08 LC 33
2671S
The
House Committee on Rules offers the following substitute to SB 109:
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Title 33 of the Official Code of Georgia Annotated, relating to insurance,
so as to provide certain definitions; to include plan administrators in prompt
pay requirements; to provide for penalties; to amend Chapter 4 of Title 26 of
the Official Code of Georgia Annotated, the "Georgia Pharmacy Practice Act," so
as to provide for regulation and licensure of pharmacy benefits managers by the
Commissioner of Insurance; to provide for definitions; to provide for license
requirements and filing fees; to provide for requirements and procedures
affecting pharmacy benefits managers; to provide for related matters; to provide
for effective dates; to repeal conflicting laws; and for other
purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Title
33 of the Official Code of Georgia Annotated, relating to insurance, is amended
by revising Code Section 33-23-100, relating to the definition of administrator,
as follows:
"33-23-100.
(a)
As used in this article, the term:
(1)
'Administrator' means any business entity that, directly or indirectly, collects
charges, fees, or premiums; adjusts or settles claims, including investigating
or examining claims or receiving, disbursing, handling, or otherwise being
responsible for claim funds;
and
or
provides underwriting or precertification and preauthorization of
hospitalizations or medical treatments for residents of this state for or on
behalf of any insurer, including business entities that act on behalf of
multiple
a single or
multiple employer self-insurance health
plans,
and
plan or
a self-insured
municipalities
municipality
or other political
subdivisions
subdivision.
Licensure is also required for administrators who act on behalf of self-insured
plans providing workers´ compensation benefits pursuant to Chapter 9 of
Title 34. For purposes of this article, each activity undertaken by the
administrator on behalf of an insurer or the client of the administrator is
considered a transaction and is subject to the provisions of this
title.
(2)
'Business entity' means a corporation, association, partnership, sole
proprietorship, limited liability company, limited liability partnership, or
other legal entity.
(3)
'Standard financial quarter' means a three-month period ending on March 31, June
30, September 30, or December 31 of any calendar year.
(b)
Notwithstanding the provisions of subsection (a) of this Code section, the
following are exempt from licensure
as
so
long as such entities are acting directly through their officers and
employees:
(1)
An employer on behalf of its employees or the employees of one or more
subsidiary or affiliated corporations of such employer;
(2)
A union on behalf of its members;
(3)
An insurance company licensed in this state or its affiliate unless the
affiliate administrator is placing business with a nonaffiliate insurer not
licensed in this state;
(4)
An insurer which is not authorized to transact insurance in this state if such
insurer is administering a policy lawfully issued by it in and pursuant to the
laws of a state in which it is authorized to transact insurance;
(5)
A life or accident and sickness insurance agent or broker licensed in this state
whose activities are limited exclusively to the sale of insurance;
(6)
A creditor on behalf of its debtors with respect to insurance covering a debt
between the creditor and its debtors;
(7)
A trust established in conformity with 29 U.S.C. Section 186 and its trustees,
agents, and employees acting thereunder;
(8)
A trust exempt from taxation under Section 501(a) of the Internal Revenue Code
and its trustees and employees acting thereunder or a custodian and its agents
and employees acting pursuant to a custodian account which meets the
requirements of Section 401(f) of the Internal Revenue Code;
(9)
A bank, credit union, or other financial institution which is subject to
supervision or examination by federal or state banking authorities;
(10)
A credit card issuing company which advances for and collects premiums or
charges from its credit card holders who have authorized it to do so, provided
that such company does not adjust or settle claims;
(11)
A person who adjusts or settles claims in the normal course of his or her
practice or employment as an attorney and who does not collect charges or
premiums in connection with life or accident and sickness insurance coverage or
annuities;
(12)
A business
entity that acts solely as an administrator of one or more bona fide employee
benefit plans established by an employer or an employee organization, or both,
for whom the insurance laws of this state are preempted pursuant to the federal
Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et
seq.
