Sec. E-1. 24 MRSA §2327, as amended by PL 2003, c. 428, Pt. E, §1, is further amended to read:
A group health care contract may not be issued by a nonprofit hospital or medical service organization in this State until a copy of the group rates to be used in calculating the premium for these contracts has been filed for informational purposes with the superintendent. The filing must include the base rates and a description of any procedures to be used to adjust the base rates to reflect factors including but not limited to age, gender, health status, claims experience, group size and coverage of dependents. Notwithstanding this section, rates for group Medicare supplement, nursing home care or long-term care contracts and for certain group contracts included within the definition of "individual health plan" in Title 24-A, section 2736-C, subsection 1, paragraph C must be filed in accordance with section 2321 and rates for small group health plans as defined by Title 24-A, section 2808-B must be filed in accordance with that section.
Sec. E-2. 24-A MRSA §423-D is enacted to read:
§423-D. Annual report supplement
1. Annual report supplement required. Each health insurer and health maintenance organization shall file an annual report supplement on or before March 1st of each year, or within any reasonable extension of time that the superintendent for good cause may have granted on or before March 1st. The superintendent shall adopt rules regarding specifications for the annual report supplement. The annual report supplements must provide the public with general, understandable and comparable financial information relative to the in-state operations and results of authorized insurers and health maintenance organizations. Such information must include, but is not limited to, medical claims expense, administrative expense and underwriting gain for each line segment of the market in this State in which the insurer participates. The annual report supplements must contain sufficient detail for the public to understand the components of cost incurred by authorized health insurers and health maintenance organizations as well as the annual cost trends of these carriers. The superintendent shall develop standardized definitions of each reported measure. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.
2. Exemption. If an insurer is engaged in the type of health insurance business identified as an exception to the definition of health insurance in section 704, subsection 2 and is not engaged in health insurance in this State as defined in that section, then the insurer is not subject to the requirements of this section for the filing of annual report supplements.
Sec. E-3. 24-A MRSA §1902, as enacted by PL 1989, c. 846, Pt. D, §2 and affected by Pt. E, §4, is amended to read:
A person may not act as or profess to be an administrator after August 1, 1990, unless licensed under this chapter. An administrator doing business in this State on August 1, 1990, shall apply for a license by November 1, 1990. In addition to any other penalty that may be imposed for violation of this Title, any person violating this section shall, upon conviction, be punished by a fine of not less than $100 nor more than $1,000 or by imprisonment for less than one year, or both.
An administrator licensed under this chapter on or before December 31, 2003 shall submit information by March 21, 2004 as to the types of business conducted by that administrator in this State on a form prescribed by the superintendent.
Sec. E-4. 24-A MRSA §1903, sub-§§1 and 2, as enacted by PL 1989, c. 846, Pt. D, §2 and affected by Pt. E, §4, are amended to read:
1. The names, addresses and official positions of the individuals who are responsible for the conduct of the affairs of the administrator, including, but not limited to, all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the principal officers in the case of a corporation or the partners in the case of a partnership; and
2. An application fee, as specified in section 601, that the superintendent shall apply toward the initial administrator annual fee if an administrator's license is granted to the applicant. ; and
Sec. E-5. 24-A MRSA §1903, sub-§3 is enacted to read:
3. The specific type of business in which the 3rd-party administrator will or intends to engage.
Sec. E-6. 24-A MRSA §1905, sub-§2, as enacted by PL 1989, c. 846, Pt. D, §2 and affected by Pt. E, §4, is amended to read:
2. If the superintendent finds that the applicant is qualified for an administrator license, the superintendent shall promptly issue the license, which identifies the types of business in which the applicant may engage; otherwise the superintendent shall refuse to issue the license and promptly notify the applicant.
Sec. E-7. 24-A MRSA §1905, sub-§5 is enacted to read:
5. An administrator shall submit an application to amend its license if the administrator desires to amend the types of business on its then-current license.
