
conditions, waiting periods, elimination periods, and
probationary periods in the new Medicare supplement policy for
similar benefits to the extent the time was spent under the
original policy;.
(j) The policy has been filed with and approved by the
department as meeting all the requirements of sections 62A.31 to
62A.44; and.
(k) The policy guarantees renewability.
Only the following standards for renewability may be used
in Medicare supplement insurance policy forms.
No issuer of Medicare supplement insurance policies may
cancel or nonrenew a Medicare supplement policy or certificate
for any reason other than nonpayment of premium or material
misrepresentation.
If a group Medicare supplement insurance policy is
terminated by the group policyholder and is not replaced as
provided in this clause, the issuer shall offer certificate
holders an individual Medicare supplement policy which, at the
option of the certificate holder, provides for continuation of
the benefits contained in the group policy; or provides for such
benefits and benefit packages as otherwise meet the requirements
of this clause.
If an individual is a certificate holder in a group
Medicare supplement insurance policy and the individual
terminates membership in the group, the issuer of the policy
shall offer the certificate holder the conversion opportunities
described in this clause; or offer the certificate holder
continuation of coverage under the group policy.
(l) A Medicare supplement policy or certificate shall not
indemnify against losses resulting from sickness on a different
basis than losses resulting from accidents.
(m) A Medicare supplement policy or certificate shall
provide that benefits designed to cover cost sharing amounts
under Medicare will be changed automatically to coincide with
any changes in the applicable Medicare deductible amount and
copayment percentage factors. Premiums may be modified to
correspond with the changes.
As soon as practicable, but no later than 30 days prior to
the annual effective date of any Medicare benefit changes, an
issuer shall notify its policyholders and certificate holders of
modifications it has made to Medicare supplement insurance
policies or certificates in a format acceptable to the
commissioner. Such notice shall:
(1) include a description of revisions to the Medicare
program and a description of each modification made to the
coverage provided under the Medicare supplement policy or
certificate; and
(2) inform each policyholder or certificate holder as to
when any premium adjustment is to be made, due to changes in
Medicare.
The notice of benefit modifications and any premium
adjustments must be in outline form and in clear and simple
terms so as to facilitate comprehension.
The notices must not contain or be accompanied by any
solicitation.
(n) Termination by an issuer of a Medicare supplement
policy or certificate shall be without prejudice to any
continuous loss that began while the policy or certificate was
in force, but the extension of benefits beyond the period during
which the policy or certificate was in force may be conditioned
on the continuous total disability of the insured, limited to
the duration of the policy or certificate benefit period, if
any, or payment of the maximum benefits. The extension of
benefits does not apply when the termination is based on fraud,
misrepresentation, or nonpayment of premium. An issuer may
discontinue the availability of a policy form or certificate
form if the issuer provides to the commissioner in writing its
decision at least 30 days before discontinuing the availability
of the form of the policy or certificate. An issuer that
discontinues the availability of a policy form or certificate
shall not file for approval a new policy form or certificate
form of the same type for the same Medicare supplement benefit
plan as the discontinued form for five years after the issuer
provides notice to the commissioner of the discontinuance. The
period of discontinuance may be reduced if the commissioner
determines that a shorter period is appropriate. The sale or
other transfer of Medicare supplement business to another issuer
shall be considered a discontinuance for the purposes of this
section. A change in the rating structure or methodology shall
be considered a discontinuance under this section unless the
issuer complies with the following requirements:
(1) the issuer provides an actuarial memorandum, in a form
and manner prescribed by the commissioner, describing the manner
in which the revised rating methodology and resulting rates
differ from the existing rating methodology and resulting rates;
and
(2) the issuer does not subsequently put into effect a
change of rates or rating factors that would cause the
percentage differential between the discontinued and subsequent
rates as described in the actuarial memorandum to change. The
commissioner may approve a change to the differential that is in
the public interest.
(o)(1) Except as provided in clause (2), the Minnesota
experience of all policy forms or certificate forms of the same
type in a standard Medicare supplement benefit plan shall be
combined for purposes of the refund or credit calculation
prescribed in section 62A.36;
(2) forms assumed under an assumption reinsurance agreement
shall not be combined with the Minnesota experience of other
forms for purposes of the refund or credit calculation.
(p) Medicare supplement policies and certificates shall
include a renewal or continuation provision. The language or
specifications of the provision shall be consistent with the
type of contract issued. The provision shall be appropriately
captioned and shall appear on the first page of the policy or
certificate, and shall include any reservation by the issuer of
the right to change premiums and any automatic renewal premium
increases based on the policyholder's age. Except for riders or
endorsements by which the issuer effectuates a request made in
writing by the insured, exercises a specifically reserved right
under a Medicare supplement policy or certificate, or is
required to reduce or eliminate benefits to avoid duplication of
Medicare benefits, all riders or endorsements added to a
Medicare supplement policy or certificate after the date of
issue or at reinstatement or renewal that reduce or eliminate
benefits or coverage in the policy or certificate shall require
a signed acceptance by the insured. After the date of policy or
certificate issue, a rider or endorsement that increases
benefits or coverage with a concomitant increase in premium
during the policy or certificate term shall be agreed to in
writing and signed by the insured, unless the benefits are
required by the minimum standards for Medicare supplement
policies or if the increased benefits or coverage is required by
law. Where a separate additional premium is charged for
benefits provided in connection with riders or endorsements, the
premium charge shall be set forth in the policy, declaration
page, or certificate. If a Medicare supplement policy or
certificate contains limitations with respect to preexisting
conditions, the limitations shall appear as a separate paragraph
of the policy or certificate and be labeled as "preexisting
condition limitations."
Issuers of accident and sickness policies or certificates
that provide hospital or medical expense coverage on an expense
incurred or indemnity basis, other than incidentally, to a
person eligible for Medicare by reason of age shall provide to
such applicants a Medicare Supplement Buyer's Guide in the form
developed by the Health Care Financing Administration and in a
type size no smaller than 12-point type. Delivery of the
Buyer's Guide must be made whether or not such policies or
certificates are advertised, solicited, or issued as Medicare
supplement policies or certificates as defined in this section.
Except in the case of direct response issuers, delivery of the
Buyer's Guide must be made to the applicant at the time of
application, and acknowledgment of receipt of the Buyer's Guide
must be obtained by the issuer. Direct response issuers shall
deliver the Buyer's Guide to the applicant upon request, but no
later than the time at which the policy is delivered.
