Title of Regulation: 14VAC5-211. Rules Governing Health Maintenance Organizations (amending 14VAC5-211-70, 14VAC5-211-160).

Statutory Authority: §§ 12.1-13 and 38.2-223 of the Code of Virginia.

Effective Date: January 1, 2011.

Agency Contact: Althelia Battle, Chief Insurance Market Examiner, Bureau of Insurance, State Corporation Commission, P.O. Box 1157, Richmond, VA 23218, telephone (804) 371-9154, FAX (804) 371-9944, or email al.battle@scc.virginia.gov.

Summary:

The amendments conform the regulation to amendments made to (i) § 38.2-3541 of the Code of Virginia regarding group health insurance continuation and conversion requirements and (ii) § 38.2-3412.1 of the Code of Virginia regarding mental health parity for large employer groups.

As a result of comments filed by the Virginia Association of Health Plans, the proposed regulations are amended to (i) change references from "group policy" to "group contract;" (ii) add language indicating that the continuation of coverage provisions are not applicable if continuation of coverage is required under the Consolidated Omnibus Budget Reconciliation Act; and (iii) change the reference from "insurer's current rate" to "health care plan's current rate."

AT RICHMOND, AUGUST 31, 2010

COMMONWEALTH OF VIRGINIA

At the relation of the

STATE CORPORATION COMMISSION

CASE NO. INS-2010-00118

Ex Parte: In the matter of
Adopting Amendments to the
Rules Governing Health
Maintenance Organizations

ORDER ADOPTING AMENDMENTS TO RULES

By Order entered herein June 29, 2010, all interested persons were ordered to take notice that subsequent to August 16, 2010, the State Corporation Commission ("Commission") would consider the entry of an order adopting amendments proposed by the Bureau of Insurance ("Bureau") to the Commission's Rules Governing Health Maintenance Organizations ("Rules"), set forth in Chapter 211 of Title 14 of the Virginia Administrative Code, unless on or before August 16, 2010, any person objecting to the adoption of the proposed amendments filed a request for hearing with the Clerk of the Commission (the "Clerk").

The Order to Take Notice also required all interested persons to file their comments in support of or in opposition to the proposed amendments on or before August 16, 2010.

Comments were filed by the Virginia Association of Health Plans ("VAHP") on August 13, 2010. No request for a hearing was filed with the Clerk.

The Bureau considered the comments filed by the VAHP, and responded to these comments by letter dated August 23, 2010, a copy of which is filed in the case file. The Bureau recommends that the proposed rules be amended at 14 VAC 5-211-70 in response to these comments as follows:

- change references from "group policy" to "group contract";

- add language indicating that the continuation of coverage provisions are not applicable if continuation of coverage is required under COBRA; and

- change the reference from "insurer's" to "health care plan's" current rate.

The amendments to the Rules are necessary to conform the Rules to (i) amendments made to § 38.2-3541 of the Code of Virginia regarding group health insurance continuation and conversion requirements and (ii) § 38.2-3412.1 of the Code of Virginia regarding mental health parity.

THE COMMISSION, having considered the proposed amendments, the filed comments, the Bureau's letter response, and the Bureau's recommendation for additional amendments, is of the opinion that the attached amendments to the Rules should be adopted.

THEREFORE IT IS ORDERED THAT:

(1) The amendments to Chapter 211 of Title 14 of the Virginia Administrative Code entitled "Rules Governing Health Maintenance Organizations," amended at 14 VAC 5-211-70 and 14 VAC 5-211-160, which are attached hereto and made a part hereof, should be, and they are hereby, ADOPTED to be effective January 1, 2011.

(2) AN ATTESTED COPY hereof, together with a copy of the adopted amendments, shall be sent by the Clerk of the Commission to Jacqueline K. Cunningham, Deputy Commissioner, Bureau of Insurance, State Corporation Commission, who forthwith shall give further notice of the adoption of the amendments to the Rules by mailing a copy of this Order, including a clean copy of the final amended Rules, to all insurers licensed by the Commission as health maintenance organizations in the Commonwealth of Virginia, as well as all interested parties.

(3) The Commission's Division of Information Resources shall cause a copy of this Order, together with the amended Rules, to be forwarded to the Virginia Registrar of the Regulations for appropriate publication in the Virginia Register of Regulations and shall make this Order and the attached amended Rules available on the Commission's website, http://www.scc.virginia.gov/case.

(4) The Bureau shall file with the Clerk of the Commission an affidavit of compliance with the notice requirements of paragraph (2) above.

14VAC5-211-70. Conversion of coverage.

A. A health care plan shall offer to its group contract holders, for an enrollee whose eligibility for coverage terminates under the group contract, the options to convert to an individual policy or continue coverage as set forth in this section. The group contract holder shall select one of the following options:

1. Conversion of coverage within 31 days after issuance of the written notice required in subsection C of this section, but in no event beyond the 60-day period following the date of termination of the enrollee's coverage under the group contract, to an individual contract that provides benefits which, at a minimum, meet the requirements of basic or limited health care services as applicable, in accordance with this chapter. Coverage shall not be refused on the basis that the enrollee no longer resides or is employed in the health maintenance organization's service area. The conversion contract shall cover the enrollee covered under the group contract as of the date of termination of the enrollee's coverage under the group contract. Coverage shall be provided without additional evidence of insurability, and no preexisting condition limitations or exclusions may be imposed other than those remaining unexpired under the contract from which conversion is exercised. A probationary or waiting period set forth in the conversion contract shall be deemed to commence on the effective date of coverage under the original contract.

2. Continuation of coverage under the existing group contract for a period of at least 90 days 12 months immediately following the date of termination of the enrollee's eligibility for coverage under the group [ policy contract ]. [ Continuation coverage shall not be applicable if the group contract holder is required by federal law to provide for continuation of coverage under its group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA) (P.L. 99-272). ] Coverage shall be provided without additional evidence of insurability. The premium for continuing group coverage shall be at the current rate applicable to the group contract subject to the following requirements:

a. The application and payment for the extended coverage is made to the group contract holder within 31 days after issuance of the written notice required in subsection C of this section, but in no event beyond the 60-day period following the date of the termination of the person's eligibility;

b. Each premium for the extended coverage is timely paid to the group contract holder on a monthly basis during the 12-month period; and

c. The premium for continuing the group coverage shall be at the [ insurer's health care plan's ] current rate applicable to the group [ policy contract ] plus any applicable administrative fee not to exceed 2.0% of the current rate.

B. A conversion contract or continuation of coverage shall not be required to be made available when:

1. The enrollee is covered by or is eligible for benefits under Title XVIII of the Social Security Act (42 USC § 1395 et seq.) known as Medicare;

2. The enrollee is covered by or is eligible for substantially the same level of hospital, medical, and surgical benefits under state or federal law;

3. The enrollee is covered by substantially the same level of benefits under any policy, contract, or plan for individuals in a group;

4. The enrollee has not been continuously covered during the three-month period immediately preceding the enrollee's termination of coverage;

5. The enrollee was terminated by the health care plan for any of the reasons stated in 14VAC5-211-230 A 1, 2, 3, or 6; or

6. The enrollee was terminated from a plan administered by the Department of Medical Assistance Services that provided benefits pursuant to Title XIX or XXI of the Social Security Act (42 USC § 1396 et seq. or § 1397 aa et seq.).

C. The group contract holder shall provide each enrollee or other person covered under the [ policy group contract ] written notice of the availability of the option chosen and the procedures and timeframes for obtaining continuation or conversion of the group contract. The notice shall be provided within 14 days of the group contract holder's knowledge of the enrollee's or other covered person's loss of eligibility under the group contract.

Part IV
Services

14VAC5-211-160. Basic health care services.

A health maintenance organization shall provide, or arrange for the provision of, as a minimum, basic health care services. These services shall include the following:

1. Inpatient hospital and physician services. Medically necessary hospital and physician services affording inpatient treatment to enrollees in a licensed hospital for a minimum of 90 days per contract or calendar year. Hospital services include room and board; general nursing care; special diets when medically necessary; use of operating room and related facilities; use of intensive care unit and services; x-ray, laboratory, and other diagnostic tests; drugs, medications, biologicals, anesthesia, and oxygen services; special duty nursing when medically necessary; short-term physical therapy, radiation therapy, and inhalation therapy; administration of whole blood and blood plasma; and short-term rehabilitation services. Physician services include medically necessary health care services performed, prescribed, or supervised by physicians within a hospital for registered bed patients;.

2. Outpatient medical services. Medically necessary health care services performed, prescribed or supervised by physicians for enrollees, which may be provided in a nonhospital based health care facility, at a hospital, in a physician's office, or in the enrollee's home, and shall include consultation and referral services. Outpatient medical services shall also include diagnostic services, treatment services, short-term physical therapy and rehabilitation services the provision of which the health maintenance organization determines can be expected to result in the significant improvement of a member's condition within a period of 90 days, laboratory services, x-ray services, and outpatient surgery;.

3. Diagnostic laboratory and diagnostic and therapeutic radiologic services;.

4. Preventive health services. Services provided with the goal of early detection and minimization of the ill effects and causes of disease or disability, including well-child care from birth, eye and ear examinations for children age 17 and under to determine the need for vision and hearing correction, periodic health evaluations, and immunizations;.

5. In-area and out-of-area emergency services, including medically necessary ambulance services, available on an inpatient or an outpatient basis 24 hours per day, seven days per week;.

6. Mental health and substance use disorder services as follows:

a. Medically necessary services for the treatment of biologically based mental illnesses as defined in § 38.2-3412.1:01 of the Code of Virginia.; and

Treatment b. Except for a group contract issued to a large employer as defined in § 38.2-3431 of the Code of Virginia, services for the treatment of all other mental health and substance abuse services use disorders shall at a minimum include:

a. (1) Inpatient services or partial hospitalization for an adult for a minimum period of 20 days per enrollee per contract year;

b. (2) Inpatient services or partial hospitalization for a child or adolescent for a minimum period of 25 days per enrollee per contract year; and

c. (3) Twenty outpatient visits per enrollee per contract year. A medication management visit shall be covered in the same manner as a medication management visit for the treatment of a physical illness and shall not be counted as an outpatient treatment visit in the calculation of the benefit set forth is in this subdivision.

The limits of the benefits set forth in this subdivision shall not be more restrictive than for any other illness, however, the coinsurance applicable to any outpatient visit beyond the first five visits covered per contract year shall not exceed 50%. If all covered expenses for outpatient services apply toward any deductible required by a policy or contract, the visit shall not count toward the outpatient visit benefit maximum set forth in the policy or contract. Definitions set forth in § 38.2-3412.1 of the Code of Virginia shall be applicable to terms used in this subsection.

Group contracts issued to a large employer as defined in § 38.2-3431 of the Code of Virginia shall provide mental health and substance use disorder benefits on parity with the medical and surgical benefits contained in the plan in accordance with the Mental Health Parity and Addiction Equity Act of 2008 (P.L. 110-343).

7. Medically necessary dental services as a result of accidental injury, regardless of the date of such injury. Contracts may require that treatment be sought within 60 days of the accident for injuries occurring on or after the effective date of coverage.