Sec. E-8. 24-A MRSA §1952, as amended by PL 2003, c. 428, Pt. H, §2, is further amended to read:
A private purchasing alliance may not market, sell, offer or arrange for a package of one or more health benefit plans underwritten by one or more carriers without first being licensed by the superintendent. The superintendent shall specify by rule standards and procedures for the issuance and renewal of licenses for private purchasing alliances. A rule may require an application fee of not more than $400 and an annual license fee of not more than $100. A license may not be issued until the rulemaking required by this chapter has been undertaken and all required rules are in effect. Dirigo Health, as established in chapter 87, is exempt from the licensure requirements of this section as an independent executive agency of the State.
Sec. E-9. 24-A MRSA §2736, sub-§3, ¶B, as enacted by PL 1997, c. 344, §8, is amended to read:
B. The insurer must demonstrate in accordance with generally accepted actuarial principles and practices consistently applied that, as of a date no more than 210 days prior to the filing, the ratios of benefits incurred to premiums earned for those products average no less than 80% for the previous 12-month period. For the purposes of this calculation, any savings offset payments paid pursuant to section 6913 must be treated as incurred claims.
Sec. E-10. 24-A MRSA §2736, sub-§4, ¶C, as enacted by PL 1997, c. 344, §8, is amended to read:
C. In any hearing conducted under this subsection, the Bureau of Insurance and any party asserting that the rates are excessive have the burden of establishing that the rates are excessive. The burden of proving that rates are adequate and, not unfairly discriminatory and in compliance with the requirements of section 6913 remains with the insurer.
Sec. E-11. 24-A MRSA §2736-A, as repealed and replaced by PL 1979, c. 558, §8, is amended to read:
If at any time the superintendent has reason to believe that a filing does not meet the requirements that rates shall not be excessive, inadequate or, unfairly discriminatory or not in compliance with section 6913 or that the filing violates any of the provisions of chapter 23, he the superintendent shall cause a hearing to be held.
Hearings held under this section shall must conform to the procedural requirements set forth in the Maine Administrative Procedure Act, Title 5, chapter 375, subchapter IV 4.
Sec. E-12. 24-A MRSA §2736-C, sub-§2, ¶F is enacted to read:
F. A carrier that adjusts its rate shall account for the savings offset payment or any recovery in that offset payment in its experience consistent with this section and section 6913.
Sec. E-13. 24-A MRSA §2736-C, sub-§5, as amended by PL 2003, c. 428, Pt. H, §3, is further amended to read:
5. Loss ratios. For all policies and certificates issued on or after the effective date of this section, the superintendent shall disapprove any premium rates filed by any carrier, whether initial or revised, for an individual health policy unless it is anticipated that the aggregate benefits estimated to be paid under all the individual health policies maintained in force by the carrier for the period for which coverage is to be provided will return to policyholders at least 65% of the aggregate premiums collected for those policies, as determined in accordance with accepted actuarial principles and practices and on the basis of incurred claims experience and earned premiums. For the purposes of this calculation, any savings offset payments paid pursuant to section 6913 must be treated as incurred claims.
Sec. E-14. 24-A MRSA §2808-B, sub-§2, ¶A, as amended by PL 2003, c. 313, §1, is repealed.
Sec. E-15. 24-A MRSA §2808-B, sub-§2, ¶G, as enacted by PL 2003, c. 313, §2, is repealed.
Sec. E-16. 24-A MRSA §2808-B, sub-§§2-A to 2-C are enacted to read:
2-A. Rate filings. A carrier offering small group health plans shall file with the superintendent the community rates for each plan and every rate, rating formula and classification of risks and every modification of any formula or classification that it proposes to use.
A. Every filing must state the effective date of the filing. Every filing must be made not less than 60 days in advance of the stated effective date, unless the 60-day requirement is waived by the superintendent. The effective date may be suspended by the superintendent for a period of time not to exceed 30 days. In the case of a filing that meets the criteria in subsection 2-B, paragraph E, the superintendent may suspend the effective date for a longer period not to exceed 30 days from the date the carrier satisfactorily responds to any reasonable discovery requests.
