Introduced

REGISTRATION OF DISCOUNT MEDICAL PLAN ORGANIZATIONS - Under the act, it is unlawful to transact business in this state as a discount medical plan organization, unless the organization is a legal entity organized under the laws of this state, authorized to transact business in this state; and is registered as a discount medical plan organization with the director or duly authorized by the director as an insurance company, licensed health maintenance organization, licensed group health service organization or third party administrator.

The act delineates the requirements for registering as a discount medical plan organization. The applicant must pay the director an application fee of $250. The registration is valid for one year. The fee for renewing a discount plan organization registration is also $250. Providers who provide discounts to their own patients are not required to register as discount medical plan organizations under the act.

EXAMINATION AND INVESTIGATORY POWERS OF DIRECTOR WITH RESPECT TO DISCOUNT MEDICAL PLANS - Under the act, the director may examine or investigate the business and affairs of any discount medical plan organization. The director may require discount medical plan organizations to produce any records, books, files, advertising and solicitation materials, or other information. The expenses incurred in conducting any examination shall be paid by the discount medical plan organization.

FEES ASSESSED AND REIMBURSEMENT OF FEES BY DISCOUNT MEDICAL PLAN ORGANIZATIONS - Under the act, a discount medical plan organization may charge a reasonable one-time processing fee and a periodic charge as long as the fee is disclosed to the applicant. If a member cancels his or her membership within the first 30 days after receipt of the discount card and other membership materials, the member shall receive a reimbursement of all periodic charges paid. The return of all periodic charges shall be made within 30 days of the date of the cancellation. If all of the periodic charges have not been paid within 30 days, interest shall be assessed and paid on the proceeds at a rate of the treasury bill rate of the preceding calendar year, plus two percentage points.

UNLAWFUL ACTIVITIES BY DISCOUNT MEDICAL PLAN ORGANIZATIONS -

Under the act, a discount medical plan organization shall not use in its advertisements, marketing material, brochures, and discount cards the terms that could reasonably mislead a person to believe that the discount medical plan is health insurance. A discount medical plan organization shall not have restrictions on free access to plan providers including waiting periods and notification periods. A discount medical plan organization shall not pay providers any fees for medical services or collect money from a member for payment to a provider for specific medical services furnished or to be furnished to the member, unless the organization is licensed by the director to act as an administrator.

DISCLOSURES - The act sets forth disclosure requirements that must appear in advertisements, marketing materials or brochures which relate to a discount medical plan.

NET WORTH REQUIREMENTS - Each discount medical plan organization registered under the act shall maintain a net worth of at least $150,000.

NOTICE REQUIREMENTS - Each discount medical plan organization shall provide the director at least 30 days' advance notice of any change in the discount medical plan organization's name, address, principal business address, or mailing address.

PROVIDER INFORMATION - Under the act, each discount medical plan organization shall maintain a current list of the names and addresses of the providers with which it has contracted on a web site page, the address of which shall be prominently displayed on all its advertisements, marketing materials, brochures, and discount cards.

SURETY BOND REQUIREMENT - Under the act, a discount medical plan organization must maintain a surety bond with the director, having at all times a value of not less than $35,000, for use by the director in protecting plan members.

DENIAL, SUSPENSION AND REVOCATION OF REGISTRATIONS - Under the act, the director may deny a registration to an applicant or refuse to renew, suspend, or revoke the registration of a registrant if the applicant or registrant makes a material misstatement or misrepresentation in an application for registration; fraudulently obtains or attempts to obtain a registration for the applicant or registrant or for another; fails to fulfill its obligations as a discount medical plan organization; or violates other provisions of the act. If the director has cause to believe that grounds for the suspension or revocation of a registration exist, the director shall notify the discount medical plan organization in writing and shall provide opportunity for a hearing.

ADMINISTRATIVE ORDERS AND CIVIL ACTIONS - The act authorizes the director to issue administrative orders and maintain civil actions against discount medical plan organizations that are in violation of the act.

STEPHEN WITTE