An insurance
company licensed in this state or its affiliate if such insurance company or its
affiliate is solely administering limited benefit insurance. For the purpose of
this paragraph, the term 'limited benefit insurance' means accident or sickness
insurance designed, advertised, and marketed to supplement major medical
insurance, specifically: accident only, CHAMPUS supplement, disability income,
fixed indemnity, long-term care, or specified
disease; or
(13)
An association that administers workers´ compensation claims solely on
behalf of its members.
(c)
A business entity claiming an exemption shall submit an exemption notice on a
form provided by the Commissioner. This form must be signed by an officer of
the company and submitted to the department by December 31 of the year prior to
the year for which an exemption is to be claimed. Such exemption notice shall
be updated in writing within 30 days if the basis for such exemption changes.
An
administrator claiming an exemption pursuant to paragraphs (3) and (4) of
subsection (b) of this Code section shall be subject to the provisions of Code
Sections 33-24-59.5 and 33-24-59.13.
(d)
Obtaining a license as an administrator does not exempt the applicant from other
licensing requirements under this title.
(e)
Obtaining a license as an administrator subjects the applicant to the provisions
of Code Sections 33-24-59.5 and 33-24-59.13.
(f)
An administrator shall be subject to Code Sections 33-24-59.5 and 33-24-59.13
unless the administrator provides sufficient evidence that the self-insured
health plan failed to properly fund the plan to allow the administrator to pay
any outside claim."
SECTION
2.
Said
title is further amended by revising Code Section 33-24-59.5, relating to timely
payment of health benefits, as follows:
"33-24-59.5.
(a)
As used in this Code section, the term:
(1)
'Benefits' means the coverages provided by a health benefit plan for financing
or delivery of health care goods or services; but such term does not include
capitated payment arrangements under managed care plans.
(2)
'Health benefit plan' means any hospital or medical insurance policy or
certificate, health care plan contract or certificate, qualified higher
deductible health plan, health maintenance organization subscriber contract, any
health benefit plan established pursuant to Article 1 of Chapter 18 of Title 45,
or any dental or vision care plan or policy, or managed care plan
or
self-insured plan; but health benefit plan
does not include policies issued in accordance with Chapter 31 of this title;
disability income policies; or Chapter 9 of Title 34, relating to workers´
compensation.
(3)
'Insurer' means an accident and sickness insurer, fraternal benefit society,
nonprofit hospital service corporation, nonprofit medical service corporation,
health care corporation, health maintenance organization, provider sponsored
health care corporation, or any similar entity and any self-insured health
benefit plan
not subject
to the exclusive jurisdiction of the federal Employee Retirement Income Security
Act of 1974, 29 U.S.C. Section 1001, et
seq., which entity provides for the
financing or delivery of health care services through a health benefit plan,
the plan
administrator of any health plan, or the
plan administrator of any health benefit plan established pursuant to Article 1
of Chapter 18 of Title 45
or any other
administrator as defined in paragraph (1) of subsection (a) of Code Section
33-23-100.
(b)(1)
All benefits under a health benefit plan will be payable by the insurer which is
obligated to finance or deliver health care services under that plan upon such
insurer´s receipt of written
or
electronic proof of loss or claim for
payment for health care goods or services provided. The insurer shall within 15
working days
for electronic
claims or 30 calendar days for paper
claims after such receipt mail
or send
electronically to the insured or other
person claiming payments under the plan payment for such benefits or a letter or
electronic notice which states the reasons the insurer may have for failing to
pay the claim, either in whole or in part, and which also gives the person so
notified a written itemization of any documents or other information needed to
process the claim or any portions thereof which are not being paid. Where the
insurer disputes a portion of the claim, any undisputed portion of the claim
shall be paid by the insurer in accordance with this chapter. When all of the
listed documents or other information needed to process the claim has been
received by the insurer, the insurer shall then have 15 working days
for electronic
claims or 30 calendar days for paper
claims within which to process and either
mail payment for the claim or a letter or notice denying it, in whole or in
part, giving the insured or other person claiming payments under the plan the
insurer´s reasons for such denial.
(2)
Receipt of any proof, claim, or documentation by an entity which administrates
or processes claims on behalf of an insurer shall be deemed receipt of the same
by the insurer for purposes of this Code section.