B. A filing and supporting information are public records except as provided by Title 1, section 402, subsection 3 and become part of the official record of any hearing held pursuant to subsection 2-B, paragraphs B or F.
C. Rates for small group health plans must be filed in accordance with this section and subsections 2-B and 2-C for premium rates effective on or after July 1, 2004, except that the filing of rates for small group health plans are not required to account for any savings offset payment or any recovery of that offset payment pursuant to subsection 2-B, paragraph D and section 6913 for rates effective before July 1, 2005.
2-B. Rate review and hearings. Except as provided in subsection 2-C, rate filings are subject to this subsection.
A. The superintendent shall disapprove any premium rates filed by any carrier, whether initial or revised, for a small group health plan unless it is anticipated that the aggregate benefits estimated to be paid under all the small group health plans maintained in force by the carrier for the period for which coverage is to be provided will return to policyholders at least 75% of the aggregate premiums collected for those policies, as determined in accordance with accepted actuarial principles and practices and on the basis of incurred claims experience and earned premiums. For the purposes of this calculation, any savings offset payments paid pursuant to section 6913 must be treated as incurred claims.
B. If at any time the superintendent has reason to believe that a filing does not meet the requirements that rates not be excessive, inadequate or unfairly discriminatory or that the filing violates any of the provisions of chapter 23, the superintendent shall cause a hearing to be held. Hearings held under this subsection must conform to the procedural requirements set forth in Title 5, chapter 375, subchapter 4. The superintendent shall issue an order or decision within 30 days after the close of the hearing or of any rehearing or reargument or within such other period as the superintendent for good cause may require, but not to exceed an additional 30 days. In the order or decision, the superintendent shall either approve or disapprove the rate filing. If the superintendent disapproves the rate filing, the superintendent shall establish the date on which the filing is no longer effective, specify the filing the superintendent would approve and authorize the insurer to submit a new filing in accordance with the terms of the order or decision.
C. When a filing is not accompanied by the information upon which the carrier supports the filing or the superintendent does not have sufficient information to determine whether the filing meets the requirements that rates not be excessive, inadequate, unfairly discriminatory or not in compliance with section 6913, the superintendent shall require the carrier to furnish the information upon which it supports the filing.
D. A carrier that adjusts its rate shall account for the savings offset payment or any recovery of that savings offset payment in its experience consistent with this section and section 6913.
E. Any filing of rates, rating formulas and modifications that satisfies the criteria set forth in this paragraph is subject to the provisions of paragraph F:
(1) The proposed rate for any group or subgroup does not include a unit cost change that exceeds the index of inflation multiplied by 1.5, excluding any approved rate differential based on age. For the purposes of this subparagraph, "index of inflation" means the rate of increase in medical costs for a section of the United States selected by the superintendent that includes this State for the most recent 12-month period immediately preceding the date of the filing for which data are available; and
(2) The carrier demonstrates in accordance with generally accepted actuarial principles and practices consistently applied that, as of a date no more than 210 days prior to the filing, the ratio of benefits incurred to premiums earned averages no less than 78% for the previous 36-month period.
F. Any rate hearing conducted with respect to filings that meet the criteria in paragraph E is subject to this paragraph.
(1) A person requesting a hearing shall provide the superintendent with a written statement detailing the circumstances that justify a hearing, notwithstanding the satisfaction of the criteria in paragraph E.
(2) If the superintendent decides to hold a hearing, the superintendent shall issue a written statement detailing the circum-stances that justify a hearing, notwithstanding the satisfaction of the criteria in paragraph E.
(3) In any hearing conducted under this paragraph, the bureau and any party asserting that the rates are excessive have the burden of establishing that the rates are excessive. The burden of proving that rates are adequate, not unfairly discriminatory and in compliance with the requirements of section 6913 remains with the carrier.
2-C. Optional guaranteed loss ratio. Notwithstanding subsection 2-B, at the carrier's option, rate filings for a credible block of small group health plans may be filed in accordance with this subsection instead of subsection 2-B. Rates filed in accordance with this subsection are filed for informational purposes.