(q)(1) An issuer, directly or through its producers, shall:
(i) establish marketing procedures to assure that a
comparison of policies by its agents or other producers will be
fair and accurate;
(ii) establish marketing procedures to ensure that
excessive insurance is not sold or issued;
(iii) establish marketing procedures that set forth a
mechanism or formula for determining whether a replacement
policy or certificate contains benefits clearly and
substantially greater than the benefits under the replaced
policy or certificate;
(iv) display prominently by type or other appropriate
means, on the first page of the policy or certificate, the
following:
"Notice to buyer: This policy or certificate may not cover
all of your medical expenses";
(v) inquire and otherwise make every reasonable effort to
identify whether a prospective applicant or enrollee for
Medicare supplement insurance already has accident and sickness
insurance and the types and amounts of the insurance;
(vi) establish auditable procedures for verifying
compliance with this paragraph;
(2) in addition to the practices prohibited in chapter 72A,
the following acts and practices are prohibited:
(i) knowingly making any misleading representation or
incomplete or fraudulent comparison of any insurance policies or
issuers for the purpose of inducing, or tending to induce, any
person to lapse, forfeit, surrender, terminate, retain, pledge,
assign, borrow on, or convert any insurance policy or to take
out a policy of insurance with another insurer;
(ii) employing any method of marketing having the effect of
or tending to induce the purchase of insurance through force,
fright, threat, whether explicit or implied, or undue pressure
to purchase or recommend the purchase of insurance;
(iii) making use directly or indirectly of any method of
marketing which fails to disclose in a conspicuous manner that a
purpose of the method of marketing is solicitation of insurance
and that contact will be made by an insurance agent or insurance
company;
(3) the terms "Medicare supplement," "medigap," and words
of similar import shall not be used unless the policy or
certificate is issued in compliance with this subdivision.
(r) Each health maintenance organization, health service
plan corporation, insurer, or fraternal benefit society that
sells coverage that supplements Medicare coverage shall
establish a separate community rate for that coverage.
Beginning January 1, 1993, no coverage that supplements Medicare
or that is governed by section 1833 or 1876 of the federal
Social Security Act, United States Code, title 42, section 1395,
et seq., may be offered, issued, sold, or renewed to a Minnesota
resident, except at the community rate required by this
paragraph.
For coverage that supplements Medicare and for the Part A
rate calculation for plans governed by section 1833 of the
federal Social Security Act, United States Code, title 42,
section 1395, et seq., the community rate may take into account
only the following factors:
(1) actuarially valid differences in benefit designs or
provider networks;
(2) geographic variations in rates if preapproved by the
commissioner of commerce; and
(3) premium reductions in recognition of healthy lifestyle
behaviors, including but not limited to, refraining from the use
of tobacco. Premium reductions must be actuarially valid and
must relate only to those healthy lifestyle behaviors that have
a proven positive impact on health. Factors used by the health
carrier making this premium reduction must be filed with and
approved by the commissioner of commerce.
(s) Beginning January 1, 1993, a health maintenance
organization that issues coverage that supplements Medicare or
that issues coverage governed by section 1833 or 1876 of the
federal Social Security Act, United States Code, title 42,
section 1395 et seq., must offer, to each person to whom it
offers any contract described in this paragraph, at least one
contract that either:
(1) covers 80 percent of the reasonable and customary
charge for prescription drugs or the copayment equivalency; or
(2) offers the coverage described in clause (1) as an
optional rider that may be purchased separately from other
optional coverages. Each contract issued without prescription
drug coverage by any insurer, health service plan corporation,
health maintenance organization, or fraternal benefit society
must contain, displayed prominently by type or other appropriate
means, on the first page of the contract, the following:
"Notice to buyer: This contract does not cover
prescription drugs. Prescription drugs can be a very high
percentage of your medical expenses. Coverage for prescription
drugs may be available to you. Please ask for further details."
Sec. 2. Minnesota Statutes 1990, section 62A.31, is
amended by adding a subdivision to read:
Subd. 3. [DEFINITIONS.] (a) "Accident," "accidental
injury," or "accidental means" means to employ "result" language
and does not include words that establish an accidental means
test or use words such as "external," "violent," "visible
wounds," or similar words of description or characterization.
(1) The definition shall not be more restrictive than the
following: "Injury or injuries for which benefits are provided
means accidental bodily injury sustained by the insured person
which is the direct result of an accident, independent of
disease or bodily infirmity or any other cause, and occurs while
insurance coverage is in force."
(2) The definition may provide that injuries shall not
include injuries for which benefits are provided or available
under a workers' compensation, employer's liability or similar
law, or motor vehicle no-fault plan, unless prohibited by law.
(b) "Applicant" means:
(1) in the case of an individual Medicare supplement policy
or certificate, the person who seeks to contract for insurance
benefits; and
(2) in the case of a group Medicare supplement policy or
certificate, the proposed certificate holder.
(c) "Benefit period" or "Medicare benefit period" shall not
be defined more restrictively than as defined in the Medicare
program.
(d) "Certificate" means a certificate delivered or issued
for delivery in this state or offered to a resident of this
state under a group Medicare supplement policy or certificate.
(e) "Certificate form" means the form on which the
certificate is delivered or issued for delivery by the issuer.
(f) "Convalescent nursing home," "extended care facility,"
or "skilled nursing facility" shall not be defined more
restrictively than as defined in the Medicare program.
(g) "Health care expenses" means expenses of health
maintenance organizations associated with the delivery of health
care services which are analogous to incurred losses of
insurers. The expenses shall not include:
(1) home office and overhead costs;
(2) advertising costs;
(3) commissions and other acquisition costs;
(4) taxes;
(5) capital costs;
(6) administrative costs; and
(7) claims processing costs.
(h) "Hospital" may be defined in relation to its status,
facilities, and available services or to reflect its
accreditation by the joint commission on accreditation of
hospitals, but not more restrictively than as defined in the
Medicare program.
(i) "Issuer" includes insurance companies, fraternal
benefit societies, health care service plans, health maintenance
organizations, and any other entity delivering or issuing for
delivery Medicare supplement policies or certificates in this
state or offering these policies or certificates to residents of
this state.
(j) "Medicare" shall be defined in the policy and
certificate. Medicare may be defined as the Health Insurance
for the Aged Act, title XVIII of the Social Security Amendments
of 1965, as amended, or title I, part I, of Public Law Number
89-97, as enacted by the 89th Congress of the United States of
America and popularly known as the Health Insurance for the Aged
Act, as amended.
(k) "Medicare eligible expenses" means health care expenses
covered by Medicare, to the extent recognized as reasonable and
medically necessary by Medicare.
(l) "Medicare supplement policy or certificate" means a
group or individual policy of accident and sickness insurance or
a subscriber contract of hospital and medical service
associations or health maintenance organizations, other than a
policy or certificate issued under a contract under section 1833
or 1876 of the federal Social Security Act, United States Code,
title 42, section 1395, et seq., or an issued policy under a
demonstration project authorized under amendments to the federal
Social Security Act, which is advertised, marketed, or designed
primarily as a supplement to reimbursements under Medicare for
the hospital, medical, or surgical expenses of persons eligible
for Medicare.
(m) "Physician" shall not be defined more restrictively
than as defined in the Medicare program or section 62A.04,
subdivision 1, or 62A.15, subdivision 3a.
(n) "Policy form" means the form on which the policy is
delivered or issued for delivery by the issuer.
(o) "Sickness" shall not be defined more restrictively than
the following:
"Sickness means illness or disease of an insured person
which first manifests itself after the effective date of
insurance and while the insurance is in force."
