Administrative Rules of the State of Montana

BEFORE THE COMMISSIONER OF SECURITIES AND INSURANCE

MONTANA STATE AUDITOR

In the matter of the adoption of NEW RULES I through VII pertaining to network adequacy

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NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION

TO: All Concerned Persons

1. On January 15, 2015, at 10:00 a.m., the Commissioner of Securities and Insurance, Montana State Auditor, will hold a public hearing in the 2nd floor conference room, at the Office of the Commissioner of Securities and Insurance, Montana State Auditor (CSI), 840 Helena Ave., Helena, Montana, to consider the proposed adoption of the above-stated rules.

2. The CSI will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing, or need an alternative accessible format of this notice. If you require an accommodation, contact the CSI no later than 5:00 p.m., January 8, 2015, to advise us of the nature of the accommodation that you need. Please contact Darla Sautter, CSI, 840 Helena Avenue, Helena, Montana, 59601; telephone (406) 444-2726; TDD (406) 444-3246; fax (406) 444-3499; or e-mail dsautter@mt.gov.

3. The rules as proposed to be adopted provide as follows:

NEW RULE I APPLICABILITY AND IDENTIFICATION OF DIFFERENT LEVELS OF ADEQUACY (1) A health care insurer who issues disability benefits and meets the requirements of 33-22-1706(4)(c), MCA, is deemed to have an adequate network, for that category of health care providers, provided that the insurer submits the information and follows the requirements set forth in this chapter.

(2) If the commissioner determines an insurer's network to be "not adequate," the cost sharing may be adjusted to no greater than a 25% payment differential.

(a) The commissioner shall determine whether the payment difference between in and out of network is 25% or less, according to a formula prescribed by the commissioner.

(b) Even if the commissioner determines that the insurer utilizes an acceptable payment differential under (2), that insurer shall submit the information and follow the requirements set forth in this chapter.

(3) If the commissioner determines that the network is so inadequate that representing it to the public as a network constitutes a misrepresentation under 33-1-502, MCA, the insurer may not issue a network plan under this chapter.

AUTH: 33-22-1707, MCA

IMP: 33-22-1706, MCA

NEW RULE II NETWORK ADEQUACY (1) The commissioner may determine that an insurer has an adequate network, even if the network does not meet all of the percentages for various types of providers or facilities specified in 33-22-1706(4)(c), MCA.

(2) As used in 33-22-1706(4)(c), MCA, and this chapter, the terms "physician" and "provider" include a specialty health care provider that delivers necessary medical services.

(3) For the purposes of determining network adequacy when the total percentage of any type of provider or facility is less than the minimum adequacy percentage set forth in 33-22-1706(4)(c), MCA, the commissioner shall review the insurer's network to determine if it is sufficient in numbers and types of providers and facilities to assure that all covered health plan services to covered persons are accessible without unreasonable delay, within a reasonable proximity, and with sufficient provider choice, based on the availability of those types of providers and facilities.

(4) All insurers' networks must ensure that each covered person shall have adequate choice of each type of provider and facility, including but not limited to the following types:

(a) physicians;

(b) mental health and chemical dependency treatment providers;

(d) hospitals;

(e) surgi-centers; and

(f) residential treatment centers.

(5) Sufficiency and adequacy of choice for each type of provider or facility must be demonstrated to the commissioner by reasonable criteria. "Reasonable criteria" may include provider to covered person ratios by specialty, primary care provider to covered person ratios, geographic accessibility, waiting times for appointments with participating providers, and the volume of specialty services available to serve the needs of covered persons requiring specialty care.

(6) If the insurer has an absence or insufficient number or type of participating providers or facilities qualified to provide necessary specialty care for a particular covered health care service within a reasonable proximity, regardless of whether adequacy was determined by a threshold percentage or other criteria listed in (3), the insurer shall ensure that the covered person obtains the covered service from a qualified provider or facility within reasonable proximity of the covered person at no greater level of cost-sharing to the covered person than if the service were obtained from an in-network provider or facility. The requirements of this section apply only if:

(a) the care the covered person is seeking is medically necessary; and

(b) the insurer:

(i) does not have a participating provider with the training and certification required to provide the necessary health care services, including access to specialty pediatric services, within a reasonable proximity; or

(ii) cannot provide reasonable access to a participating provider with the necessary expertise without unreasonable delay.

(7) The commissioner shall determine what constitutes reasonable proximity and appropriate access according to the availability of providers with the necessary expertise in that area.

(8) When providing access to a nonparticipating provider or facility pursuant to (5), an insurer is not responsible for amounts that the nonparticipating provider may charge to the patient for a service that is above the reasonable "allowable charge," as determined under 33-15-308, MCA.

(9) An insurer shall establish and maintain adequate arrangements to ensure reasonable proximity of network providers and facilities to the business or personal residence of covered persons.

(a) An insurer shall include providers and facilities in networks in a manner that limits the amount of travel required to obtain covered benefits, based on the relative availability of providers and the geographic barriers existing in that particular area; and

(b) Relative availability includes the willingness of providers or facilities in the service area to contract with the insurer under reasonable terms and conditions.

(10) An insurer shall monitor, on an ongoing basis, the ability and capacity of its network providers and facilities to furnish health plan services to covered persons.

(11) A contract between a preferred provider and an insurer must require a preferred provider who is compensated by the insurer on a discounted fee basis to accept the rate that is negotiated with the insurer as payment in full, and the participating provider may not bill the patient for charges above that amount for medically necessary covered services.

(12) This rule does not prohibit an insurer from using restricted networks, as long as that insurer otherwise meets the network adequacy requirements set forth in these rules. This rule does not prohibit an insurer from placing reasonable requirements on providers with whom it contracts.

AUTH: 33-22-1707, MCA

IMP: 33-22-1706, MCA

NEW RULE III FILING PROVIDER LISTS (1) An insurer shall, no later than May 1 of each year, file an electronic report of all participating providers in that insurer's network on a form and in a manner prescribed by the commissioner. If the insurer maintains health plans with different network access, the insurer must file a separate report for each network.

(2) An insurer shall file an updated report if:

(a) provider numbers decrease by five percent or more;

(b) a hospital, surgi-center, or other inpatient facility, with more than five beds, terminates its provider contract with that insurer; or

(3) The commissioner may conduct an audit of an insurer's provider network.

AUTH: 33-22-1707, MCA

IMP: 33-22-1706, MCA

NEW RULE IV CHOICE OF PRIMARY CARE PHYSICIAN (1) If an insurer requires a covered person to choose a primary care provider and ties claims payment to that choice or requires a primary care provider referral before seeking specialty provider services, that insurer shall provide the covered person with the following:

(a) a list of participating primary care providers who are accepting new patients and who are located within a reasonable proximity of the home or business of the covered person. Covered persons must be permitted to change primary care providers at any time with the change becoming effective no later than 30 days following the covered person's request for the change; and

(b) a process whereby a covered person with a complex or serious medical or psychiatric condition may receive a standing referral to a participating specialist for an extended period of time. The standing referral must be consistent with the covered person's medical needs and the plan's benefits. A referral does not preclude the insurer from performing medical necessity reviews.

AUTH: 33-22-1707, MCA

IMP: 33-22-1706, MCA

NEW RULE V REQUIRED DISCLOSURES REGARDING NETWORK ADEQUACY (1) Each insurer shall have a preferred provider directory on its web site and available in hard copy, if requested. The provider directory must be searchable by specialty, including primary provider designation, county and city or town. The directory must include facilities and must be updated monthly to reflect whether or not the provider is accepting new patients, if that information is available, and any additions or subtractions to the provider list. There must be a separate and clearly designated directory for each health plan type, if more than one network is offered by that insurer.

(2) The outline of coverage, which is delivered at the point of sale, must contain a prominent disclosure concerning reimbursement of nonpreferred, out-of-network providers, including the following information:

(a) a disclosure concerning how the allowable charge is determined;

(b) a statement that the insurer's reimbursement for out-of-network claims may be less than the full billed charges;

(d) the amount by which the covered person's cost sharing, including deductibles, coinsurance and copayments, will be increased for out-of-network services; and

(e) disclosure of all continuity of care provisions applicable to the policy.

(3) If a new outline of coverage is not delivered at the time of renewal, the insurer shall deliver the information in (2) at renewal in a separate notice.

(4) An insurer shall also include the following information displayed in a prominent manner, in the outline of coverage and, as applicable, in the separate notice required in (3):

(a) a description of the process required in [New Rule II] regarding how patients are provided access to and compensated for medically necessary care if there are no participating providers with the necessary expertise within a reasonable proximity who are able to provide the health care service without unreasonable delay;

(b) a statement advising that out-of-network emergency room services to treat an emergency medical condition are reimbursed as if obtained in network, if an in-network emergency room is not reasonably available. That disclosure must include the definition of emergency medical condition provided in applicable federal law; and

(5) If an insurer has limitations or restrictions on access to participating providers and facilities based on required authorizations or referrals, the insurer shall prominently disclose the limitations or restrictions in the outline of coverage, the supplemental notice described in (3), and in the front of the policy, certificate, or member contract itself, along with detailed instructions regarding how to obtain the service.

(6) A provider or insurer shall provide a 60-day notice to the other party prior to terminating a provider contract.

(a) An insurer shall ensure that covered persons are notified at least 30 days before a provider contract termination is effective, or as soon as possible after the insurer learns of the termination, by a notice delivered electronically or by mail to, at a minimum:

(i) all covered persons who are identified as having obtained services from the provider within the last two years; and

(ii) in the case of a facility, all covered persons who live in the area that the facility serves.

(b) An insurer shall also use the following notification methods:

(i) a prompt correction of the provider directory; and

(ii) a request to the provider, asking that a notice be posted in the provider office or facility that notifies patients of the termination.

(7) The notice in (6)(a) must disclose any applicable continuity of coverage provisions contained in the policy or outline of coverage. This notice must include a list of available preferred providers in the same geographic area who are the same provider type.

AUTH: 33-22-1707, MCA

IMP: 33-22-1706, MCA

NEW RULE VI GEOGRAPHIC SERVICES AREAS (1) An insurer may offer health plans with a limited geographic area only to residents of that area, as long as the insurer meets the network adequacy requirements set forth in these rules and provides the commissioner with the following information:

(a) a description of the geographic area; and

(b) the rationale for limiting the sales of that product to that area.

(2) All insurers who are licensed as a health service corporation and all insurers who are qualified health plan issuers in the federally facilitated exchange must offer a health plan in all parts of the state.

AUTH: 33-33-1707, MCA

IMP: 33-22-1706, MCA

NEW RULE VII CONTINUITY OF CARE (1) When an insured's provider is dropped for any reason from the network, an insurer shall establish reasonable procedures to transition the insured to a preferred provider in a manner that ensures continuity of care.

(2) If the treating provider identifies a special circumstance, the treating provider shall:

(a) request that the insured be permitted to continue treatment under the provider's care;

(b) agree to accept the same reimbursement from the insurer for that patient as provided for under that insurer's provider contract; and

(c) agree not to seek payment from the insured of any amount for which the insured would not be responsible if the provider were still a preferred provider.

(3) As used in this rule, "special circumstance" means a condition which a provider reasonably believes could cause harm to an insured if care by the treating provider is suddenly discontinued, such as pregnancy or an ongoing course of treatment for an episode of cancer or other acute condition:

(a) In a case involving a special circumstance, an insurer must ensure continuity of care until the later of the following:

(i) the ongoing course of treatment is completed; or

(ii) through the postpartum period for a covered person in her second or third trimester of pregnancy.

(b) Except in the case of pregnancy, a special circumstance may not last longer than the next renewal date for that policy without insurer consent; and

(4) An insurer shall agree to extend its obligation to reimburse the treating provider for ongoing treatment at the in-network rate if:

(a) the insurer agrees that a condition for which ongoing treatment is being provided is a special circumstance; and

(b) the contract termination was not "for cause."

(5) If the insurer does not agree to extend ongoing treatment at the in-network rate, the insured may appeal that decision under the appeal rights outlined in the insurance contract. An expedited appeal process must be available.

AUTH: 33-22-1707, MCA

IMP: 33-22-1706, MCA

4. STATEMENT OF REASONABLE NECESSITY: The Commissioner of Securities and Insurance, Montana State Auditor, Monica J. Lindeen, (commissioner) is the statewide elected official responsible for administering the Montana Insurance Code and regulating the business of insurance.

NEW RULE I is proposed to be adopted in order to clarify the treatment of health plans that have different levels of network adequacy as identified in 33-22-1706, MCA. Specifically, the rule identifies the circumstances under which the 25 percent payment differential restriction contained in 33-22-1706(40(b), MCA, applies. The rule also prohibits an insurer from representing a significantly inadequate network to the public as a "network." These provisions are necessary to protect consumers from unreasonable payment differentials associated with an inadequate network, and from enrolling in plans expecting the benefits of network participation when in reality the plan's network is thoroughly substandard or nonexistent.

NEW RULE II is proposed to be adopted in order to specify what access standards the commissioner will consider when a network is below the threshold percentage that prompts "deemed adequate" under the applicable statute. In addition, this rule provides for a process for a consumer to seek necessary health care services from an out-of-network specialist if an "in-network" specialist is not available within a reasonable proximity. This ensures reasonable access to necessary health care services. For instance, even if an insurer has 80% or more of the physicians in the state, it may have no anesthesiologists, oncologists, or cardiologists in a given area. In that case, there would be a process to protect consumers from out-of-network cost sharing that is up to four times higher than in-network cost sharing. This rule expressly reserves the right of insurers to offer health insurance products to consumers that have restricted networks. This is necessary because insurers must have ways to lower medical costs so that lower premiums may be offered.

NEW RULE III is proposed to be adopted in order to provide instructions to insurers regarding how and when provider lists must be submitted to the commissioner's office so that percentages can be determined pursuant to 33-22-1706 (4), MCA, as well as providing the ability to audit and ensure the accuracy of the lists provided.

NEW RULE IV is proposed to be adopted to protect consumers who purchase a network health plan that requires covered persons to designate a primary care physician and whose claims payment hinges on first getting a referral from a primary care physician before seeking services from a specialist physician. Under those circumstances, those consumers should have the freedom to change their primary care physician once every 30 days so that freedom of choice of physician is not unduly restricted.

NEW RULE V is proposed to be adopted in order to provide consumers with accurate and comprehensive disclosures about the provider networks for the plans offered for sale. Many consumers need access to specific doctors or specific types of health care providers. Because out-of-network cost sharing is often four times higher than in-network cost sharing, consumers must shop carefully. If provider directories are not accurate and up to date, informed purchases become impossible; consumers are faced with very large medical bills; and insurers run the risk of an allegation of misrepresentation under the Unfair Trade Practices Act, Title 33, chapter 18, MCA. In addition, disclosures must prominently state how to seek treatment from participating providers, how to obtain necessary medical services when no in-network provider is available, and the financial consequences of accepting services from an out-of-network provider, such as balance-billing and four times higher deductibles and coinsurance. This rule also requires disclosures to the consumer regarding restrictions on access to participating providers such as prior authorization or referrals. In order to limit changes in the network without proper notification to insureds, providers and insurers are required to provide 60 days' notice of their intent to terminate a provider contract. Insurers are required to give affected consumers at least 30 days' notice of changes in the provider network in order to allow time to make necessary arrangements for medical care.

NEW RULE VI is proposed to be adopted in order to clarify that these rules do not prohibit insurers from offering an insurance product with a network that is limited to certain geographic areas only. However, in order to protect Montanans who live in remote parts of this state and in keeping with the intent of the legislature in adopting amendments to 33-22-1706, MCA, this rule also provides that most major medical health insurers shall also offer health insurance products that cover all parts of the state. This rule also requires insurers to fully disclose geographic restrictions on narrower networks.

NEW RULE VII is proposed to be adopted in order to ensure that when a patient is in active treatment, such as pregnancy or ongoing cancer treatment, there is a mechanism to continue that treatment under the terms of the original provider contract, even after the provider has otherwise terminated the relationship with the insurer. This continuity of care option must be initiated by the health care provider and accepted by the insurer and the patient. This is a process that is already contained in most provider contracts and is required by national health plan accrediting agencies. The rule is necessary to protect consumers from mid-policy year terminations of provider contracts and also to ensure that consumers in Montana are protected in a uniform manner and not subject to harm from contracts that they are not a party to.

5. Concerned persons may submit their data, views, or arguments concerning the proposed actions either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to Christina Goe, General Counsel, Office of the Commissioner of Securities and Insurance, Montana State Auditor, 840 Helena Ave., Helena, Montana, 59601; telephone (406) 444-2040; fax (406) 444-3499; or e-mail cgoe@mt.gov, and must be received no later than 5:00 p.m., January 23, 2015.

6. Christina Goe, General Counsel, has been designated to preside over and conduct this hearing.

7. The CSI maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Such written request may be mailed or delivered to Darla Sautter, Office of the Commissioner of Securities and Insurance, Montana State Auditor, 840 Helena Ave., Helena, Montana, 59601; telephone (406) 444-2726; fax (406) 444-3499; or e-mail dsautter@mt.gov, or may be made by completing a request form at any rules hearing held by the CSI.

8. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register. The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods due to system maintenance or technical problems.

9. Pursuant to 2-4-302, MCA, the bill sponsor contact requirement does apply. Representative Scott Reichner, sponsor of HB 544, was contacted directly by phone on or about September 3, 2014, and a copy of these proposed rules were sent to him directly by mail through the U.S. Postal Service on December 15, 2014.

10. The CSI has complied with the requirements of 2-4-111, MCA, and determined that these rules will not significantly and directly impact small businesses.

/s/ Nick Mazanec /s/ Christina L. Goe

Nick Mazanec Christina L. Goe

Rule Reviewer General Counsel

Certified to the Secretary of State December 15, 2014.