Session of 2023
HOUSE BILL No. 2094
By Committee on Insurance
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AN ACT concerning insurance; relating to health maintenance
organizations and medicare provider organizations; applications for
certificates of authority; specifying certain requirements necessary to
demonstrate fiscal soundness; amending K.S.A. 40-3203 and repealing
the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 40-3203 is hereby amended to read as follows: 40-
3203. (a) Except as otherwise provided by this act, it shall be unlawful for
any person to provide health care healthcare services in the manner
prescribed in subsection (n) or subsection (r) of K.S.A. 40-3202(n) or (r),
and amendments thereto, without first obtaining a certificate of authority
from the commissioner.
(b) Applications for a certificate of authority shall be made in the
form required by the commissioner and shall be verified by an officer or
authorized representative of the applicant and shall set forth or be
accompanied by:
(1) A copy of the basic organizational documents of the applicant
such as articles of incorporation, partnership agreements, trust agreements
or other applicable documents;
(2) a copy of the bylaws, regulations or similar document, if any,
regulating the conduct of the internal affairs of the applicant;
(3) a list of the names, addresses, official capacity with the
organization and biographical information for all of the persons who are to
be responsible for the conduct of its affairs, including all members of the
governing body, the officers and directors in the case of a corporation and
the partners or members in the case of a partnership or corporation;
(4) a sample or representative copy of any contract or agreement
made or to be made between the health maintenance organization or
medicare provider organization and any class of providers and a copy of
any contract made or agreement made or to be made, excluding individual
employment contracts or agreements, between third party administrators,
marketing consultants or persons listed in subsection paragraph (3) and
the health maintenance organization or medicare provider organization;
(5) a statement generally describing the organization, its enrollment
process, its operation, its quality assurance mechanism, its internal
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grievance procedures, in the case of a health maintenance organization the
methods it proposes to use to offer its enrollees an opportunity to
participate in matters of policy and operation, the geographic area or areas
to be served, the location and hours of operation of the facilities at which
health care healthcare services will be regularly available to enrollees in
the case of staff and group practices, the type and specialty of health care
healthcare personnel and the number of personnel in each specialty
category engaged to provide health care healthcare services in the case of
staff and group practices, and a records system providing documentation
of utilization rates for enrollees. In cases other than staff and group
practices, the organization shall provide a list of names, addresses and
telephone numbers of providers by specialty;
(6) copies of all contract forms the organization proposes to offer
enrollees together with a table of rates to be charged;
(7) the following statements of the fiscal soundness of the
organization:
(A) Descriptions of financing arrangements for operational deficits
and for developmental costs if operational one year or less;
(B) a copy of the most recent unaudited financial statements of the
health maintenance organization or medicare provider organization;
(C) financial projections in conformity with statutory accounting
practices prescribed or otherwise permitted by the department of insurance
of the state of domicile for a minimum of three years from the anticipated
date of certification and on a monthly basis from the date of certification
through one year from the date of application. If the health maintenance
organization or medicare provider organization is expected to incur a
deficit, projections shall be made for each deficit year and for one year
thereafter, up to a maximum of five years. All financial projections shall
include:
(i) Monthly statements of revenue and expense for the first year on a
gross dollar as well as per-member-per-month basis, with quarters
consistent with standard calendar year quarters;
(ii) quarterly Statements of revenue and expense for each subsequent
year;
(iii)(ii) a quarterly balance sheet for each year; and
(iv)(iii) a statement and justification of assumptions;
(8) a description of the procedure to be utilized by a health
maintenance organization or medicare provider organization to provide
for:
(A) Offering enrollees an opportunity to participate in matters of
policy and operation of a health maintenance organization;
(B) monitoring of the quality of care provided by such organization
including, as a minimum, peer review; and
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(C) resolving complaints and grievances initiated by enrollees;
(9) a written irrevocable consent duly executed by such applicant, if
the applicant is a nonresident, appointing the commissioner as the person
upon whom lawful process in any legal action against such organization on
any cause of action arising in this state may be served and that such
service of process shall be valid and binding in the same extent as if
personal service had been had and obtained upon said nonresident in this
state;
(10) a plan, in the case of group or staff practices, that will provide
for maintaining a medical records system which that is adequate to provide
an accurate documentation of utilization by every enrollee, such system to
identify clearly, at a minimum, each patient by name, age and sex and to
indicate clearly the services provided, when, where, and by whom, the
diagnosis, treatment and drug therapy, and in all other cases, evidence that
contracts with providers require that similar medical records systems be in
place;
(11) evidence of adequate insurance coverage or an adequate plan for
self-insurance to respond to claims for injuries arising out of the furnishing
of health care healthcare;
(12) such other information as may be required by the commissioner
to make the determinations required by K.S.A. 40-3204, and amendments
thereto; and
(13) in lieu of any of the application requirements imposed by this
section on a medicare provider organization, the commissioner may accept
any report or application filed by the medicare provider organization with
the appropriate examining agency or official of another state or agency of
the federal government.
(c) The commissioner may promulgate rules and regulations the
commissioner deems necessary to the proper administration of this act to
require a health maintenance organization or medicare provider
organization, subsequent to receiving its certificate of authority to submit
the information, modifications or amendments to the items described in
subsection (b) to the commissioner prior to the effectuation of the
modification or amendment or to require the health maintenance
organization to indicate the modifications to the commissioner. Any
modification or amendment for which the approval of the commissioner is
required shall be deemed approved unless disapproved within 30 days,
except the commissioner may postpone the action for such further time,
not exceeding an additional 30 days, as necessary for proper consideration.
Sec. 2. K.S.A. 40-3203 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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