The definition may be further modified to exclude
sicknesses or diseases for which benefits are provided under a
workers' compensation, occupational disease, employer's
liability, or similar law.
Sec. 3. Minnesota Statutes 1990, section 62A.31, is
amended by adding a subdivision to read:
Subd. 4. [PROHIBITED POLICY PROVISIONS.] A Medicare
supplement policy or certificate in force in the state shall not
contain benefits that duplicate benefits provided by Medicare.
Sec. 4. Minnesota Statutes 1990, section 62A.315, is
amended to read:
62A.315 [EXTENDED BASIC MEDICARE SUPPLEMENT PLAN;
COVERAGE.]
The extended basic Medicare supplement plan must have a
level of coverage so that it will be certified as a qualified
plan pursuant to chapter 62E section 62E.07, and will provide:
(1) coverage for all of the Medicare part A inpatient
hospital deductible and coinsurance amounts, and 100 percent of
all Medicare part A eligible expenses for hospitalization not
covered by Medicare for the calendar year;
(2) coverage for the daily copayment amount of Medicare
part A eligible expenses for the calendar year incurred for
skilled nursing facility care;
(3) coverage for the 20 percent copayment amount of
Medicare eligible expenses excluding outpatient prescription
drugs under Medicare part B regardless of hospital confinement
for Medicare part B and coverage of the Medicare deductible
amount;
(4) 80 percent of usual and customary hospital and medical
expenses, supplies, and prescription drug expenses, not covered
by Medicare's eligible expenses;
(5) coverage for the reasonable cost of the first three
pints of blood, or equivalent quantities of packed red blood
cells as defined under federal regulations under Medicare parts
A and B, unless replaced in accordance with federal regulations;
and
(6) 100 percent of the cost of immunizations. and routine
screening procedures for cancer, including mammograms and pap
smears;
(7) preventive medical care benefit: coverage for the
following preventive health services:
(i) an annual clinical preventive medical history and
physical examination that may include tests and services from
clause (ii) and patient education to address preventive health
care measures;
(ii) any one or a combination of the following preventive
screening tests or preventive services, the frequency of which
is considered medically appropriate:
(A) fecal occult blood test and/or digital rectal
examination;
(B) dipstick urinalysis for hematuria, bacteriuria, and
proteinauria;
(C) pure tone (air only) hearing screening test
administered or ordered by a physician;
(D) serum cholesterol screening every five years;
(E) thyroid function test;
(F) diabetes screening;
(iii) any other tests or preventive measures determined
appropriate by the attending physician.
Reimbursement shall be for the actual charges up to 100
percent of the Medicare-approved amount for each service as if
Medicare were to cover the service as identified in American
Medical Association current procedural terminology (AMA CPT)
codes to a maximum of $120 annually under this benefit. This
benefit shall not include payment for any procedure covered by
Medicare;
(8) At-home recovery benefit: coverage for services to
provide short-term at-home assistance with activities of daily
living for those recovering from an illness, injury, or surgery:
(i) For purposes of this benefit, the following definitions
shall apply:
(A) "activities of daily living" include, but are not
limited to, bathing, dressing, personal hygiene, transferring,
eating, ambulating, assistance with drugs that are normally
self-administered, and changing bandages or other dressings;
(B) "care provider" means a duly qualified or licensed home
health aide/homemaker, personal care aide, or nurse provided
through a licensed home health care agency or referred by a
licensed referral agency or licensed nurses registry;
(C) "home" means a place used by the insured as a place of
residence, provided that the place would qualify as a residence
for home health care services covered by Medicare. A hospital
or skilled nursing facility shall not be considered the
insured's place of residence;
(D) "at-home recovery visit" means the period of a visit
required to provide at-home recovery care, without limit on the
duration of the visit, except each consecutive four hours in a
24-hour period of services provided by a care provider is one
visit;
(ii) coverage requirements and limitations:
(A) at-home recovery services provided must be primarily
services that assist in activities of daily living;
(B) the insured's attending physician must certify that the
specific type and frequency of at-home recovery services are
necessary because of a condition for which a home care plan of
treatment was approved by Medicare;
(C) coverage is limited to:
(I) no more than the number and type of at-home recovery
visits certified as medically necessary by the insured's
attending physician. The total number of at-home recovery
visits shall not exceed the number of Medicare-approved home
health care visits under a Medicare-approved home care plan of
treatment;
(II) the actual charges for each visit up to a maximum
reimbursement of $40 per visit;
(III) $1,600 per calendar year;
(IV) seven visits in any one week;
(V) care furnished on a visiting basis in the insured's
home;
(VI) services provided by a care provider as defined in
this section;
(VII) at-home recovery visits while the insured is covered
under the policy or certificate and not otherwise excluded;
(VIII) at-home recovery visits received during the period
the insured is receiving Medicare-approved home care services or
no more than eight weeks after the service date of the last
Medicare-approved home health care visit;
(iii) coverage is excluded for:
(A) home care visits paid for by Medicare or other
government programs; and
(B) care provided by family members, unpaid volunteers, or
providers who are not care providers.
Sec. 5. Minnesota Statutes 1991 Supplement, section
62A.316, is amended to read:
62A.316 [BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.]
(a) The basic Medicare supplement plan must have a level of
coverage that will provide:
(1) coverage for all of the Medicare part A inpatient
hospital coinsurance amounts, and 100 percent of all Medicare
part A eligible expenses for hospitalization not covered by
Medicare for the calendar year, after satisfying the Medicare
part A deductible;
(2) coverage for the daily copayment amount of Medicare
part A eligible expenses for the calendar year incurred for
skilled nursing facility care;
(3) coverage for the 20 percent copayment amount of
Medicare eligible expenses excluding outpatient prescription
drugs under Medicare part B regardless of hospital confinement
for Medicare part B after the Medicare deductible amount;
(4) 80 percent of the usual and customary hospital and
medical expenses and supplies incurred during travel outside the
United States as a result of a medical emergency;
(5) coverage for the reasonable cost of the first three
pints of blood, or equivalent quantities of packed red blood
cells as defined under federal regulations under Medicare parts
A and B, unless replaced in accordance with federal regulations;
and
(6) 100 percent of the cost of immunizations and routine
screening procedures for cancer screening including mammograms
and pap smears.
(b) Only the following optional benefit riders may be added
to this plan:
(1) coverage for all of the Medicare part A inpatient
hospital deductible amount;
(2) a minimum of 80 percent of usual and customary eligible
medical expenses, not to exceed any charge limitation
established by the Medicare program, and supplies not covered by
Medicare part B. This does not include outpatient prescription
drugs;
(3) coverage for all of the Medicare part B annual
deductible; and
(4) coverage for at least 50 percent, or the equivalent of
50 percent, of usual and customary prescription drug expenses.;
Nothing in this section prohibits the plan from requiring
that services be received from providers designated as preferred
providers or participating providers in order to receive
coverage under optional benefit riders.