A. A block of small group health plans is considered credible if the anticipated number of member months for which the rates will be in effect is at least 1,000 or if it meets credibility standards adopted by the superintendent by rule. The rate filing must state the anticipated number of member months for which the rates will be in effect and the basis for the estimate. If the superintendent determines that the number of member months is likely to be less than 1,000 and the block does not satisfy any alternative credibility standards adopted by rule, the filing is subject to subsection 2-B.
B. On an annual schedule as determined by the superintendent, the carrier shall file a report with the superintendent showing aggregate earned premiums and incurred claims for the period the rates were in effect. Incurred claims must include claims paid to a date 6 months after the end of the annual reporting period determined by the superintendent and an estimate of unpaid claims. The report must state how the unpaid claims estimate was determined.
C. If incurred claims were less than 78% of aggregate earned premiums over a continuous 36-month period, the carrier shall refund a percentage of the premium to the current in-force policyholder. For the purposes of calculating this loss-ratio percentage, any savings offset payments paid pursuant to section 6913 must be treated as incurred claims. The excess premium is the amount of premium above that amount necessary to achieve a 78% loss ratio for all of the carrier's small group policies during the same 36-month period. The refund must be distributed to policyholders in an amount reasonably calculated to correspond to the aggregate experience of all policyholders holding policies having similar benefits. The total of all refunds must equal the excess premiums.
(1) For determination of loss-ratio percentages in 2005, actual aggregate incurred claims expenses include expenses incurred in 2005 and projected expenses for 2006 and 2007. For determination of loss-ratio percentages in 2006, actual incurred claims expenses include expenses in 2005 and 2006 and projected expenses for 2007.
(2) The superintendent may waive the requirement for refunds during the first 3 years after the effective date of this subsection.
D. The superintendent may require further support for the unpaid claims estimate and may require refunds to be recalculated if the estimate is found to be unreasonably large.
E. The superintendent may adopt rules setting forth appropriate methodologies regarding reports, refunds and credibility standards pursuant to this subsection. Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.
Sec. E-17. 24-A MRSA §2839-B is enacted to read:
1. Application. This section applies to group health insurance offered in the large group market as defined in section 2850-B, except insurance covering only accidental injury, specified disease, hospital indemnity, dental, vision, disability income, long-term care, Medicare supplement or other limited benefit health insurance.
2. Annual filing. Every carrier offering group health insurance specified in subsection 1 shall annually file with the superintendent on or before April 30th a certification signed by a member in good standing of the American Academy of Actuaries or a successor organization that the carrier's rating methods and practices are in accordance with generally accepted actuarial principles and with the applicable actuarial standards of practice as promulgated by an actuarial standards board. The filing must also certify that the carrier has included in its experience any savings offset payments or recovery of those savings offset payments consistent with section 6913. The filing also must state the number of policyholders, certificate holders and dependents, as of the close of the preceding calendar year, enrolled in large group health insurance plans offered by the carrier. A filing and supporting information are public records except as provided by Title 1, section 402, subsection 3.
3. Documentation. Every carrier shall maintain at its principal place of business a complete and detailed description of its rating practices, including information and documentation that demonstrates that its rating methods and practices are in accordance with generally accepted actuarial principles and with the applicable actuarial standards of practice as promulgated by an actuarial standards board.
Sec. E-18. 24-A MRSA §4203, sub-§3, ¶S, as amended by PL 1997, c. 370, Pt. F, §1, is further amended to read:
S. A list of the names and addresses of all physicians and facilities with which the health maintenance organization has or will have agreements. If products are offered that pay full benefits only when providers within a subset of the contracted physicians or facilities are utilized, a list of the providers in that limited network must be included, as well as a list of the geographic areas where the products are offered. This paragraph may not be construed to prohibit a health maintenance organization from offering a health plan that includes financial provisions designed to encourage members to use designated providers in a network in accordance with section 4303, subsection 1, paragraph A.
Sec. E-19. 24-A MRSA §4207, sub-§5, as repealed and replaced by PL 1993, c. 645, Pt. A, §6, is amended to read:
5. A schedule or an amendment to a schedule of charge for enrollee health coverage for health care services may not be used by any health maintenance organization unless it complies with section 2736, 2808-B or 2839, whichever is applicable.
Sec. E-20. 24-A MRSA §4303, sub-§1, as amended by PL 1999, c. 742, §6, is further amended to read:
1. Demonstration of adequate access to providers. A Except as provided in paragraph A, a carrier offering a managed care plan shall provide to its members reasonable access to health care services in accordance with standards developed by rule by the superintendent. These standards must consider the geographical and transportational problems in rural areas. All managed care plans covering residents of this State must provide reasonable access to providers consistent with the access-to-services requirements of any applicable bureau rule.
A. Upon approval of the superintendent, a carrier may offer a health plan that includes financial provisions designed to encourage members to use designated providers in a network if:
(1) The entire network meets overall access standards pursuant to Bureau of Insurance Rule Chapter 850;
(2) The health plan is consistent with product design guidelines for Bureau of Insurance Rule Chapter 750;
(3) The health plan does not include financial provisions designed to encourage members to use designated providers of primary, preventive, maternity, obstetrical, ancillary or emergency care services, as defined in Bureau of Insurance Rule Chapter 850;
(4) The financial provisions may apply to all of the enrollees covered under the carrier's health plan;
(5) The carrier establishes to the satisfaction of the superintendent that the financial provisions permit the provision of better quality services and the quality improvements either significantly outweigh any detrimental impact to covered persons forced to travel longer distances to access services, or the carrier has taken steps to effectively mitigate any detrimental impact associated with requiring covered persons to travel longer distances to access services. The superintendent may consult with other state entities, including the Department of Human Services, Bureau of Health and the Maine Quality Forum established in section 6951, to determine whether the carrier has met the requirements of this subparagraph. The superintendent shall provisionally adopt rules by January 1, 2004 regarding the criteria used by the superintendent to determine whether the carrier meets the quality requirements of this subparagraph and present those rules for legislative review during the Second Regular Session of the 121st Legislature; and
(6) The financial provisions may not permit travel at a distance that exceeds the standards established in Bureau of Insurance Rule Chapter 850 for mileage and travel time by 100%.
This paragraph takes effect January 1, 2004 and is repealed July 1, 2007.
Sec. E-21. Report by Superintendent of Insurance. The Superintendent of Insurance shall submit a report no later than January 1, 2007 to the joint standing committee of the Legislature having jurisdiction over insurance and financial services matters on any decisions by the superintendent to allow health insurance carriers to offer health plans in accordance with the Maine Revised Statutes, Title 24-A, section 4303, subsection 1, paragraph A. The report must include information on the number of enrollees covered under these plans, the financial provisions used in the plans and the designated providers that enrollees are encouraged to use under the plans, including their locations. The joint standing committee of the Legislature having jurisdiction over insurance and financial services matters may report out legislation to the First Regular Session of the 123rd Legislature to remove the repeal date of Title 24-A, section 4303, subsection 1, paragraph A.
Sec. E-22. Report on medical malpractice awards. The Superintendent of Insurance shall submit a report, no later than January 1, 2005, to the joint standing committee of the Legislature having jurisdiction over insurance and financial services matters regarding medical malpractice lawsuits, damage awards for noneconomic damages in those lawsuits and the cost and availability of medical malpractice insurance in this State. As part of its review, the superintendent shall consult with representatives of the medical community, legal community and medical malpractice insurance industry regarding these issues. At a minimum, the report must address the impact on the cost of malpractice insurance of a cap on noneconomic damages of $250,000 in malpractice lawsuits. The joint standing committee of the Legislature having jurisdiction over insurance and financial services matters may report out legislation to the First Regular Session of the 122nd Legislature in response to the report.
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