12.3.2 Florida Laws and Regulations Regarding HMOs
The first HMO was licensed in Florida in 1972. Any person who is NOT licensed as a health insurance agent is prohibited from selling or marketing HMO contracts in any manner of participation. Florida law specifically states who is empowered to sell HMO contracts, stating they can be sold only by licensed and appointed health insurance agents or full-time salaried employees or officers of an HMO who devote most of their services to activities other than soliciting HMO contracts from the public and who receive no commission or compensation for procuring such contracts.
Can an agent use the HMO Consumer Assistance Plan (CAP) in his or her advertisements?
No. The law specifically prohibits the use of the CAP in any way in the sale of an HMO contract, even if it is for the purpose of reassuring the prospect.
Every subscriber must receive a benefits package that includes a copy of the HMO contract and certificate and a member's handbook. The contract must contain all of the provisions and disclosures required by law.
1. The rates charged shall not be excessive, inadequate or unfairly discriminatory, as determined by the Office of Insurance Regulation.
2. The contract must not exclude coverage for HIV infection or contain limitations on HIV or AIDS coverage that are different from those that apply to any other sickness or medical condition.
3. It must not exclude or limit benefits because the subscriber has been diagnosed as having a fibrocystic condition, unless the condition is diagnosed through a breast biopsy that demonstrates an increased disposition to developing breast cancer.
4. It must clearly state all services covered by the contract and any limitations placed on these services.
5. The rate of payment must be clearly stated.
6. A statement outlining procedures to be followed for emergency treatment outside the HMO's geographic area must be included.
7. Special provisions pertaining to disenrollment and re-enrollment in Medicare, if applicable, must be noted.
8. A grace period of not less than ten (10) days must be expressly included.
9. Any restrictions regarding preexisting conditions must be noted.
10. A statement delineating immediate coverage for newborn children must be included.
11. Each contract providing family coverage must cover adopted children.
12. Preexisting conditions in children may not be excluded.
13. If maternity services are included, they must allow the options of nurse-midwives, midwives or birth centers, if located within the service area.
14. Ocular services,* if provided, may be furnished by an ophthalmologist, or optometrist, if within the scope of his or her license. (*Ocular services pertain to the eyes.)
15. Anesthesia may be performed by a medical doctor or by a nurse-anesthetist.
16. A statement of time limit on certain defense clause must be included. It must provide that after a period of two years, only fraudulent statements may be used to void a contract or deny payment for a claim.
17. The contract, certificate, or member handbook must be accompanied by an identification card that contains, at a minimum, the following:
a. The name of the organization offering or administering the contract;
b. The name of the subscriber;
c. A statement that the health plan is a health maintenance organization;
d. The member identification number, contract number, and group number;
e. A contract phone number or email address for authorizations and admission certifications;
f. A phone number or address that can be used by hospitals, physicians, or any other person rendering services to obtain benefits verification to estimate patient financial responsibility; and
g. The national plan identifier.
When must an HMO contract be delivered?
The HMO contract, certificate or member's handbook must be delivered within ten working days after approval of the enrollment by the HMO.
The purpose of Florida's Health Maintenance Organization Act is to increase efficiency and economy in the delivery of health care.
Section 641.18 F.S.
"Faced with the continuation of mounting costs of health care plans coupled with the state's interest in high quality care, the Legislature has determined that there is a need to explore alternative methods for the delivery of health care services, with a view toward achieving greater efficiency and economy in providing these services."
Florida's policy according to the Act is to eliminate legal barriers to the promotion and expansion of comprehensive prepaid health plans and to ensure that these comprehensive plans deliver high-quality health care without impeding the present health care delivery system in the state.
When an HMO qualifies and participates in the Florida Health Maintenance Organization Consumer Assistance Plan (mandatory), the Agency for Health Care Administration of Florida will issue the HMO a Health Care Provider Certificate.
The Office of Insurance Regulation issues Certificates of Authority to HMOs who qualify to do business in Florida. Rates charged must not be excessive, inadequate, or unfairly discriminatory, as determined by the Office. Florida statutes require HMOs to comply with capital and surplus minimums, rate filings, contract and forms of submissions, bylaws, marketing procedures, experience, and a host of other criteria established by the Legislature. An HMO must pay all required fees and deposit $10,000 to the "Rehabilitation Administration Expense Fund." Each HMO must file a report of its activities within three months of the end of each fiscal year. A complete examination of all HMO affairs is conducted at least every five years.
How does the Office of Insurance Regulation keep track of HMOs?
Each HMO is required to file a report of its activities within three months of the end of each fiscal year. The Office may require reports more frequently if it is deemed necessary. In addition, the Office can and does conduct on-site visits. A complete examination of all of an HMO's affairs is conducted at least every five years. In this way, the Office can monitor every HMO and require any organization to take corrective action if it is deemed necessary to protect the interest of Florida consumers.
Florida's Consumer Assistance Plan (CAP) is funded by Florida HMOs and operated by the Florida Department of Financial Services to ensure that debts of an HMO are paid in case of insolvency. Florida law specifically prohibits the use of the CAP in any way in the sale of an HMO contract, even if it is for the purpose of reassuring the prospect.
What is meant by insolvency?
This means that all the assets of the HMO, if made immediately available, would not be enough to discharge all of its liabilities; the HMO is unable to pay its debts as they occur in the ordinary course of business.
There is no Florida law stating that maternity benefits must be offered under an HMO. However, if it is offered in either individual or group coverage, the length of stay for in-hospital benefits cannot be limited. Outpatient follow-up care may not be limited if determined to be medically necessary by an obstetrical provider or a pediatric provider. (Prevailing medical standards are currently 48 hours.)
What requirements are in Florida law regarding maternity coverage, if a health insurance policy or HMO contract includes such coverage?
Florida statutes require that an individual or group health insurance policy or HMO contract that provides coverage for maternity care may not limit coverage for the length of maternity stay in a hospital, or for follow-up care outside of a hospital, to a time period below that which is determined to be medically necessary by an obstetrical provider or a pediatric provider in accordance with prevailing medical standards. Coverage for post-delivery care after the mother and newborn leave the hospital must also be included in accordance with prevailing medical standards.
