Bill Summary – FastDemocracy

8069.01000
     Sixty-sixth
     Legislative Assembly                    SENATE BILL NO. 2102
     of North Dakota
     Introduced by
       Industry, Business and Labor Committee
       (At the request of the Insurance Commissioner)
  A BILL for an Act to create and enact chapter 26.1-53.1 of the North Dakota Century Code,
  relating to discount plans; and to repeal chapter 26.1-53 of the North Dakota Century Code,
  relating to discount medical plans.
  BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
      SECTION 1. Chapter 26.1-53.1 of the North Dakota Century Code is created and enacted
  as follows:
      26.1-53.1-01. Definitions.
      For purposes of this chapter, unless the context otherwise requires:
      1.   "Affiliate" means a person that directly, or indirectly through one or more
          intermediaries, controls, or is controlled by, or is under common control with, the
          person specified.
     2.   "Ancillary services" includes audiology, dental, vision, mental health, substance abuse,
          chiropractic, and podiatry services.
     3.   "Control", "controlled by", or "under control with" means the possession, direct or
          indirect, of the power to direct or cause the direction of the management and policies
          of a person, whether through the ownership of voting securities, by contract other than
          a commercial contract for goods or nonmanagement services, or otherwise, unless the
          power is the result of an official position with or corporate office held by the person.
          Control is presumed to exist if any person, directly or indirectly, owns, controls, holds
          with the power to vote, or holds proxies representing ten percent or more of the voting
          securities of any other person. This presumption may be rebutted by a showing made
          in the manner provided by section 26.1-10-04, that control does not exist in fact. The
          commissioner may determine, after furnishing all persons in interest notice and
          opportunity to be heard and making specific findings of fact to support such
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           determination, that control exists in fact, notwithstanding the absence of a presumption
           to that effect.
      4.   "Discount plan" means a business arrangement or contract in which a person, in
           exchange for fees, dues, charges, or other consideration, offers members the access
           to providers of medical or ancillary services and the right to receive discounts on
           medical or ancillary services provided under the discount plan from those providers.
           The term includes a discount prescription drug plan. The term does not include:
           a.   A plan that does not charge a membership, payment, dues, other consideration,
                or other fee to use the discount plan;
          b.   Any product otherwise regulated under title 26.1;
          c.   A patient access program; or
          d.   A Medicare prescription drug plan.
     5.   "Discount plan organization" means an entity that, in exchange for fees, dues,
          charges, or other consideration, provides access for discount plan members to
          providers of medical or ancillary services and the right to receive medical or specialty
          services from those providers at a discount. It is the organization that contracts with
          providers, provider networks, or other discount plan organizations to offer access to
          medical or specialty services at a discount and determines the charge to discount plan
          members.
     6.   "Discount prescription drug plan" means a business arrangement or contract in which
          a person, in exchange for fees, dues, charges, or other consideration, provides
          members the access to providers of pharmacy services and the right to receive
          discounts on pharmacy services provided under the discount prescription drug plan
          from those providers.
     7.   "Facility" means an institution providing medical or ancillary services or a health care
          setting. The term includes:
          a.   A hospital or other licensed inpatient center;
          b.   An ambulatory surgical or treatment center;
          c.   A skilled nursing center;
          d.   A residential treatment center;
          e.   A rehabilitation center; and
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           f.      A diagnostic, laboratory, or imaging center.
      8.   "Health care professional" means a physician, pharmacist, or other health care
           practitioner who is licensed, accredited, or certified to perform specified medical or
           ancillary services within the scope of the professional's license, accreditation,
           certification, or other appropriate authority consistent with state law.
      9.   "Health insurer" means an entity subject to the insurance laws and regulations of this
           state, or subject to the jurisdiction of the commissioner, that contracts or offers to
           contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health
           care services, including a sickness and accident insurance company, a health
          maintenance organization, a nonprofit hospital and health service corporation, or any
          other entity providing a plan of health insurance, health benefits, or medical or
          ancillary services.
    10.   "Marketer" means a person that markets, promotes, sells, or distributes a discount
          plan, including a private label entity that places the entity's name on and markets or
          distributes a discount plan pursuant to a marketing agreement with a discount plan
          organization.
    11.   "Medical services" means any maintenance care of, or preventive care for, the human
          body, or care, service, or treatment of an illness or dysfunction of, or injury to, the
          human body. The term includes physician care, inpatient care, hospital surgical
          services, emergency services, ambulance services, dental care services, vision care
          services, mental health services, substance abuse services, chiropractic services,
          podiatric services, laboratory services, medical equipment and supplies, pharmacy
          services, and ancillary services.
    12.   "Medicare prescription drug plan" means a plan that provides Medicare part D
          prescription drug benefit in accordance with the requirements of the federal Medicare
          Prescription Drug, Improvement, and Modernization Act of 2003 [Pub. L. 108-173].
    13.   "Member" means any individual who pays fees, dues, charges or other consideration
          for the right to receive the benefits of a discount plan or discount prescription drug
          plan.
    14.   "Patient access program" means a voluntary program sponsored by a pharmaceutical
          manufacturer, or a consortium of pharmaceutical manufacturers, which provide free or
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           discounted health care products directly to low-income or uninsured individuals either
           through a discount card or direct shipment.
     15.   "Person" means an individual, a corporation, a partnership, an association, a joint
           venture, a joint stock company, a trust, an unincorporated organization, any similar
           entity, or any combination of the foregoing.
     16.   "Pharmacy services" includes pharmaceutical supplies and prescription drugs.
     17.   "Provider" means any health care professional or facility that has contracted, directly
           or indirectly, with a discount plan organization to provide medical or ancillary services
           to members.
    18.   "Provider network" means an entity that negotiates, directly or indirectly, with a
          discount plan organization on behalf of more than one provider to provide medical or
          ancillary services to members.
    26.1-53.1-02. Application.
     1.   This chapter applies to all discount plan organizations conducting business in this
          state.
     2.   A discount plan organization that is a health insurer licensed pursuant to title 26.1:
          a.   Is not required to be registered as a discount plan organization. However, any of
               the organization's affiliates that operate as a discount plan organization in this
               state shall comply with all provisions of this chapter and must be registered as a
               discount plan organization.
          b.   Is required to comply with sections 26.1-53.1-14 through 26.1-53.1-21.
    26.1-53.1-03. Registration requirements for a discount plan organization - Fees.
     1.   Before doing business in or from this state as a discount plan organization, a discount
          plan organization:
          a.   Must be authorized to transact business in this state through the secretary of
               state; and
          b.   Must be registered by the commissioner to operate as a discount plan
               organization.
     2.   An application for registration under this chapter must be filed with the commissioner
          on a form prescribed by the commissioner.
     3.   The application must demonstrate, set forth, or be accompanied by the following:
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           a.   The five hundred dollar application fee;
           b.   A list of the names, addresses, official positions, and biographical information of
                each individual responsible for conducting the applicant's affairs, including each:
                (1)   Member of the board of directors, board of trustees, executive committee, or
                      other governing board or committee;
                (2)   Officer;
           c.   A copy of the form of any contract made or arrangement to be made between the
                applicant and any individual listed in subdivision b;
           d.   All marketing materials to be used in connection with marketing a discount plan in
               this state;
          e.   A description of member complaint procedures to be established and maintained
               by the applicant;
          f.   A copy of the applicant's cancellation and refund policy;
          g.   The name and address of the applicant's agent for service of process, notice, or
               demand, or if not domiciled in this state, a duly executed instrument appointing
               the commissioner and the commissioner's successors, the applicant's attorney
               upon whom all process in any action or proceeding against the applicant may be
               served; and
          h.   Any other information the commissioner may reasonably require.
     4.   The department may request a copy of the form of all contracts to be made or sold in
          this state or to be made between the applicant and any providers or provider networks
          regarding provision of medical or ancillary services to members.
     5.   The department may request a copy of the form of any contract between the applicant
          and any person or other entity for the performance on the applicant's behalf of any
          function, including marketing, administration, enrollment, investment management,
          and contracting for the provision of medical or ancillary services to cardholders.