(c)
Each insurer shall pay to the insured or other person claiming payments under
the health benefit plan interest equal to
18
12
percent per annum on the proceeds or benefits due under the terms of such plan
for failure to comply with subsection (b) of this Code section.
(d)
An insurer may only be subject to an administrative penalty by the Commissioner
as authorized by the insurance laws of this state when such insurer processes
less than 95 percent of all claims in a standard financial quarter in compliance
with paragraph (1) of subsection (b) of this Code section. Such penalty shall
be assessed on data collected by the Commissioner.
(e)
This Code section shall be applicable when an insurer is adjudicating claims for
its fully insured business or its business as a third-party
administrator."
SECTION
3.
Said
title is further amended in Article 1 of Chapter 24, relating to general
provisions concerning insurance, by adding a new Code section to read as
follows:
"33-24-59.13.
(a)
As used in this Code section, the term:
(1)
'Benefits' shall have the same meaning as provided in Code Section
33-24-59.5.
(2)
'Facility' shall have the same meaning as provided in Code Section
33-20A-3.
(3)
'Health benefit plan' shall have the same meaning as provided in Code Section
33-24-59.5.
(4)
'Health care provider' shall have the same meaning as provided in Code Section
33-20A-3.
(5)
'Insurer' shall have the same meaning as provided in paragraph (3) of Code
Section 33-24-59.5.
(b)(1)
All benefits under a health benefit plan will be payable by the insurer which is
obligated to finance or deliver health care services under that plan upon such
insurer´s receipt of written or electronic proof of loss or claim for
payment for health care goods or services provided. The insurer shall within 15
working days for electronic claims or 30 calendar days for paper claims after
such receipt mail or send electronically to the facility or health care provider
claiming payments under the plan payment for such benefits or a letter or notice
which states the reasons the insurer may have for failing to pay the claim,
either in whole or in part, and which also gives the facility or health care
provider so notified a written itemization of any documents or other information
needed to process the claim or any portions thereof which are not being paid.
Where the insurer disputes a portion of the claim, any undisputed portion of the
claim shall be paid by the insurer in accordance with this chapter. When all of
the listed documents or other information needed to process the claim has been
received by the insurer, the insurer shall then have 15 working days for
electronic claims or 30 calendar days for paper claims within which to process
and either mail payment for the claim or a letter or notice denying it, in whole
or in part, giving the facility or health care provider claiming payments under
the plan the insurer´s reasons for such denial.
(2)
Receipt of any proof, claim, or documentation by an entity which administers or
processes claims on behalf of an insurer shall be deemed receipt of the same by
the insurer for purposes of this Code section.
(c)
Each insurer shall pay to the facility or health care provider claiming payments
under the health benefit plan interest equal to 12 percent per annum on the
proceeds or benefits due under the terms of such plan for failure to comply with
subsection (b) of this Code section.
(d)
An insurer may only be subject to an administrative penalty by the Commissioner
as authorized by the insurance laws of this state when such insurer processes
less than 95 percent of all claims in a standard financial quarter in compliance
with paragraph (1) of subsection (b) of this Code section. Such penalty shall
be assessed on data collected by the Commissioner.
(e)
This Code section shall be applicable when an insurer is adjudicating claims for
its fully insured business or its business as a third-party
administrator."
SECTION
4.
Chapter
4 of Title 26 of the Official Code of Georgia Annotated, the "Georgia Pharmacy
Practice Act," is amended by adding a new article to read as
follows:
"ARTICLE
13
26-4-210.
As
used in this article, the term:
(1)
'Business entity' means a corporation, association, partnership, sole
proprietorship, limited liability company, limited liability partnership, or
other legal entity.
(2)
'Commissioner' means the Commissioner of Insurance.
(3)
'Pharmacy benefits manager' means a person, business, or other entity that
performs pharmacy benefits management. The term includes a person or entity
acting for a pharmacy benefits manager in a contractual or employment
relationship in the performance of pharmacy benefits management for a covered
entity. This term shall not include a hospital health system operating a
formulary process or providing a prescription drug program for the benefit of
covered individuals including the hospital health system´s employees and
their dependents.
