Session of 2000
By Committee on Appropriations

10             AN  ACT concerning insurance; relating to health maintenance organi-
11             zations; amending K.S.A. 1999 Supp. 40-3202 and repealing the exist-
12             ing section.
14       Be it enacted by the Legislature of the State of Kansas:
15             Section  1. K.S.A. 1999 Supp. 40-3202 is hereby amended to read as
16       follows: 40-3202. As used in this act:
17             (a) ``Commissioner'' means the commissioner of insurance of the
18       state of Kansas.
19             (b) ``Basic health care services'' means but is not limited to usual
20       physician, hospitalization, laboratory, x-ray, emergency and preventive
21       services and out-of-area coverage.
22             (c) ``Capitated basis'' means a fixed per member per month payment
23       or percentage of premium payment wherein the provider assumes risk
24       for the cost of contracted services without regard to the type, value or
25       frequency of services provided. For purposes of this definition, capitated
26       basis includes the cost associated with operating staff model facilities.
27             (d) ``Certificate of coverage'' means a statement of the essential fea-
28       tures and services of the health maintenance organization coverage which
29       is given to the subscriber by the health maintenance organization, med-
30       icare provider organization or by the group contract holder.
31             (e) ``Copayment'' means an amount an enrollee must pay in order to
32       receive a specific service which is not fully prepaid.
33             (f) ``Deductible'' means an amount an enrollee is responsible to pay
34       out-of-pocket before the health maintenance organization begins to pay
35       the costs associated with treatment.
36             (g) ``Director'' means the secretary of health and environment.
37             (h) ``Disability'' means an injury or illness that results in a substantial
38       physical or mental limitation in one or more major life activities such as
39       working or independent activities of daily living that a person was able to
40       do prior to the injury or illness.
41             (i) ``Enrollee'' means a person who has entered into a contractual
42       arrangement or on whose behalf a contractual arrangement has been
43       entered into with a health maintenance organization or the medicare pro-


  1       vider organization for health care services.
  2             (j) ``Grievance'' means a written complaint submitted in accordance
  3       with the formal grievance procedure by or on behalf of the enrollee re-
  4       garding any aspect of the health maintenance organization or the medi-
  5       care provider organization relative to the enrollee.
  6             (k) ``Group contract'' means a contract for health care services which
  7       by its terms limits eligibility to members of a specified group. The group
  8       contract may include coverage for dependents.
  9             (l) ``Group contract holder'' means the person to which a group con-
10       tract has been issued.
11             (m) ``Health care services'' means basic health care services and other
12       services, medical equipment and supplies which may include, but are not
13       limited to, medical, surgical and dental care; psychological, obstetrical,
14       osteopathic, optometric, optic, podiatric, nursing, occupational therapy
15       services, physical therapy services, chiropractic services and pharmaceu-
16       tical services; health education, preventive medical, rehabilitative and
17       home health services; inpatient and outpatient hospital services, extended
18       care, nursing home care, convalescent institutional care, laboratory and
19       ambulance services, appliances, drugs, medicines and supplies; and any
20       other care, service or treatment for the prevention, control or elimination
21       of disease, the correction of defects or the maintenance of the physical
22       or mental well-being of human beings.
23             (n) ``Health maintenance organization'' means an organization which:
24             (1) Provides or otherwise makes available to enrollees health care
25       services, including at a minimum those basic health care services which
26       are determined by the commissioner to be generally available on an in-
27       sured or prepaid basis in the geographic area served;
28             (2) is compensated, except for reasonable copayments, for the pro-
29       vision of basic health care services to enrollees solely on a predetermined
30       periodic rate basis;
31             (3) provides physician services directly through physicians who are
32       either employees or partners of such organization or under arrangements
33       with a physician or any group of physicians or under arrangements as an
34       independent contractor with a physician or any group of physicians;
35             (4) is responsible for the availability, accessibility and quality of the
36       health care services provided or made available. The term health main-
37       tenance organization also shall include the business entity known as ``the
38       consortium, inc.,'' and any successor entity.
39             (o) ``Individual contract'' means a contract for health care services
40       issued to and covering an individual. The individual contract may include
41       dependents of the subscriber.
42             (p) ``Individual practice association'' means a partnership, corpora-
43       tion, association or other legal entity which delivers or arranges for the


  1       delivery of basic health care services and which has entered into a services
  2       arrangement with persons who are licensed to practice medicine and
  3       surgery, dentistry, chiropractic, pharmacy, podiatry, optometry or any
  4       other health profession and a majority of whom are licensed to practice
  5       medicine and surgery. Such an arrangement shall provide:
  6             (1) That such persons shall provide their professional services in ac-
  7       cordance with a compensation arrangement established by the entity; and
  8             (2) to the extent feasible for the sharing by such persons of medical
  9       and other records, equipment, and professional, technical and adminis-
10       trative staff.
11             (q) ``Medical group'' or ``staff model'' means a partnership, associa-
12       tion or other group:
13             (1) Which is composed of health professionals licensed to practice
14       medicine and surgery and of such other licensed health professionals,
15       including but not limited to dentists, chiropractors, pharmacists, optom-
16       etrists and podiatrists as are necessary for the provision of health services
17       for which the group is responsible;
18             (2) a majority of the members of which are licensed to practice med-
19       icine and surgery; and
20             (3) the members of which: (A) As their principal professional activity
21       over 50% individually and as a group responsibility are engaged in the
22       coordinated practice of their profession for a health maintenance organ-
23       ization; (B) pool their income and distribute it among themselves accord-
24       ing to a prearranged salary or drawing account or other plan, or are sal-
25       aried employees of the health maintenance organization; (C) share
26       medical and other records and substantial portions of major equipment
27       and of professional, technical and administrative staff; and (D) establish
28       an arrangement whereby the enrollee's enrollment status is not known to
29       the member of the group who provides health services to the enrollee.
30             (r) ``Medicare provider organization'' means an organization which:
31             (1) Is a provider-sponsored organization as defined by Section 4001
32       of the Balanced Budget Act of 1997 (PL 105-33); and
33             (2) provides or otherwise makes available to enrollees basic health
34       care services pursuant to Section 4001 of the Balanced Budget Act of
35       1997 (PL 105-33).
36             (s) ``Net worth'' means the excess of assets over liabilities as deter-
37       mined by the commissioner from the latest annual report filed pursuant
38       to K.S.A. 40-3220 and amendments thereto.
39             (t) ``Person'' means any natural or artificial person including but not
40       limited to individuals, partnerships, associations, trusts or corporations.
41             (u) ``Physician'' means a person licensed to practice medicine and
42       surgery under the healing arts act.
43             (v) ``Provider'' means any physician, hospital or other person which


  1       is licensed or otherwise authorized in this state to furnish health care
  2       services.
  3             (w) ``Uncovered expenditures'' means the costs of health care services
  4       that are covered by a health maintenance organization for which an en-
  5       rollee would also be liable in the event of the organization's insolvency as
  6       determined by the commissioner from the latest annual statement filed
  7       pursuant to K.S.A. 40-3220 and amendments thereto. 
  8       Sec.  2. K.S.A. 1999 Supp. 40-3202 is hereby repealed.
  9        Sec.  3. This act shall take effect and be in force from and after its
10       publication in the statute book.