Citations Affected: IC 27-8-10.
Synopsis: ICHIA amendments. Amends the comprehensive health insurance association
(ICHIA) law concerning: (1) premium rates; (2) assessments; (3) tax credits; (4) reporting
requirements; (5) member and health care provider grievances; (6) reimbursement rates; (7)
provider contracting; (8) balance billing. Makes technical corrections and conforming
amendments. Repeals sections concerning Medicaid payment programs. Makes an appropriation.
(This conference committee report amends EHB 1273 to: (1) specify that a consumer price
index based premium rate adjustment may not cause a premium rate to exceed the
statutory limitation on the rate; (2) sunset the consumer price index based premium rate
adjustment on June 30, 2006; (3) delete an alternative ICHIA reimbursement method
that specified a minimum reimbursement of the Medicare rate plus 8.5%; (4) change the
effective date of the balance billing prohibition from April 1, 2004 to upon passage; (5)
correct a conflict with SEA 106-2004; (6) allow an insured who was balance billed by a
health care provider after June 30, 2003, and before passage of this act, and who paid the
provider, to submit proof of payment to ICHIA not later than December 31, 2004, for
reimbursement from ICHIA; (7) require costs of balance billing reimbursements to be
assessed to members; and (8) prohibit balance billing after passage, regardless of when
the health care services were provided.)
Effective: Upon passage; January 1, 2004 (retroactive); March 15, 2004 (retroactive); July 1,
2004; January 1, 2005.
MR. SPEAKER:
Your Conference Committee appointed to confer with a like committee from the Senate
upon Engrossed Senate Amendments to Engrossed House Bill No. 1273 respectfully
reports that said two committees have conferred and agreed as follows to wit:
that the House recede from its dissent from all Senate amendments and that
the House now concur in all Senate amendments to the bill and that the bill
be further amended as follows:
Delete everything after the enacting clause and insert the following:
commissioner from the members of the association, one (1) of
which must be a representative of a health maintenance
organization.
(2) Two (2) members to be appointed by the commissioner shall be
consumers representing policyholders.
(3) Two (2) members shall be the state budget director or designee
and the commissioner of the department of insurance or designee.
(4) One (1) member to be appointed by the commissioner must be
a representative of health care providers.
The commissioner shall appoint the chairman of the board, and the
board shall elect a secretary from its membership. The term of office
of each appointed member is three (3) years, subject to eligibility for
reappointment. Members of the board who are not state employees may
be reimbursed from the association's funds for expenses incurred in
attending meetings. The board shall meet at least semiannually, with the
first meeting to be held not later than May 15 of each year.
(c) The association shall submit to the commissioner a plan of
operation for the association and any amendments to the plan necessary
or suitable to assure the fair, reasonable, and equitable administration of
the association. The plan of operation becomes effective upon approval
in writing by the commissioner consistent with the date on which the
coverage under this chapter must be made available. The commissioner
shall, after notice and hearing, approve the plan of operation if the plan
is determined to be suitable to assure the fair, reasonable, and equitable
administration of the association and provides for the sharing of
association losses on an equitable, proportionate basis among the
member carriers, health maintenance organizations, limited service
health maintenance organizations, and self-insurers. If the association
fails to submit a suitable plan of operation within one hundred eighty
(180) days after the appointment of the board of directors, or at any
time thereafter the association fails to submit suitable amendments to
the plan, the commissioner shall adopt rules under IC 4-22-2 necessary
or advisable to implement this section. These rules are effective until
modified by the commissioner or superseded by a plan submitted by the
association and approved by the commissioner. The plan of operation
must:
(1) establish procedures for the handling and accounting of assets
and money of the association;
(2) establish the amount and method of reimbursing members of
the board;
(3) establish regular times and places for meetings of the board of
directors;
(4) establish procedures for records to be kept of all financial
transactions and for the annual fiscal reporting to the
commissioner;
(5) establish procedures whereby selections for the board of
directors will be made and submitted to the commissioner for
approval;
(6) contain additional provisions necessary or proper for the
execution of the powers and duties of the association; and
applicant eligible without demonstrating a rejection of coverage by
one (1) carrier.