(5) coverage for the following preventive health services:
(i) an annual clinical preventive medical history and
physical examination that may include tests and services from
clause (ii) and patient education to address preventive health
care measures;
(ii) any one or a combination of the following preventive
screening tests or preventive services, the frequency of which
is considered medically appropriate:
(A) fecal occult blood test and/or digital rectal
examination;
(B) dipstick urinalysis for hematuria, bacteriuria, and
proteinauria;
(C) pure tone (air only) hearing screening test,
administered or ordered by a physician;
(D) serum cholesterol screening every five years;
(E) thyroid function test;
(F) diabetes screening;
(iii) any other tests or preventive measures determined
appropriate by the attending physician.
Reimbursement shall be for the actual charges up to 100
percent of the Medicare-approved amount for each service, as if
Medicare were to cover the service as identified in American
Medical Association current procedural terminology (AMA CPT)
codes, to a maximum of $120 annually under this benefit. This
benefit shall not include payment for a procedure covered by
Medicare;
(6) coverage for services to provide short-term at-home
assistance with activities of daily living for those recovering
from an illness, injury, or surgery:
(i) For purposes of this benefit, the following definitions
apply:
(A) "activities of daily living" include, but are not
limited to, bathing, dressing, personal hygiene, transferring,
eating, ambulating, assistance with drugs that are normally
self-administered, and changing bandages or other dressings;
(B) "care provider" means a duly qualified or licensed home
health aide/homemaker, personal care aid, or nurse provided
through a licensed home health care agency or referred by a
licensed referral agency or licensed nurses registry;
(C) "home" means a place used by the insured as a place of
residence, provided that the place would qualify as a residence
for home health care services covered by Medicare. A hospital
or skilled nursing facility shall not be considered the
insured's place of residence;
(D) "at-home recovery visit" means the period of a visit
required to provide at-home recovery care, without limit on the
duration of the visit, except each consecutive four hours in a
24-hour period of services provided by a care provider is one
visit;
(ii) Coverage requirements and limitations:
(A) at-home recovery services provided must be primarily
services that assist in activities of daily living;
(B) the insured's attending physician must certify that the
specific type and frequency of at-home recovery services are
necessary because of a condition for which a home care plan of
treatment was approved by Medicare;
(C) Coverage is limited to:
(I) no more than the number and type of at-home recovery
visits certified as necessary by the insured's attending
physician. The total number of at-home recovery visits shall
not exceed the number of Medicare-approved home care visits
under a Medicare-approved home care plan of treatment;
(II) the actual charges for each visit up to a maximum
reimbursement of $40 per visit;
(III) $1,600 per calendar year;
(IV) seven visits in any one week;
(V) care furnished on a visiting basis in the insured's
home;
(VI) services provided by a care provider as defined in
this section;
(VII) at-home recovery visits while the insured is covered
under the policy or certificate and not otherwise excluded;
(VIII) at-home recovery visits received during the period
the insured is receiving Medicare-approved home care services or
no more than eight weeks after the service date of the last
Medicare-approved home health care visit;
(iii) Coverage is excluded for:
(A) home care visits paid for by Medicare or other
government programs; and
(B) care provided by family members, unpaid volunteers, or
providers who are not care providers.
Sec. 6. [62A.317] [STANDARDS FOR CLAIMS PAYMENT.]
(a) An issuer shall comply with section 1882(c)(3) of the
federal Social Security Act, as enacted by section 4081(b)(2)(C)
of the Omnibus Budget Reconciliation Act of 1987 (OBRA), Public
Law Number 100-203, by:
(1) accepting a notice from a Medicare carrier on duly
assigned claims submitted by Medicare participating physicians
and suppliers as a claim for benefits in place of any other
claim form otherwise required and making a payment determination
on the basis of the information contained in that notice;
(2) notifying the Medicare participating physician or
supplier and the beneficiary of the payment determination;
(3) paying the Medicare participating physician or supplier
directly;
(4) furnishing, at the time of enrollment, each enrollee
with a card listing the policy or certificate name, number, and
a central mailing address to which notices from a Medicare
carrier may be sent;
(5) paying user fees for claim notices that are transmitted
electronically or otherwise; and
(6) providing to the secretary of health and human
services, at least annually, a central mailing address to which
all claims may be sent by Medicare carriers.
(b) Compliance with the requirements in paragraph (a) shall
be certified on the Medicare supplement insurance experience
reporting form.
Sec. 7. [62A.319] [REPORTING OF MULTIPLE POLICIES.]
Subdivision 1. [ANNUAL REPORT.] On or before March 1 of
each year, an issuer shall report the following information for
every individual resident of this state for which the issuer has
in force more than one Medicare supplement policy or certificate:
(1) the policy and certificate number; and
(2) the date of issuance.
Subd. 2. [NAIC REPORT FORMS.] The items in subdivision 1
must be grouped by individual policyholder and be on the
National Association of Insurance Commissioners Reporting
Medicare Supplement Policies form.
Sec. 8. Minnesota Statutes 1990, section 62A.36,
subdivision 1, is amended to read:
Subdivision 1. [MINIMUM LOSS RATIOS RATIO
STANDARDS.] Notwithstanding section 62A.02, subdivision 3,
relating to loss ratios, (a) A Medicare supplement policies
policy form or certificate form shall not be required delivered
or issued for delivery unless the policy form or certificate
form can be expected, as estimated for the entire period for
which rates are computed to provide coverage, to return to
Minnesota policyholders and certificate holders in the form of
aggregate benefits under the policy, for each year excluding the
year of issuance and the first year thereafter, on the basis of
incurred claims experience and earned premiums in Minnesota and
in accordance with accepted actuarial principles and practices,
not including anticipated refunds or credits, provided under the
policy form or certificate form:
(a) (1) at least 75 percent of the aggregate amount of
premiums collected earned in the case of group policies, and
(b) (2) at least 65 percent of the aggregate amount of
premiums collected earned in the case of individual policies.,
calculated on the basis of incurred claims experience or
incurred health care expenses where coverage is provided by a
health maintenance organization on a service rather than
reimbursement basis and earned premiums for the period and
according to accepted actuarial principles and practices. An
insurer shall demonstrate that the third year loss ratio is
greater than or equal to the applicable percentage.
All filings of rates and rating schedules shall demonstrate
that actual expected claims in relation to premiums comply with
the requirements of this section when combined with actual
experience to date. Filings of rate revisions shall also
demonstrate that the anticipated loss ratio over the entire
future period for which the revised rates are computed to
provide coverage can be expected to meet the appropriate loss
ratio standards, and aggregate loss ratio from inception of the
policy or certificate shall equal or exceed the appropriate loss
ratio standards.
(b) An issuer shall collect and file with the commissioner
by May 31 of each year the data contained in the National
Association of Insurance Commissioners Medicare Supplement
Refund Calculating form, for each type of Medicare supplement
benefit plan.
If, on the basis of the experience as reported, the
benchmark ratio since inception (ratio 1) exceeds the adjusted
experience ratio since inception (ratio 3), then a refund or
credit calculation is required. The refund calculation must be
done on a statewide basis for each type in a standard Medicare
supplement benefit plan. For purposes of the refund or credit
calculation, experience on policies issued within the reporting
year shall be excluded.
