South Carolina General Assembly
112th Session, 1997-1998

Bill 310


                    Current Status

Bill Number:                    310
Ratification Number:            529
Act Number:                     441
Type of Legislation:            General Bill GB
Introducing Body:               Senate
Introduced Date:                19970204
Primary Sponsor:                Banking and Insurance Committee
                                SBI 02
All Sponsors:                   Banking and Insurance
                                Committee
Drafted Document Number:        res1269.ees
Date Bill Passed both Bodies:   19980616
Date of Last Amendment:         19980616
Governor's Action:              S
Date of Governor's Action:      19980729
Subject:                        Patients' Insurance and Benefits
                                Protection Act, Medical, medical and
                                health

History

Body    Date      Action Description                       Com     Leg Involved
______  ________  _______________________________________  _______ ____________

------  19980817  Act No. A441
------  19980729  Signed by Governor
------  19980617  Ratified R529
House   19980616  Ordered enrolled for ratification
House   19980616  Conference Committee Report adopted      98 HCC
Senate  19980616  Conference Committee Report adopted      88 SCC
House   19980604  Conference powers granted,               98 HCC  Cato
                  appointed Reps. to Committee of                  Kirsh
                  Conference                                       Tripp
Senate  19980604  Conference powers granted,               88 SCC  McConnell
                  appointed Senators to Committee                  Patterson
                  of Conference                                    Martin
Senate  19980604  Insists upon amendment
House   19980603  Non-concurrence in Senate amendment
------  19980528  Corrected and Reprinted
Senate  19980527  House amendments amended,
                  returned to House with amendment
House   19980416  Read third time, returned to Senate
                  with amendment
House   19980415  Amended, read second time
House   19980408  Committee report: Favorable with         26 HLCI
                  amendment
House   19970402  Introduced, read first time,             26 HLCI
                  referred to Committee
Senate  19970402  Read third time, sent to House
Senate  19970401  Made Special Order
Senate  19970401  Amended, read second time
Senate  19970326  Debate interrupted
Senate  19970318  Debate interrupted by adjournment
Senate  19970306  Debate interrupted by adjournment
Senate  19970305  Debate interrupted by adjournment
Senate  19970218  Amended, debate interrupted
                  by adjournment
Senate  19970204  Introduced, read first time,
                  placed on Calendar without reference


View additional legislative information at the LPITS web site.


(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(A441, R529, S310)

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:

"Article 17

Patients' Insurance and Benefits Protection

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.