26-4-211.
(a)
No business entity shall act as or hold itself out to be a pharmacy benefits
manager in this state, other than an applicant licensed in this state for the
kinds of business for which it is acting as a pharmacy benefits manager, unless
such business entity holds a license as a pharmacy benefits manager issued by
the Commissioner. The license shall be renewed on an annual basis and in such
manner as the Commissioner may prescribe by rule or regulation. Failure to hold
such license shall subject the pharmacy benefits manager to the fines and other
appropriate penalties as provided in Chapter 2 of Title 33.
(b)
An application for a pharmacy benefits manager´s license or an application
for renewal of such license shall be accompanied by a filing fee to be
prescribed by rule or regulation of the Commissioner.
(c)
A license may be refused or a license duly issued may be suspended or revoked or
the renewal of such license refused by the Commissioner if the Commissioner
finds that the applicant for or holder of the license:
(1)
Has intentionally misrepresented or concealed any material fact in the
application for the license;
(2)
Has obtained or attempted to obtain the license by misrepresentation,
concealment, or other fraud;
(3)
Has misappropriated, converted to his or her own use, or illegally withheld
money belonging to an insurer or an insured or beneficiary;
(4)
Has committed fraudulent practices;
(5)
Has materially misrepresented the terms and conditions of insurance policies or
contracts;
(6)
Has failed to comply with or has violated any proper order, rule, or regulation
issued by the Commissioner;
(7)
Is not in good faith carrying on business as a pharmacy benefits
manager;
(8)
Has failed to obtain for initial licensure or retain for annual renewal an
adequate net worth as prescribed by order, rule, or regulation of the
Commissioner; or
(9)
Has shown lack of trustworthiness or lack of competence to act as a pharmacy
benefits manager.
(d)
If the Commissioner moves to suspend, revoke, or nonrenew a license for a
pharmacy benefits manager, the Commissioner shall provide notice of that action
to the pharmacy benefits manager and the pharmacy benefits manager may invoke
the right to an administrative hearing in accordance with Chapter 2 of Title
33.
(e)
No licensee whose license has been revoked as prescribed under this Code section
shall be entitled to file another application for a license within five years
from the effective date of the revocation or, if judicial review of such
revocation is sought, within five years from the date of final court order or
decree affirming the revocation. The application when filed may be refused by
the Commissioner unless the applicant shows good cause why the revocation of its
license shall not be deemed a bar to the issuance of a new license.
(f)
Appeal from any order or decision of the Commissioner made pursuant to this
article shall be taken as provided in Chapter 2 of Title 33.
(g)(1)
The Commissioner shall have the authority to issue a probationary license to any
applicant under this article.
(2)
A probationary license may be issued for a period of not less than three months
and not longer than 12 months and shall be subject to immediate revocation for
cause at any time with a hearing.
(3)
The Commissioner, at his or her discretion, shall prescribe the terms of
probation, may extend the probationary period, or refuse to grant a license at
the end of any probationary period.
(h)
A pharmacy benefits manager´s license may not be sold or transferred to a
nonaffiliated or otherwise unrelated party. A pharmacy benefits manager may not
contract or subcontract any of its negotiated services to any unlicensed
business entity unless a special authorization is approved by the Commissioner
prior to entering into a contracted or subcontracted arrangement.
(i)
The Commissioner may, at his or her discretion, assess a fine of $1,000.00
against any business entity acting as a pharmacy benefits manager without a
license for each transaction in violation of this chapter.
(j)
A licensed pharmacy benefits manager is not permitted to market or administer
any insurance product not approved in Georgia or that is issued by a nonadmitted
insurer or unauthorized multiple employer self-insured health
plan."
SECTION
5.
Sections
1, 2, and 3 of this Act shall become effective on January 1, 2009. All other
sections shall become effective on July 1, 2008.
SECTION
6.
All
laws and parts of laws in conflict with this Act are repealed.