A refund or credit shall be made only when the benchmark
loss ratio exceeds the adjusted experience loss ratio and the
amount to be refunded or credited exceeds a de minimis level.
The refund shall include interest from the end of the calendar
year to the date of the refund or credit at a rate specified by
the secretary of health and human services, but in no event
shall it be less than the average rate of interest for 13-week
treasury bills. A refund or credit against premiums due shall
be made by September 30 following the experience year on which
the refund or credit is based.
(c) An issuer of Medicare supplement policies and
certificates in this state shall file annually its rates, rating
schedule, and supporting documentation including ratios of
incurred losses to earned premiums by policy or certificate
duration for approval by the commissioner according to the
filing requirements and procedures prescribed by the
commissioner. The supporting documentation shall also
demonstrate in accordance with actuarial standards of practice
using reasonable assumptions that the appropriate loss ratio
standards can be expected to be met over the entire period for
which rates are computed. The demonstration shall exclude
active life reserves. An expected third-year loss ratio which
is greater than or equal to the applicable percentage shall be
demonstrated for policies or certificates in force less than
three years.
As soon as practicable, but before the effective date of
enhancements in Medicare benefits, every issuer of Medicare
supplement policies or certificates in this state shall file
with the commissioner, in accordance with the applicable filing
procedures of this state:
(1) a premium adjustment that is necessary to produce an
expected loss ratio under the policy or certificate that will
conform with minimum loss ratio standards for Medicare
supplement policies or certificates. No premium adjustment that
would modify the loss ratio experience under the policy or
certificate other than the adjustments described herein shall be
made with respect to a policy or certificate at any time other
than on its renewal date or anniversary date;
(2) if an issuer fails to make premium adjustments
acceptable to the commissioner, the commissioner may order
premium adjustments, refunds, or premium credits considered
necessary to achieve the loss ratio required by this section;
(3) any appropriate riders, endorsements, or policy or
certificate forms needed to accomplish the Medicare supplement
insurance policy or certificate modifications necessary to
eliminate benefit duplications with Medicare. The riders,
endorsements, or policy or certificate forms shall provide a
clear description of the Medicare supplement benefits provided
by the policy or certificate.
(d) The commissioner may conduct a public hearing to gather
information concerning a request by an issuer for an increase in
a rate for a policy form or certificate form if the experience
of the form for the previous reporting period is not in
compliance with the applicable loss ratio standard. The
determination of compliance is made without consideration of a
refund or credit for the reporting period. Public notice of the
hearing shall be furnished in a manner considered appropriate by
the commissioner.
Sec. 9. Minnesota Statutes 1990, section 62A.38, is
amended to read:
62A.38 [NOTICE OF FREE EXAMINATION.]
Medicare supplement policies or certificates, other than
those issued pursuant to direct response solicitation, shall
have a notice prominently printed on the first page of the
policy or attached thereto stating in substance that the
policyholder or certificate holder shall have the right to
return the policy or certificate within 30 days of its delivery
and to have the premium refunded in full if, after examination
of the policy or certificate, the insured person is not
satisfied for any reason. Medicare supplement policies or
certificates, issued pursuant to a direct response solicitation
to persons eligible for medicare by reason of age, shall have a
notice prominently printed on the first page or attached thereto
stating in substance that the policyholder or certificate holder
shall have the right to return the policy or certificate within
30 days of its delivery and to have the premium refunded within
ten days after receipt of the returned policy or certificate to
the insurer if, after examination, the insured person is not
satisfied for any reason.
Sec. 10. Minnesota Statutes 1990, section 62A.39, is
amended to read:
62A.39 [DISCLOSURE.]
No individual Medicare supplement plan shall be delivered
or issued in this state and no certificate shall be delivered
pursuant to under a group Medicare supplement plan delivered or
issued in this state unless an outline containing at least the
following information in no less than 12-point type is delivered
to the applicant at the time the application is made:
(a) A description of the principal benefits and coverage
provided in the policy;
(b) A statement of the exceptions, reductions, and
limitations contained in the policy including the following
language, as applicable, in bold print: "THIS POLICY DOES NOT
COVER ALL MEDICAL EXPENSES BEYOND THOSE COVERED BY MEDICARE.
THIS POLICY DOES NOT COVER ALL SKILLED NURSING HOME CARE
EXPENSES AND DOES NOT COVER CUSTODIAL OR RESIDENTIAL NURSING
CARE. READ YOUR POLICY CAREFULLY TO DETERMINE WHICH NURSING
HOME FACILITIES AND EXPENSES ARE COVERED BY YOUR POLICY.";
(c) A statement of the renewal provisions including any
reservations by the insurer of a right to change premiums. The
premium and manner of payment shall be stated for all plans that
are offered to the prospective applicant. All possible premiums
for the prospective applicant shall be illustrated. If the
premium is based on the increasing age of the insured,
information specifying when premiums will change must be
included;
(d) [Read your policy or certificate very carefully.] A
statement that the outline of coverage is a summary of the
policy issued or applied for and that the policy should be
consulted to determine governing contractual provisions.
Additionally, it does not give all the details of Medicare
coverage. Contact your local Social Security office or consult
the Medicare handbook for more details; and
(e) A statement of the policy's loss ratio as follows:
"This policy provides an anticipated loss ratio of (..%). This
means that, on the average, policyholders may expect that
($....) of every $100.00 in premium will be returned as benefits
to policyholders over the life of the contract.";
(f) When the outline of coverage is provided at the time of
application and the Medicare supplement policy or certificate is
issued on a basis that would require revision of the outline, a
substitute outline of coverage properly describing the policy or
certificate shall accompany the policy or certificate when it is
delivered and contain the following statement, in no less than
12-point type, immediately above the company name:
"NOTICE: Read this outline of coverage carefully. It is not
identical to the outline of coverage provided upon application,
and the coverage originally applied for has not been issued.";
(g) [Right to return policy or certificate.] "If you find
that you are not satisfied with your policy or certificate for
any reason, you may return it to (insert issuer's address). If
you send the policy or certificate back to us within 30 days
after you receive it, we will treat the policy or certificate as
if it had never been issued and return all of your payments
within ten days.";
(h) [Policy or certificate replacement.] "If you are
replacing another health insurance policy or certificate, do NOT
cancel it until you have actually received your new policy or
certificate and are sure you want to keep it.";
(i) [Notice.] "This policy or certificate may not fully
cover all of your medical costs."
A. (for agents:)
"Neither (insert company's name) nor its agents are
connected with Medicare."
B. (for direct response:)
"(insert company's name) is not connected with Medicare."
(j) Notice regarding policies or certificates which are not
Medicare supplement policies.
