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1997 SESSION

978020146
HOUSE BILL NO. 2870
Offered January 20, 1997
A BILL to amend and reenact § 38.2-4312 of the Code of Virginia, relating to health maintenance organizations; continuing care facilities; prohibited practices.
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Patrons-- Cantor, Albo, Almand, Armstrong, Barlow, Bloxom, Bryant, Callahan, Crittenden, Croshaw, Crouch, Darner, Davies, Deeds, Diamonstein, Drake, Grayson, Hall, Hamilton, Hargrove, Hull, Johnson, Jones, D.C., Jones, J.C., Katzen, Keating, McDonnell, McEachin, Melvin, Moore, Moran, Morgan, Murphy, Phillips, Purkey, Reid, Robinson, Shuler, Wagner, Way and Woodrum; Senators: Benedetti, Couric, Edwards, Hawkins, Howell, Lucas, Martin, Marye, Maxwell, Miller, Y.B., Newman, Norment, Potts, Quayle, Reynolds, Saslaw, Schrock, Stolle, Ticer, Trumbo and Williams
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Referred to Committee on Corporations, Insurance and Banking
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Be it enacted by the General Assembly of Virginia:

1. That § 38.2-4312 of the Code of Virginia is amended and reenacted as follows:

§ 38.2-4312. Prohibited practices.

A. No health maintenance organization or its representative may cause or knowingly permit the use of (i) advertising that is untrue or misleading, (ii) solicitation that is untrue or misleading, or (iii) any form of evidence of coverage that is deceptive. For the purposes of this chapter:

1. A statement or item of information shall be deemed to be untrue if it does not conform to fact in any respect that is or may be significant to an enrollee or person considering enrollment in a health care plan;

2. A statement or item of information shall be deemed to be misleading, whether or not it may be literally untrue, if the statement or item of information may be understood by a reasonable person who has no special knowledge of health care coverage as indicating (i) a benefit or advantage if that benefit or advantage does not in fact exist or (ii) the absence of any exclusion, limitation or disadvantage of possible significance to an enrollee or person considering enrollment in a health care plan if the absence of that exclusion, limitation, or disadvantage does not in fact exist; consideration shall be given to the total context in which the statement is made or the item of information is communicated; and

3. An evidence of coverage shall be deemed to be deceptive if it causes a reasonable person who has no special knowledge of health care plans to expect benefits, services, charges, or other advantages that the evidence of coverage does not provide or that the health care plan issuing the evidence of coverage does not regularly make available for enrollees covered under the evidence of coverage; consideration shall be given to the evidence of coverage taken as a whole and to the typography, format, and language.

B. The provisions of Chapter 5 (§ 38.2-500 et seq.) of this title shall apply to health maintenance organizations, health care plans, and evidences of coverage except to the extent that the Commission determines that the nature of health maintenance organizations, health care plans, and evidences of coverage render any of the provisions clearly inappropriate.

C. No health maintenance organization may cancel or refuse to renew the coverage of an enrollee on the basis of the status of the enrollee's health.

D. No health maintenance organization, unless licensed as an insurer, may use in its name, contracts, or literature (i) any of the words "insurance," "casualty," "surety," "mutual," or (ii) any other words descriptive of the insurance, casualty, or surety business or deceptively similar to the name or description of any insurance or fidelity and surety insurer doing business in this Commonwealth.

E. No health maintenance organization shall discriminate on the basis of race, creed, color, sex or religion in the selection of health care providers for participation in the organization.

F. No health maintenance organization shall unreasonably discriminate against physicians as a class or any class of providers listed in § 38.2-4221 or pharmacists when contracting for specialty or referral practitioners or providers, provided the plan covers services which the members of such classes are licensed to render. Nothing contained in this section shall prevent a health maintenance organization from selecting, in the judgment of the health maintenance organization, the numbers of providers necessary to render the services offered by the health maintenance organization.

G. 1. No enrollee who is a resident of a continuing care facility and whose agreement with such facility provides for health care services shall be referred to any nursing home other than that within the continuing care facility (i) unless the enrollee's primary care physician determines that it is in the enrollee's best interests to do so or (ii) if the continuing care facility's nursing home agrees to accept reimbursement at the rate applicable to such coverage under the enrollee's plan.

2. For the purpose of this subsection, a "continuing care facility" is a facility subject to the provisions of Chapter 49 (§ 38.2-4900 et seq.) of this title.