     6.   After the receipt of an application filed pursuant to this section, the commissioner shall
          review the application and notify the applicant of any deficiencies in the application.
     7.   After receipt of a completed application, the commissioner shall:
          a.   Register the applicant as a discount plan if the commissioner is satisfied the
               applicant has met the following:
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                (1)   The requirements of this section; and
                (2)   The ownership, control, and management of the applicant are competent
                      and trustworthy and possess managerial experience that would make the
                      proposed operation of the discount plan organization beneficial to discount
                      plan members; or
           b.    Deny the registration application and state the grounds for denial.
      8.   Registration is effective for one year, unless before expiration the registration is
           renewed in accordance with this subsection or suspended or revoked in accordance
           with section 26.1-53.1-12.
     9.   Not later than March first of each year, the discount plan organization shall submit:
          a.    Updated information to anything provided pursuant to subsections 3, 4, and 5
                and section 26.1-53.1-23; and
          b.    The renewal fee of two hundred fifty dollars.
    10.   The commissioner shall renew the registration of each discount plan organization that
          meets the requirements of this chapter and pays the appropriate renewal fee.
     26.1-53.1-04. Exception to registration for providers giving discounts to own patients.
     A provider that provides discounts to the provider's own patients, without any cost or fee of
 any kind to the patient, is not required to obtain and maintain registration under this chapter as
 a discount plan organization.
     26.1-53.1-05. Surety bond.
     Each registered discount plan organization shall maintain in force a surety bond in the
 organization's own name in an amount not less than thirty-five thousand dollars to be used in
 the discretion of the commissioner to protect the financial interest of members. The bond must
 be issued by an insurance company licensed to do business in this state. Initially, a copy of the
 bond or a statement identifying the depository, trustee, and account number of the surety
 account, and for renewal proof of annual renewal of the bond or maintenance of the surety
 account, must be filed with the commissioner.
     26.1-53.1-06. Surety bonds not subject to levy by claimants.
     Except for the commissioner, the assets or securities held in this state as a deposit
 pursuant to section 26.1-53.1-05 are not subject to levy by a judgment creditor or other claimant
 of the discount plan organization.
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      26.1-53.1-07. Internet website to be established.
      Before registration by the commissioner, each discount plan organization shall establish an
  internet website. The internet website must have an up-to-date list of names and addresses of
  the providers with which the organization has contracted directly or through a provider network.
  The internet website address must be displayed prominently on all of the discount plan
  organization's advertisements, marketing materials, brochures, and discount plan cards.
      26.1-53.1-08. Investigation by commissioner.
      Within a reasonable time after receipt of a properly completed application for registration
  under this chapter, the commissioner may conduct investigations and propound interrogatories
 concerning the applicant's qualifications, residence, business affiliations, and any other matter
 the commissioner believes necessary or advisable to determine compliance with this chapter or
 for the protection of the public.
     26.1-53.1-09. Reporting of actions.
     A discount plan organization shall report to the commissioner any administrative action
 taken against the organization in another jurisdiction or by another governmental agency in this
 state within thirty days of the final disposition of the matter. This report must include a copy of
 the order, consent to order, or other relevant legal documents.
     26.1-53.1-10. Nonrenewal, suspension, or revocation.
     The commissioner may suspend the authority of a discount plan organization to enroll new
 members or refuse to renew, suspend, or revoke a discount plan organization's registration if,
 after notice to the registrant and hearing, the commissioner finds that any of the following
 conditions exist:
     1.    The discount plan organization is not operating in compliance with this chapter;
     2.    The discount plan organization has advertised, merchandised, or attempted to
           merchandise the organization's services in such a manner as to misrepresent the
           organization's services or capacity for service or has engaged in deceptive,
           misleading, or unfair practices with respect to advertising or merchandising;
     3.    The discount plan organization is not fulfilling the organization's obligations as a
           discount plan organization; or
     4.    The continued operation of the discount plan organization would be hazardous to the
           organization's members.
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      26.1-53.1-11. Winding up of affairs.
      If the registration of a discount plan organization is surren