(13) Provide for the use of managed care plans for insureds,
including the use of:
(A) health maintenance organizations; and
(B) preferred provider plans.
(14) Solicit bids directly from providers for coverage under this
chapter.
(15) Subject to section 3 of this chapter, negotiate
reimbursement rates and enter into contracts with individual
health care providers and health care provider groups.
(f) The board shall obtain an actuarial recommendation for
development of an equitable methodology for determination of member
assessments.
(g) Rates for coverages issued by the association may not be
unreasonable in relation to the benefits provided, the risk experience,
and the reasonable expenses of providing the coverage. Separate scales
of premium rates based on age apply for individual risks. Premium rates
must take into consideration the extra morbidity and administration
expenses, if any, for risks insured in the association. The rates for a
given classification may not be:
(1) not more than one hundred fifty percent (150%) of the average
premium rate for that class charged by the five (5) carriers with the
largest premium volume in the state during the preceding calendar
year for an insured whose family income is less than three hundred
fifty-one percent (351%) of the federal income poverty level for the
same size family; and
(2) an amount equal to:
(A) not less than one hundred fifty-one percent (151%); and
(B) not more than two hundred percent (200%);
of the average premium rate for that class charged by the five (5)
carriers with the largest premium volume in the state during the
preceding calendar year, for an insured whose family income is
more than three hundred fifty percent (350%) of the federal income
poverty level for the same size family.
In determining the average rate of the five (5) largest carriers, the rates
charged by the carriers shall be actuarially adjusted to determine the rate
that would have been charged for benefits substantially identical to
those issued by the association. Additionally, subject to the
limitations set forth in subdivisions (1) and (2), the association
may, on October 1 of each year, adjust the rates as described in
section 2.2 of this chapter. All rates adopted by the association must
be submitted to the commissioner for approval.
(g) (h) Following the close of the association's fiscal year, the
association shall determine the net premiums, the expenses of
administration, and the incurred losses for the year. Twenty-five
percent (25%) of any net loss shall be assessed by the association to
all members in proportion to their respective shares of total health
insurance premiums as reported to the department of insurance,
excluding premiums for Medicaid contracts with the state of Indiana,
received in Indiana during the calendar year (or with paid losses in the
year) coinciding with or ending during the fiscal year of the association.
or any other equitable basis as may be provided in the plan of operation.
For self-insurers, health maintenance organizations, and limited service
health maintenance organizations that are members of the association,
the proportionate share of losses must be determined through the
application of an equitable formula based upon claims paid, excluding
claims for Medicaid contracts with the state of Indiana, or the value of
services provided. Seventy-five percent (75%) of any net loss shall
be paid by the state. In sharing losses, the association may abate or
defer in any part the assessment of a member, if, in the opinion of the
board, payment of the assessment would endanger the ability of the
member to fulfill its contractual obligations. The association may also
provide for interim assessments against members of the association if
necessary to assure the financial capability of the association to meet
the incurred or estimated claims expenses or operating expenses of the
association until the association's next fiscal year is completed. Except
as provided in sections 12 and 13 of this chapter, Net gains, if any,
must be held at interest to offset future losses or allocated to reduce
future premiums. Assessments must be determined by the board
members specified in subsection (b)(1), subject to final approval by the
commissioner.
(h) (i) The association shall conduct periodic audits to assure the
general accuracy of the financial data submitted to the association, and
the association shall have an annual audit of its operations by an
independent certified public accountant.
(i) (j) The association is subject to examination by the department of
insurance under IC 27-1-3.1. The board of directors shall submit, not
later than March 30 of each year, a financial report for the preceding
calendar year in a form approved by the commissioner.
(j) (k) All policy forms issued by the association must conform in
substance to prototype forms developed by the association, must in all
other respects conform to the requirements of this chapter, and must
be filed with and approved by the commissioner before their use.
(k) (l) The association may not issue an association policy to any
individual who, on the effective date of the coverage applied for, does
not meet the eligibility requirements of section 5.1 of this chapter.
(l) The association shall pay an agent's insurance producer's referral
fee of twenty-five dollars ($25) to each insurance agent producer who
refers an applicant to the association if that applicant is accepted.
(m) (l) The association and the premium collected by the association
shall be exempt from the premium tax, the adjusted gross income tax,
or any combination of these upon revenues or income that may be
imposed by the state.
(n) (m) Members who, after July 1, 1983, during any calendar year,
have paid one (1) or more assessments levied under this chapter may
either:
(1) take a credit against premium taxes, adjusted gross income
taxes, or any combination of these, or similar taxes upon revenues
or income of member insurers that may be imposed by the state, up
to the amount of the taxes due for each calendar year in which the
assessments were paid and for succeeding years until the aggregate
of those assessments have been offset by either credits against
those taxes or refunds from the association; or
(2) any member insurer may include in the rates for premiums
charged for insurance policies to which this chapter applies
amounts sufficient to recoup a sum equal to the amounts paid to
the association by the member less any amounts returned to the
member insurer by the association, and the rates shall not be
deemed excessive by virtue of including an amount reasonably
calculated to recoup assessments paid by the member.
(o) (n) The association shall provide for the option of monthly
collection of premiums.
(o) The association shall periodically certify to the budget agency
the amount necessary to pay seventy-five percent (75%) of any
net loss as specified in subsection (g).
credit has not been taken under section 2.1 (as in effect December
31, 2004) or 2.4 of this chapter as of the date of the report.
under an association policy;
the member or health care provider shall, not more than ninety
(90) days after the act occurs, appeal to the board of directors for
review of the act.
(b) If:
(1) within thirty (30) days after an appeal is filed under
subsection (a), the board of directors has not acted on the
appeal; or
(2) a member or health care provider is aggrieved by a final
action or decision of the board of directors;
the member or health care provider may appeal to the
commissioner.
(c) An appeal to the commissioner under subsection (b) must be
filed less than thirty (30) days after the:
(1) expiration of the thirty (30) day period specified in
subsection (b)(1); or
(2) action or decision specified in subsection (b)(2).
(d) The commissioner shall, not more than forty-five (45) days
after an appeal is filed under subsection (c), take a final action or
issue an order regarding the appeal.
(e) A final action or order of the commissioner on an appeal
filed under this section is subject to judicial review.
(f) If a member or health care provider sues the association, the
court shall not award to the member or health care provider:
(1) attorney's fees or costs; or
(2) punitive damages.
Consumer Price Index for all Urban Consumers, as published
by the United States Bureau of Labor Statistics during the
preceding calendar year.
(2) A health care provider network arrangement. If payment
is based on a health care provider network arrangement,
reimbursement under an association policy must be made
according to:
(A) a network fee schedule for network health care
providers and nonnetwork health care providers; and
(B) any additional coinsurance that applies to the insured
under the association policy if the insured obtains health
care services from a nonnetwork health care provider.
(b) Eligible expenses are the charges for the following health care
services and articles to the extent furnished by a health care provider in
an emergency situation or furnished or prescribed by a physician:
(1) Hospital services, including charges for the institution's most
common semiprivate room, and for private room only when
medically necessary, but limited to a total of one hundred eighty
(180) days in a year.
(2) Professional services for the diagnosis or treatment of injuries,
illnesses, or conditions, other than mental or dental, that are
rendered by a physician or, at the physician's direction, by the
physician's staff of registered or licensed nurses, and allied health
professionals.
(3) The first twenty (20) professional visits for the diagnosis or
treatment of one (1) or more mental conditions rendered during the
year by one (1) or more physicians or, at their direction, by their
staff of registered or licensed nurses, and allied health
professionals.
(4) Drugs and contraceptive devices requiring a physician's
prescription.
(5) Services of a skilled nursing facility for not more than one
hundred eighty (180) days in a year.
(6) Services of a home health agency up to two hundred seventy
(270) days of service a year.
(7) Use of radium or other radioactive materials.
(8) Oxygen.
(9) Anesthetics.
(10) Prostheses, other than dental.
(11) Rental of durable medical equipment which has no personal
use in the absence of the condition for which prescribed.
(12) Diagnostic X-rays and laboratory tests.
(13) Oral surgery for:
(A) excision of partially or completely erupted impacted teeth;
(B) excision of a tooth root without the extraction of the entire
tooth; or
(C) the gums and tissues of the mouth when not performed in
connection with the extraction or repair of teeth.
(14) Services of a physical therapist and services of a speech
therapist.
(15) Professional ambulance services to the nearest health care
facility qualified to treat the illness or injury.
(16) Other medical supplies required by a physician's orders.
An association policy may also include comparable benefits for those
who rely upon spiritual means through prayer alone for healing upon
such conditions, limitations, and requirements as may be determined by
the board of directors.
(b) (c) A managed care organization that issues an association policy
may not refuse to enter into an agreement with a hospital solely because
the hospital has not obtained accreditation from an accreditation
organization that:
(1) establishes standards for the organization and operation of
hospitals;
(2) requires the hospital to undergo a survey process for a fee paid
by the hospital; and
(3) was organized and formed in 1951.
(c) (d) This section does not prohibit a managed care organization
from using performance indicators or quality standards that:
(1) are developed by private organizations; and
(2) do not rely upon a survey process for a fee charged to the
hospital to evaluate performance.
(d) (e) For purposes of this section, if benefits are provided in the
form of services rather than cash payments, their value shall be
determined on the basis of their monetary equivalency.
(e) (f) The following are not eligible expenses in any association
policy within the scope of this chapter:
(1) Services for which a charge is not made in the absence of
insurance or for which there is no legal obligation on the part of the
patient to pay.
(2) Services and charges made for benefits provided under the laws
of the United States, including Medicare and Medicaid, military
service connected disabilities, medical services provided for
members of the armed forces and their dependents or for
employees of the armed forces of the United States, medical
services financed in the future on behalf of all citizens by the United
States.
(3) Benefits which would duplicate the provision of services or
payment of charges for any care for injury or disease either:
(A) arising out of and in the course of an employment subject to
a worker's compensation or similar law; or
(B) for which benefits are payable without regard to fault under
a coverage statutorily required to be contained in any motor
vehicle or other liability insurance policy or equivalent
self-insurance.
However, this subdivision does not authorize exclusion of charges
that exceed the benefits payable under the applicable worker's
compensation or no-fault coverage.
(4) Care which is primarily for a custodial or domiciliary purpose.
(5) Cosmetic surgery unless provided as a result of an injury or
medically necessary surgical procedure.
(6) Any charge for services or articles the provision of which is not
within the scope of the license or certificate of the institution or
individual rendering the services.
(f) (g) The coverage and benefit requirements of this section for
association policies may not be altered by any other inconsistent state
law without specific reference to this chapter indicating a legislative
intent to add or delete from the coverage requirements of this chapter.
(g) (h) This chapter does not prohibit the association from issuing
additional types of health insurance policies with different types of
benefits that, in the opinion of the board of directors, may be of benefit
to the citizens of Indiana.
(h) (i) This chapter does not prohibit the association or its
administrator from implementing uniform procedures to review the
medical necessity and cost effectiveness of proposed treatment,
confinement, tests, or other medical procedures. Those procedures may
take the form of preadmission review for nonemergency hospitalization,
case management review to verify that covered individuals are aware of
treatment alternatives, or other forms of utilization review. Any cost
containment techniques of this type must be adopted by the board of
directors and approved by the commissioner.
association.
(b) This section expires March 15, 2004. January 1, 2005.
the association according to the member assessment methodology
in effect on the date of the assessment under:
(1) IC 27-8-10; or
(2) SECTION 11 of this act.
(d) This SECTION expires December 31, 2006.
____________________________ ____________________________
Representative Fry Senator Miller
Chairperson
____________________________ ____________________________
Representative Ripley Senator Lanane
House Conferees Senate Conferees