Any accident and sickness insurance policy or certificate,
other than a Medicare supplement policy, or a policy or
certificate issued pursuant to a contract under the federal
Social Security Act, section 1833 or 1876 (United States Code,
title 42, section 1395, et seq.), disability income policy;
basic, catastrophic, or major medical expense policy; single
premium nonrenewable policy; or other policy, issued for
delivery in this state to persons eligible for Medicare shall
notify insureds under the policy that the policy is not a
Medicare supplement policy or certificate. The notice shall
either be printed or attached to the first page of the outline
of coverage delivered to insureds under the policy, or if no
outline of coverage is delivered, to the first page of the
policy or certificate delivered to insureds. The notice shall
be in no less than 12-point type and shall contain the following
language:
"THIS (POLICY OR CERTIFICATE) IS NOT A MEDICARE SUPPLEMENT
(POLICY OR CONTRACT). If you are eligible for Medicare,
review the Medicare supplement buyer's guide available from
the company."
(k) [Complete answers are very important.] "When you fill
out the application for the new policy or certificate, be sure
to answer truthfully and completely all questions about your
medical and health history. The company may cancel your policy
or certificate and refuse to pay any claims if you leave out or
falsify important medical information." If the policy or
certificate is guaranteed issue, this paragraph need not appear.
"Review the application carefully before you sign it. Be
certain that all information has been properly recorded."
Include for each plan, prominently identified in the cover
page, a chart showing the services, Medicare payments, plan
payments, and insured payments for each plan, using the same
language, in the same order, using uniform layout and format.
Sec. 11. Minnesota Statutes 1990, section 62A.42, is
amended to read:
62A.42 [RULEMAKING AUTHORITY.]
To carry out the purposes of sections 62A.31 to 62A.44, the
commissioner may promulgate rules pursuant to chapter 14. These
rules may:
(a) prescribe additional disclosure requirements for
medicare supplement plans, designed to adequately inform the
prospective insured of the need and extent of coverage offered;
(b) prescribe uniform policy forms in order to give the
insurance purchaser a reasonable opportunity to compare the cost
of insuring with various insurers and may prescribe reasonable
measures as necessary to conform Medicare supplement policies
and certificates to the requirements of federal law and
regulations; and
(c) establish other reasonable standards to further the
purpose of sections 62A.31 to 62A.44.
Sec. 12. Minnesota Statutes 1990, section 62A.436, is
amended to read:
62A.436 [COMMISSIONS.]
The commission, sales allowance, service fee, or
compensation to an agent for the sale of a Medicare supplement
plan must be the same for each of the first four years of the
policy. The commissioner may grant a waiver of this restriction
on commissions when the commissioner believes that the insurer's
fee structure does not encourage deceptive practices.
In no event may the rate of commission, sales allowance,
service fee, or compensation for the sale of a basic Medicare
supplement plan exceed that which applies to the sale of an
extended basic Medicare supplement plan.
For purposes of this section, "compensation" includes
pecuniary or nonpecuniary remuneration of any kind relating to
the sale or renewal of the policy or certificate, including but
not limited to bonuses, gifts, prizes, awards, and finder's fees.
This section also applies to sales of replacement policies.
Sec. 13. Minnesota Statutes 1990, section 62A.44, is
amended to read:
62A.44 [APPLICATIONS.]
Subdivision 1. [APPLICANT COPY.] No individual medicare
supplement plan shall be issued or delivered in this state
unless a signed and completed copy of the application for
insurance is left with the applicant at the time application is
made.
Subd. 2. [QUESTIONS.] (a) Application forms shall include
the following questions designed to elicit information as to
whether, as of the date of the application, the applicant has
another Medicare supplement or other health insurance policy or
certificate in force or whether a Medicare supplement policy or
certificate is intended to replace any other accident and
sickness policy or certificate presently in force. A
supplementary application or other form to be signed by the
applicant and agent containing the questions and statements may
be used.
"(1) You do not need more than one Medicare supplement
policy or certificate.
(2) If you are 65 or older, you may be eligible for
benefits under Medicaid and may not need a Medicare
supplement policy or certificate.
(3) The benefits and premiums under your Medicare
supplement policy or certificate will be suspended during
your entitlement to benefits under Medicaid for 24 months.
You must request this suspension within 90 days of becoming
eligible for Medicaid. If you are no longer entitled to
Medicaid, your policy or certificate will be reinstated if
requested within 90 days of losing Medicaid eligibility.
To the best of your knowledge:
(1) Do you have another Medicare supplement policy or
certificate in force, including health care service
contract or health maintenance organization contract? If
so, with which company?
(2) Do you have any other health insurance policies that
provide benefits that this Medicare supplement policy or
certificate would duplicate? (a) If so, with which company?
(3) If the answer to question 1 or 2 is yes, do you intend
to replace these medical or health policies with this
policy or certificate?
(4) Are you covered by Medicaid?"
(b) Agents shall list any other health insurance policies
they have sold to the applicant.
(1) List policies sold that are still in force.
(2) List policies sold in the past five years that are no
longer in force.
(c) In the case of a direct response issuer, a copy of the
application or supplemental form, signed by the applicant, and
acknowledged by the insurer, shall be returned to the applicant
by the insurer on delivery of the policy or certificate.
(d) Upon determining that a sale will involve replacement
of Medicare supplement coverage, any issuer, other than a direct
response issuer, or its agent, shall furnish the applicant,
before issuance or delivery of the Medicare supplement policy or
certificate, a notice regarding replacement of Medicare
supplement coverage. One copy of the notice signed by the
applicant and the agent, except where the coverage is sold
without an agent, shall be provided to the applicant and an
additional signed copy shall be retained by the issuer. A
direct response issuer shall deliver to the applicant at the
time of the issuance of the policy or certificate the notice
regarding replacement of Medicare supplement coverage.
(e) The notice required by paragraph (d) for an issuer
shall be provided in substantially the following form in no less
than 12-point type:
"NOTICE TO APPLICANT REGARDING REPLACEMENT
OF MEDICARE SUPPLEMENT INSURANCE
[Insurance company's name and address]
SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.
According to (your application) (information you have
furnished), you intend to terminate existing Medicare supplement
insurance and replace it with a policy or certificate to be
issued by (Company Name) Insurance Company. Your new policy or
certificate will provide 30 days within which you may decide
without cost whether you desire to keep the policy or
certificate.
You should review this new coverage carefully. Compare it
with all accident and sickness coverage you now have. Terminate
your present policy only if, after due consideration, you find
that purchase of this Medicare supplement coverage is a wise
decision.
STATEMENT TO APPLICANT BY ISSUER, AGENT, (BROKER OR OTHER
REPRESENTATIVE): I have reviewed your current medical or
health insurance coverage. The replacement of insurance
involved in this transaction does not duplicate coverage,
to the best of my knowledge. The replacement policy or
certificate is being purchased for the following reason(s)
(check one):
______ Additional benefits
______ No change in benefits, but lower premiums
______ Fewer benefits and lower premiums
______ Other (please specify)
____________________________________________________________
___________ ________________________________________________
____________________________________________________________
(1) Health conditions which you may presently have
(preexisting conditions) may not be immediately or fully
covered under the new policy or certificate. This could
result in denial or delay of a claim for benefits under the
new policy or certificate, whereas a similar claim might
have been payable under your present policy or certificate.
