S*0310(Rat #0529, Act #0441 of 1998)  General Bill, By 
Senate Banking and Insurance
 A BILL TO AMEND CHAPTER 71, TITLE 38, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY
 ADDING ARTICLE 17, SO AS TO ENACT THE SOUTH CAROLINA PATIENTS' INSURANCE AND
 BENEFITS PROTECTION ACT WHICH DEFINES CERTAIN HEALTH CARE PLANS AND OTHER
 TERMS, REQUIRES THE OFFER OF A POINT-OF SERVICE OPTION WHEN THE INSURED OR
 MEMBER IS EMPLOYED BY AN EMPLOYER THAT HAS MORE THAN FIFTY ELIGIBLE EMPLOYEES
 AND THAT OFFERS ONLY A CLOSED PANEL HEALTH CARE PLAN, PROVIDES FOR THE
 DIFFERENTIALS IN PREMIUMS, DEDUCTIBLES, COPAYMENTS, AND COINSURANCE, AND
 PROHIBITS DISCRIMINATION BY THE HEALTH PLANS AGAINST A PHYSICIAN, A
 PODIATRIST, AN OPTOMETRIST, AN ORAL SURGEON, A CHIROPRACTOR, A PHARMACIST, OR
 AN ADVANCED PRACTICE NURSE BY REASON OF PROFESSION.-AMENDED TITLE

   02/04/97  Senate Introduced, read first time, placed on calendar
                     without reference SJ-12
   02/18/97  Senate Amended SJ-13
   02/18/97  Senate Debate interrupted SJ-13
   03/05/97  Senate Debate interrupted SJ-36
   03/06/97  Senate Debate interrupted SJ-40
   03/11/97  Senate Debate interrupted SJ-25
   03/18/97  Senate Debate interrupted SJ-15
   03/26/97  Senate Debate interrupted SJ-55
   04/01/97  Senate Amended SJ-20
   04/01/97  Senate Read second time SJ-20
   04/01/97  Senate Special order SJ-26
   04/02/97  Senate Read third time and sent to House SJ-24
   04/02/97  House  Introduced and read first time HJ-128
   04/02/97  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-128
   04/08/98  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-41
   04/15/98  House  Amended HJ-54
   04/15/98  House  Read second time HJ-59
   04/16/98  House  Read third time and returned to Senate with
                     amendments HJ-16
   05/27/98  Senate House amendment amended SJ-31
   05/27/98  Senate Returned to House with amendments SJ-31
   06/03/98  House  Non-concurrence in Senate amendment HJ-18
   06/04/98  Senate Senate insists upon amendment and conference
                     committee appointed Sens. McConnell, Patterson,
                     Short SJ-202
   06/04/98  House  Conference committee appointed Reps. Cato, Kirsh,
                     Tripp HJ-51
   06/16/98  House  Conference report received and adopted HJ-13
   06/16/98  Senate Conference report received and adopted
   06/16/98  House  Ordered enrolled for ratification HJ-150
   06/17/98         Ratified R 529
   07/29/98         Signed By Governor
   07/29/98         Effective date 01/01/99, except that the
                     provisions of the act applicable to
                     employer-sponsored health plans are effective
                     for plan years beginning on or after 01/01/99
   08/26/98         Copies available
   09/14/98         Act No. 441

AN ACT TO AMEND CHAPTER 71, TITLE 38, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 17, SO AS TO ENACT THE SOUTH CAROLINA PATIENTS' INSURANCE AND BENEFITS PROTECTION ACT WHICH DEFINES CERTAIN HEALTH CARE PLANS AND OTHER TERMS, REQUIRES THE OFFER OF A POINT-OF-SERVICE OPTION WHEN THE INSURED OR MEMBER IS EMPLOYED BY AN EMPLOYER THAT HAS MORE THAN FIFTY ELIGIBLE EMPLOYEES AND THAT OFFERS ONLY A CLOSED PANEL HEALTH CARE PLAN, PROVIDES FOR THE DIFFERENTIALS IN PREMIUMS, DEDUCTIBLES, COPAYMENTS, AND COINSURANCE, AND PROHIBITS DISCRIMINATION BY THE HEALTH PLANS AGAINST A PHYSICIAN, A PODIATRIST, AN OPTOMETRIST, AN ORAL SURGEON, A CHIROPRACTOR, A PHARMACIST, OR AN ADVANCED PRACTICE NURSE BY REASON OF PROFESSION.

Be it enacted by the General Assembly of the State of South Carolina:

Insurance and benefits protections

SECTION 1. Chapter 71, Title 38 of the 1976 Code is amended by adding:

Section 38-71-1710. This article may be cited as the 'South Carolina Patients' Insurance and Benefits Protection Act'.

Section 38-71-1720. As used in this article:

(1) 'Closed panel health plan' means a network plan that requires an insured or a member to seek covered health care services or supplies, except in the case of emergency, exclusively from network providers.

(2) 'Eligibility' means the time at which an insured or a member is entitled to enroll under the terms of the coverage offered by the network plan by virtue of:

(a) terms of employment;

(b) an annual open enrollment period; or

(c) at any other time during which the network plan's procedures or South Carolina law allows enrollment in the plan or allows renewal in the plan.

(3) 'Health insurance coverage' means coverage as defined in Section 38-71-840(14).

(4) 'Network plan' means a plan as defined in Section 38-71-840(24).

(5) 'Network providers' means those entities and individuals who provide covered health care services or supplies to an insured or a member pursuant to a contract with a network plan to act as a participating provider.

(6) 'Open panel health plan' means a plan which permits an insured or a member to seek covered health care services or supplies exclusively from an out-of-network provider.

(7) 'Out-of-network providers' means those entities and individuals who provide covered health care services or supplies who are not network providers.

(8) 'Point-of-service option' means a network plan that provides benefits for services or supplies provided by network providers and provides benefits for services or supplies provided by nonparticipating network providers.

(a) In-network covered health care services provided through a licensed health maintenance organization are governed by and subject to the provisions of Chapter 33 of this title.

(b) Out-of-network coverage may be underwritten by and provided through the health maintenance organization or through a licensed insurance company. The Director of Insurance may promulgate regulations as necessary or appropriate to implement the provisions of this subsection.

(c) Any benefit limitation for out-of-network covered health care services applied to an annual or lifetime benefit limitation may be offset against the benefit limitation applicable to in-network covered health care services or supplies, regardless of whether out-of-network coverage is provided through a health maintenance organization or an insurance company.

(d) The rating methods used to establish premiums for the point-of-service option must be based on actuarially sound principles.

Section 38-71-1730. (A) For purposes of health plans offered pursuant to this section:

(1) An employer who employs more than fifty eligible employees and who offers to employees major medical, hospitalization, and surgical health insurance coverage only under a closed panel health plan, also shall offer to employees at the time of their eligibility as major medical, hospitalization, and surgical health insurance coverage a point-of-service option. An employee of an employer offering only a closed panel health plan has the right to choose whether to remain in the closed panel health plan or to choose a point-of-service option.

(2) An employer may require an employee who chooses a point-of-service option to be responsible for payment of premiums, deductibles, copayments, or other payments in excess of the benefits provided by the closed panel health plan.

(3) Differences between coinsurance percentages for in-network and out-of-network covered health care services or supplies in a point-of-service option may not exceed a maximum differential of twenty percent. The coinsurance percentage for in-network and out-of-network covered health care services or supplies provided by dentists may not exceed a maximum difference of five percent.

(4) An employee, a spouse, or a dependent receiving treatment for an illness covered under a closed panel health plan may continue to receive services from a provider who elects to discontinue participation as a closed panel plan provider, subject to the terms of the contract between the provider and the health plan. This right of continuation is limited to a period of ninety days or the anniversary date of the plan, whichever occurs first.

(5) A point-of-service option or closed panel health plan offered pursuant to this article may not discriminate against a physician, a podiatrist, an optometrist, an oral surgeon, or a chiropractor by excluding the provider from participating in the plan on the basis of the profession. A health care plan may not exclude these providers from providing health care services which they are licensed to provide and which are covered by the plan and as determined by medical necessity under utilization review guidelines. Nothing in this section interferes in any way with the medical decision of the primary health care provider to use or not use any health care professional on a case-by-case basis.

(6) A pharmacist may provide professional services under the pharmacist's scope of practice so long as the services are provided pursuant to a prescription written by a medical doctor or dentist with whom the patient has an established physician-patient relationship. Nothing in this subsection requires a managed care plan to provide reimbursement to a pharmacist. An advanced practice nurse functioning as authorized by the State Board of Nursing Regulation 91-6 may provide professional services under the advanced practice nurse's scope of practice so long as the services provided are pursuant to protocols by a medical doctor with whom the patient has an established physician-patient relationship. A point-of-service option offered pursuant to this section may not discriminate against an advanced practice nurse. Nothing in this subsection requires a managed care plan to provide reimbursement to an advanced practice nurse.

(7) Nothing contained in this article affects in any way a plan exempted by the federal Employee Retirement Income Security Act of 1974 or any South Carolina law in existence before January 1, 1999, and state employee health insurance programs or any political subdivision self-funded health insurance program, and this article does not affect the right of an employer to specify plan design or affect the right of a plan to credential or re-credential a provider. Nothing contained in this article affects accident-only, blanket accident and sickness, specified disease, credit, Medicare supplement, long-term care, or disability income insurance coverage issued as a supplement to liability or other insurance coverage designed solely to provide payments on a per diem, fixed-indemnity, or nonexpense incurred basis, coverage for Medicare or Medicaid services pursuant to a contract with state or federal government, worker's compensation or similar insurance, or automobile medical payment insurance.

(B) This section applies only to employers who employ more than fifty eligible employees and who offer as major medical, hospitalization, and surgical health insurance coverage, only a closed panel health plan.

Section 38-71-1740. (A) For purposes of any health insurance plan, health maintenance organization, or any other health benefits plan offered in this State under the jurisdiction of South Carolina law:

(1) Each party to a managed care participating provider agreement is responsible for the legal consequences and costs of his own acts or omissions, or both, and is not responsible for the acts or omissions, or both, of the other party. A clause in a participating provider agreement to the contrary is unlawful in this State, as a matter of public policy, whether entered into before or after January 1, 1999.

(2) To the extent that a network plan requires an insured or a member to receive health benefits through a network of providers, the provisions of participating provider agreements may not limit the network provider's:

(a) ability to discuss with an insured or a member, the treatment options available to the insured or member, risks associated with treatments, utilization management decisions, and recommended course of treatment;

(b) legal obligations to an insured or a member as specified under the provider's professional license.

(B) Nothing in this section:

(1) prevents a network plan from prohibiting disclosure by network providers of trade secrets;

(2) subjects a network plan to liability for clinical decisions made solely by the network provider; and

(3) limits the ability of the network plan otherwise prudently to administer its provider contracts.

Section 38-71-1750. A network plan must disclose in writing, using the plain and ordinary meaning of words so as reasonably to ensure comprehension by the insured or member, and make available to an insured or a member at the time of enrollment:

(1) services or benefits under the plan, including limitations on services;

(2) rules regarding copayments, prior authorization, and review requirements that apply to the benefits plan of the insured or member;

(3) potential financial liability for the insured or member to pay for a portion of services received from an out-of-network provider;

(4) financial obligations of the insured or member for items and services both in and out of the network;

(5) the number, mix, and distribution of network providers and a current list of network providers upon request from an insured or a member;

(6) the rights and responsibilities of an insured or a member, including an explanation of any appeals process for the denial of care or services under the plan;

(7) the existence of any limitations on the choice of providers by an insured or a member."

Severability clause

SECTION 2. If a provision of this act or the application of the provision to a person or circumstance is held to be unconstitutional, the remainder of this act and the application of the provisions of this act to a person or circumstance is not affected.

Time effective

SECTION 3. This act takes effect January 1, 1999, except that the provisions of the act applicable to employer-sponsored health plans are effective for plan years beginning on or after January 1, 1999.

Approved the 29th day of July, 1998.