(2) State law provides that your replacement policy or
certificate may not contain new preexisting conditions,
waiting periods, elimination periods, or probationary
periods. The insurer will waive any time periods
applicable to preexisting conditions, waiting periods,
elimination periods, or probationary periods in the new
policy (or coverage) for similar benefits to the extent the
time was spent (depleted) under the original policy or
certificate.
(3) If you still wish to terminate your present policy or
certificate and replace it with new coverage, be certain to
truthfully and completely answer all questions on the
application concerning your medical and health history.
Failure to include all material medical information on an
application may provide a basis for the company to deny any
future claims and to refund your premium as though your
policy or certificate had never been in force. After the
application has been completed and before you sign it,
review it carefully to be certain that all information has
been properly recorded. (If the policy or certificate is
guaranteed issue, this paragraph need not appear.)
Do not cancel your present policy or certificate until you
have received your new policy or certificate and are you
sure that you want to keep it.
_____________________________________________________
(Signature of Agent, Broker, or Other Representative)*
_____________________________________________________
(Typed Name and Address of Issuer, Agent, or Broker)
_____________________
(Date)
__________________________________
(Applicant's Signature)
_____________________
(Date)
*Signature not required for direct response sales."
(f) Paragraph (e), clauses (1) and (2), of the replacement
notice (applicable to preexisting conditions) may be deleted by
an issuer if the replacement does not involve application of a
new preexisting condition limitation.
Sec. 14. Minnesota Statutes 1990, section 62E.07, is
amended to read:
62E.07 [QUALIFIED MEDICARE SUPPLEMENT PLAN.]
Any plan which provides benefits to persons over the age of
65 years may be certified as a qualified Medicare supplement
plan if the plan is designed to supplement Medicare and provides
coverage of 100 percent of the deductibles required under
Medicare and 80 percent of the charges for covered services
described in section 62E.06, subdivision 1, which charges are
not paid by Medicare. The coverage shall include a limitation
of $1,000 per person on total annual out-of-pocket expenses for
the covered services. The coverage may be subject to a maximum
lifetime benefit of not less than $500,000.
Sec. 15. Minnesota Statutes 1991 Supplement, section
62E.10, subdivision 9, is amended to read:
Subd. 9. [EXPERIMENTAL DELIVERY METHOD.] The association
may petition the commissioner of commerce for a waiver to allow
the experimental use of alternative means of health care
delivery. The commissioner may approve the use of the
alternative means the commissioner considers appropriate. The
commissioner may waive any of the requirements of this chapter
and chapters 60A, 62A, and 62D in granting the waiver. The
commissioner may also grant to the association any additional
powers as are necessary to facilitate the specific waiver,
including the power to implement a provider payment schedule.
This subdivision is effective until August 1, 1992 1993.
Sec. 16. Minnesota Statutes 1991 Supplement, section
62E.12, is amended to read:
62E.12 [MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE
PLAN.]
The association through its comprehensive health insurance
plan shall offer policies which provide the benefits of a number
one qualified plan, and a number two qualified plan, except that
the maximum lifetime benefit on these plans shall be $1,000,000,
and basic and an extended basic plan and a basic Medicare
supplement plans plan as described in sections 62A.31 to 62A.44
and 62E.07. The requirement that a policy issued by the
association must be a qualified plan is satisfied if the
association contracts with a preferred provider network and the
level of benefits for services provided within the network
satisfies the requirements of a qualified plan. If the
association uses a preferred provider network, payments to
nonparticipating providers must meet the minimum requirements of
section 72A.20, subdivision 15. They shall offer health
maintenance organization contracts in those areas of the state
where a health maintenance organization has agreed to make the
coverage available and has been selected as a writing carrier.
Notwithstanding the provisions of section 62E.06 the state plan
shall exclude coverage of services of a private duty nurse other
than on an inpatient basis and any charges for treatment in a
hospital located outside of the state of Minnesota in which the
covered person is receiving treatment for a mental or nervous
disorder, unless similar treatment for the mental or nervous
disorder is medically necessary, unavailable in Minnesota and
provided upon referral by a licensed Minnesota medical
practitioner.
Sec. 17. [FEDERAL CHANGES.]
If the federal government requires additions or changes for
compliance with any provisions of this act that are required by
the federal Omnibus Budget Reconciliation Act of 1990, Public
Law Number 101-508, the commissioner may by order make those
additions or changes. Before issuing an order, the commissioner
shall notify the appropriate policy committees of the
legislature of the additions or changes.
Sec. 18. [EFFECTIVE DATE.]
Sections 1 to 14 and 17 are effective the day following
final enactment and apply to policies or certificates issued
before and after that date. Sections 15 and 16 are effective
the day following final enactment.
ARTICLE 2
Section 1. [62A.318] [MEDICARE SELECT POLICIES AND
CERTIFICATES.]
(a) This section applies to Medicare select policies and
certificates, as defined in this section, including those issued
by health maintenance organizations. No policy or certificate
may be advertised as a Medicare select policy or certificate
unless it meets the requirements of this section.
(b) For the purposes of this section:
(1) "complaint" means any dissatisfaction expressed by an
individual concerning a Medicare select issuer or its network
providers;
(2) "grievance" means dissatisfaction expressed in writing
by an individual insured under a Medicare select policy or
certificate with the administration, claims practices, or
provision of services concerning a Medicare select issuer or its
network providers;
(3) "Medicare select issuer" means an issuer offering, or
seeking to offer, a Medicare select policy or certificate;
(4) "Medicare select policy" or "Medicare select
certificate" means a Medicare supplement policy or certificate
that contains restricted network provisions;
(5) "network provider" means a provider of health care, or
a group of providers of health care, that has entered into a
written agreement with the issuer to provide benefits insured
under a Medicare select policy or certificate;
(6) "restricted network provision" means a provision that
conditions the payment of benefits, in whole or in part, on the
use of network providers; and
(7) "service area" means the geographic area approved by
the commissioner within which an issuer is authorized to offer a
Medicare select policy or certificate.
(c) The commissioner may authorize an issuer to offer a
Medicare select policy or certificate pursuant to this section
and section 4358 of the Omnibus Budget Reconciliation Act (OBRA)
of 1990, Public Law Number 101-508, if the commissioner finds
that the issuer has satisfied all of the requirements of this
section.
(d) A Medicare select issuer shall not issue a Medicare
select policy or certificate in this state until its plan of
operation has been approved by the commissioner.
(e) A Medicare select issuer shall file a proposed plan of
operation with the commissioner, in a format prescribed by the
commissioner. The plan of operation shall contain at least the
following information:
(1) evidence that all covered services that are subject to
restricted network provisions are available and accessible
through network providers, including a demonstration that:
(i) the services can be provided by network providers with
reasonable promptness with respect to geographic location, hours
of operation, and after-hour care. The hours of operation and
availability of after-hour care shall reflect usual practice in
the local area. Geographic availability shall reflect the usual
travel times within the community;
(ii) the number of network providers in the service area is
sufficient, with respect to current and expected policyholders,
either:
(A) to deliver adequately all services that are subject to
a restricted network provision; or
(B) to make appropriate referrals;
(iii) there are written agreements with network providers
describing specific responsibilities;
(iv) emergency care is available 24 hours per day and seven
days per week; and
(v) in the case of covered services that are subject to a
restricted network provision and are provided on a prepaid
basis, there are written agreements with network providers
prohibiting the providers from billing or otherwise seeking
reimbursement from or recourse against an individual insured
under a Medicare select policy or certificate. This section
does not apply to supplemental charges or coinsurance amounts as
stated in the Medicare select policy or certificate;
(2) a statement or map providing a clear description of the
service area;
(3) a description of the grievance procedure to be used;
(4) a description of the quality assurance program,
including:
(i) the formal organizational structure;
(ii) the written criteria for selection, retention, and
removal of network providers; and
(iii) the procedures for evaluating quality of care
provided by network providers, and the process to initiate
corrective action when warranted;
(5) a list and description, by specialty, of the network
providers;
(6) copies of the written information proposed to be used
by the issuer to comply with paragraph (i); and
(7) any other information requested by the commissioner.
(f) A Medicare select issuer shall file proposed changes to
the plan of operation, except for changes to the list of network
providers, with the commissioner before implementing the
changes. The changes shall be considered approved by the
commissioner after 30 days unless specifically disapproved.
An updated list of network providers shall be filed with
the commissioner at least quarterly.
(g) A Medicare select policy or certificate shall not
restrict payment for covered services provided by nonnetwork
providers if:
(1) the services are for symptoms requiring emergency care
or are immediately required for an unforeseen illness, injury,
or condition; and
(2) it is not reasonable to obtain the services through a
network provider.
(h) A Medicare select policy or certificate shall provide
payment for full coverage under the policy or certificate for
covered services that are not available through network
providers.
(i) A Medicare select issuer shall make full and fair
disclosure in writing of the provisions, restrictions, and
limitations of the Medicare select policy or certificate to each
applicant. This disclosure must include at least the following:
(1) an outline of coverage sufficient to permit the
applicant to compare the coverage and premiums of the Medicare
select policy or certificate with:
(i) other Medicare supplement policies or certificates
offered by the issuer; and
(ii) other Medicare select policies or certificates;
(2) a description, including address, phone number, and
hours of operation, of the network providers, including primary
care physicians, specialty physicians, hospitals, and other
providers;
(3) a description of the restricted network provisions,
including payments for coinsurance and deductibles when
providers other than network providers are used;
(4) a description of coverage for emergency and urgently
needed care and other out-of-service area coverage;
(5) a description of limitations on referrals to restricted
network providers and to other providers;
(6) a description of the policyholder's rights to purchase
any other Medicare supplement policy or certificate otherwise
offered by the issuer; and
(7) a description of the Medicare select issuer's quality
assurance program and grievance procedure.
(j) Before the sale of a Medicare select policy or
certificate, a Medicare select issuer shall obtain from the
applicant a signed and dated form stating that the applicant has
received the information provided pursuant to paragraph (i) and
that the applicant understands the restrictions of the Medicare
select policy or certificate.
(k) A Medicare select issuer shall have and use procedures
for hearing complaints and resolving written grievances from the
subscribers. The procedures shall be aimed at mutual agreement
for settlement and may include arbitration procedures.
(1) The grievance procedure must be described in the policy
and certificates and in the outline of coverage.
(2) At the time the policy or certificate is issued, the
issuer shall provide detailed information to the policyholder
describing how a grievance may be registered with the issuer.
(3) Grievances must be considered in a timely manner and
must be transmitted to appropriate decision makers who have
authority to fully investigate the issue and take corrective
action.
(4) If a grievance is found to be valid, corrective action
must be taken promptly.
(5) All concerned parties must be notified about the
results of a grievance.
(6) The issuer shall report no later than March 31 of each
year to the commissioner regarding the grievance procedure. The
report shall be in a format prescribed by the commissioner and
shall contain the number of grievances filed in the past year
and a summary of the subject, nature, and resolution of the
grievances.
(l) At the time of initial purchase, a Medicare select
issuer shall make available to each applicant for a Medicare
select policy or certificate the opportunity to purchase a
Medicare supplement policy or certificate otherwise offered by
the issuer.
(m)(1) At the request of an individual insured under a
Medicare select policy or certificate, a Medicare select issuer
shall make available to the individual insured the opportunity
to purchase a Medicare supplement policy or certificate offered
by the issuer that has comparable or lesser benefits and that
does not contain a restricted network provision. The issuer
shall make the policies or certificates available without
requiring evidence of insurability after the Medicare supplement
policy or certificate has been in force for six months. If the
issuer does not have available for sale a policy or certificate
without restrictive network provisions, the issuer shall provide
enrollment information for the Minnesota comprehensive health
association Medicare supplement plans.
(2) For the purposes of this paragraph, a Medicare
supplement policy or certificate will be considered to have
comparable or lesser benefits unless it contains one or more
significant benefits not included in the Medicare select policy
or certificate being replaced. For the purposes of this
paragraph, a significant benefit means coverage for the Medicare
part A deductible, coverage for prescription drugs, coverage for
at-home recovery services, or coverage for part B excess charges.
(n) Medicare select policies and certificates shall provide
for continuation of coverage if the secretary of health and
human services determines that Medicare select policies and
certificates issued pursuant to this section should be
discontinued due to either the failure of the Medicare select
program to be reauthorized under law or its substantial
amendment.
(1) Each Medicare select issuer shall make available to
each individual insured under a Medicare select policy or
certificate the opportunity to purchase a Medicare supplement
policy or certificate offered by the issuer that has comparable
or lesser benefits and that does not contain a restricted
network provision. The issuer shall make the policies and
certificates available without requiring evidence of
insurability.
(2) For the purposes of this paragraph, a Medicare
supplement policy or certificate will be considered to have
comparable or lesser benefits unless it contains one or more
significant benefits not included in the Medicare select policy
or certificate being replaced. For the purposes of this
paragraph, a significant benefit means coverage for the Medicare
part A deductible, coverage for prescription drugs, coverage for
at-home recovery services, or coverage for part B excess charges.
(o) A Medicare select issuer shall comply with reasonable
requests for data made by state or federal agencies, including
the United States Department of Health and Human Services, for
the purpose of evaluating the Medicare select program.
(p) Medicare select policies and certificates under this
section shall be regulated and approved by the department of
commerce.
(q) Medicare select policies and certificates must be
either a basic plan or an extended basic plan. The basic plan
may also include any of the optional benefit riders authorized
by section 62A.316. Preventive care provided by Medicare select
policies or certificates must be provided as set forth in
section 62A.315 or 62A.316, except that the benefits are as
defined in chapter 62D.
(r) Medicare select policies and certificates are exempt
from the requirements of section 62A.31, subdivision 1,
paragraph (d). This paragraph expires January 1, 1994.
Sec. 2. [EFFECTIVE DATE.]
Section 1 is effective July 30, 1992, and applies to
policies or certificates issued on or after that date.
Presented to the governor April 17, 1992
Signed by the governor April 29, 1992, 8:08 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes