Alabama Administrative Code Chapter 482-1-079 — Health Maintenance Organizations Generally

482 Alabama Department of Insurance

Ala. Admin. Code r. 482-1-079-.01 Scope And Authority

The following chapters shall govern the issuance of Certificates of Authority and operation of health maintenance organizations pursuant to the authority set forth in Section 27-2-17 and Section 27-21A-19 Code of Ala. 1975.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.02 Definitions

(1) All terms defined in the Health Maintenance Organization Act which are used in these rules shall have the same meaning as in the Act.

(2) HMO. Health maintenance organizations shall be abbreviated as HMO in these rules.

(3) GOVERNING AUTHORITY. The entity, whether natural, corporate or otherwise, in which the ultimate responsibility and authority for the conduct of the HMO is vested.

(4) ASSETS AND LIABILITIES. Assets include but are not limited to cash, bank deposits, securities, accounts receivable, and real estate. Liabilities include notes, mortgages, accounts payable, reserve for taxes, commissions and other charges, borrowed money, debt instruments, reserve for claims, salaries and expenses, and all debts and contingent obligations of any nature whatsoever.

(5) ACTUARIALLY SOUND. The ability of the proposed HMO to deliver all the services to be furnished by the HMO at the rate structure established. This will be determined by the Commissioner based on the HMO's profitability or actuarial study under which the rates are established. Consideration will be given to the character and amount of guaranteed service by the organizers, the method of marketing, and the degree of market penetration that can reasonably be expected.

(6) EXCESSIVE, INADEQUATE OR UNFAIRLY DISCRIMINATORY. A rate shall be deemed to be excessive if such rate is unreasonably high for the services provided when compared with the cost for similar health care services in the community. A rate shall be deemed to be inadequate if the rate is unreasonably low for the services provided, if the continued use of the rate endangers the solvency of the HMO using it, or if continued use by the HMO has or will have the effect of creating unfair competition and a monopoly. However, no rate will be deemed inadequate or excessive if the HMO can show that the rate accurately reflects the real cost of providing the health care services. This provision is designed to promote efficient and effective operation of HMOs. A rate shall be deemed to be unfairly discriminatory if it is a higher or lower rate than that charged to any other person of the same class or group based upon age, sex or physical condition.

(7) PREMIUM. The fixed sum paid by or on behalf of an enrollee or group of enrollees on a prepaid per capital or prepaid aggregate basis for the services rendered by the HMO.

(8) MANAGEMENT CONTRACTOR. Any person other than the management staff entering into an agreement with the governing authority of a HMO for the purpose of managing day-to-day operations of the HMO.

(9) COMMISSIONER. Where used in this chapter shall mean the Commissioner of Insurance.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.03 Application

(1) An application, on forms provided by the Commissioner, accompanied by the greater of a filing fee of Fifty Dollars and a Commissioner's seal fee of Five Dollars (totaling $55.00) or the amount levied by the state of domicile, payable to the Commissioner, shall be completed by the responsible persons in each entity desiring to obtain a certificate of authority as a HMO. The application with a copy in duplicate shall be attested and notarized and be accompanied by biographical affidavits of the principal officers and directors, financial statements on the National Association of Insurance Commissioners HMO "convention" blank, and other supporting documents required by the application form and guidelines. Applicants shall address correspondence to the Examination Division, Alabama Department of Insurance, Montgomery, Alabama 36130. A copy of the application and supporting documents shall be filed with the Department of Public Health, Bureau of Licensure and Certification, Montgomery, Alabama 36130.

(2) Any material change in the plan of operations or any other section set out in the information filed with the application for admission shall be filed with the Commissioner and the State Health Officer prior to modification.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43. Revised: August 13, 2004; effective August 27, 2004. Filed with LRS August 17, 2004. Rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-079-.04 Enrollee Contracts

Enrollee contracts mean the certificate or contract provided to the enrollee which describes the health care services provided and the amount to be charged. Individual or family contracts must contain the entire agreement between the HMO and the enrollees, including but not limited to: date of contract; rate to be charged; mode of payment (monthly, quarterly, etc. with provision for change of mode); grace period for late payment; co-payment features, if any; renewal conditions; services to be furnished; names and addresses of clinics or other facilities at which services are available (which may be listed in a separate addendum that is updated at least every six months); factors pertaining to pre-existing conditions; limitations; exclusions and exceptions, such as waiting periods, specific conditions not covered and limitations on length of stay and all other qualifying or limiting features; provisions pertaining to amount and kind of reimbursement made if illness or accident happens outside of geographic area and explanation of this coverage; provisions for adding new family members; and any other factor necessary for complete understanding of the coverages and exclusions of the contract.

Group master contracts must contain complete information as above, but a certificate may be issued to the individual enrollee who is a member of the group showing the salient features of the plan along with a descriptive pamphlet or brochure to fully explain the coverage if it is first filed with the Commissioner. However, the group master contract shall be available for review by any enrollee or member during regular business hours in the Alabama office of the HMO.

Provisions relating to grievances must be included in all contracts or certificates.

All contracts must be clear and legible. All limitations, exclusions and exceptions (except co-payment provisions) must be grouped together in separate sections with captions in bold-face type and shall be printed with at least the same prominence as provisions which describe the benefits.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.05 Rates

Rates must not be excessive, inadequate or unfairly discriminatory. Rates may not be changed without prior approval of the Commissioner and without thirty (30) days notice of the proposed change given to enrollees. It is therefore recommended that the proposed rate be filed as far in advance as possible to prevent unnecessary expense in the event of a rate disapproval. If the Commissioner does not disapprove the rates (schedule of charges) within thirty (30) days of their filing, they shall be deemed approved.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.06 Advertising

Advertising includes printed and published material, descriptive literature and sales aids, sales talks and sales materials, booklets, forms and pamphlets, illustrations, depictions and form letters, newspaper, radio, television or direct mail advertising.

Advertising must be truthful and not misleading in fact or implication. Words or phrases shall not be used whose meaning is unclear, ambiguous or whose understanding depends upon familiarity with technical terminology.

Words, phrases or illustrations shall not be used in a manner which misleads or has the capacity or tendency to deceive or mislead.

Each HMO shall maintain at its home or principal office a complete file containing a specimen copy of every printed, published, or prepared advertisement disseminated with a notation indicating the manner and extent of distribution and the form number of any contract or health service plan advertised. Such file shall be subject to inspection by the Commissioner or the Public Health Officer. All such advertisements shall be maintained in said file for a period of either four years or until the filing of the next regular report on the financial examination of the HMO, whichever is sooner.

Each HMO subject to the provisions of this chapter shall file with its Annual Statement a certificate of compliance executed by an authorized officer of the HMO wherein it is stated that to the best of his or her knowledge, information, and belief the advertisements which were disseminated in this state by or on behalf of the HMO during the preceding statement year complied or were made to comply in all respects with the provisions of this chapter and the laws of Alabama.

If the Commissioner finds that it may be in the best interests of the public due to possible violations of the Trade Practices Law or the Deceptive Practices Act by the HMO or its agents, he or she may require particular HMOs or agents to submit all or any part of their advertisements to him or her for review prior to use.

All advertisements must contain the name and address of the HMO as filed with the Commissioner.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.07 Merchandising And Agents’ Licensing

(1) The manner of merchandising enrollee contracts must be fully explained by the HMO prior to certification and any subsequent changes in this area must be approved by the Commissioner before use. All salesmen or representatives of the HMO engaged in soliciting enrollees are bound by the advertising rules previously noted. The HMO is responsible for the acts of its agents in soliciting enrollees.

(2) Each sales agent or other representative of an HMO shall satisfactorily pass the examination given by the Commissioner and shall be licensed as a disability agent after meeting qualifications for being examined as a disability agent or otherwise comply with the requirements for being licensed as an agent under Chapter 7, Title 27 Code of Ala. 1975 before representing the HMO in its sales and merchandising activities. Any HMO which pays any commissions to an unlicensed agent or representative shall remit upon demand by the Commissioner a fine of three times the commission paid the agent with the fine not to exceed the total of $5,000.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43. Revised: August 13, 2004; effective August 27, 2004. Filed with LRS August 17, 2004. Rule is not subject to the Alabama Administrative Procedure Act.

Ala. Admin. Code r. 482-1-079-.08 Inspection Of Contract

For individual contracts, an enrollee may, if the contract is not satisfactory for any reason, return it within ten days of its receipt, and receive a full refund of any deposit paid. This right of return shall not act as a cure for misleading or deceptive advertising or selling methods which violate the Trade Practices Law or the Deceptive Practices Act, nor may it be exercised if the enrollee uses the services of the HMO within the ten (10) day period.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.09 Filing, Approval Of Forms

Every contract, rider, endorsement, certificate, application or other form to be used or issued must be filed by the HMO for approval by the Commissioner. The Commissioner shall disapprove any form, or withdraw previous approval thereof if the form:

(1) In any respect is in violation of or fails to comply with the provisions of Sections 27-21A-1 et seq. Code of Ala. 1975, other applicable Alabama statutes, or these chapters.

(2) Contains, or incorporates by reference, any inconsistent, ambiguous or misleading words or phrases, or exceptions and conditions which deceptively affect the risk to be assured under the contract.

(3) Has any title, heading or other indication of its provisions which is misleading.

(4) Is printed or reproduced so as not to be fully legible.

(5) Provides for charges which are excessive, inadequate or unfairly discriminatory.

(6) Contains provisions which are unfair, inequitable, frivolous or contrary to the public policy of this State, or which encourage or lend themselves to misrepresentation.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.10 Annual Report And Quarterly Reports

Each HMO shall furnish to the Commissioner, with a copy to the Department of Public Health, an accurate report annually on or before the first day of March providing the information required by law for the preceding year, in the convention form as approved by the National Association of Insurance Commissioners (N.A.I.C.). Any report which is not filed on or before March 1 will subject the HMO to a fine of $500 and/or delinquency proceedings including suspension or revocation of its certificate of authority if willful and without just cause.

Any quarterly financial reports, if required by the Commissioner, shall be filed by each HMO on forms adopted by the N.A.I.C. not later than forty-five (45) days after the end of each calendar quarter.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.11 Fees

Checks for the original filing or amendments thereto, and for filing of each annual report shall be made payable to the "Commissioner of Insurance." All expenses of examination, travel and per diem charges authorized by Alabama Insurance Regulation Chapter 482-1-003 entitled "Per Diem Subsistence and Compensation incurred in Examination of Domestic Insurance Companies and Others" shall apply to HMOs.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.12 Change Of Name

No name other than that approved by the Commissioner may be used. The name of the HMO may not be changed without prior approval of the Commissioner. Any name which is misleading as to the purpose or type of organization or which is deceptively similar to the name of another licensed HMO shall not be used by the HMO.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.13 Change Of Ownership Or Management

Each HMO which desires to transfer ownership of more than 5% of the stock or ownership interest or control in the HMO shall not do so without first submitting the proposed plan to the Commissioner for review and approval or disapproval in accordance with Section 27-29-3, Code of Ala. 1975. Any change of control shall be governed by the disclosure requirements of Alabama Insurance Regulation Chapter 482-1-055 entitled "Insurance Holding Company Registration and Disclosure."

The HMO shall promptly furnish the Commissioner written notice within thirty days of their election or appointment of any change of personnel among the directors or principal officers of the HMO.

Any management contractor who shall manage the financial affairs, investment affairs or any of the health care activities of the HMO shall be subject to prior approval by the Commissioner with the advice of the State Health Officer. In no instance shall the board of directors of the HMO relinquish the right to dismiss the management contractor for failure to perform his required duties.

Management contracts shall be effective only with the prior written consent of the Commissioner in accordance with Section 27-21A-4 supra and shall include the following:

(1) A description of the proposed role of the HMO governing authority during the term of the proposed management contract. The description shall clearly reflect retention by the governing authority of the HMO of ongoing responsibility for statutory and regulatory compliance;

(2) A provision that clearly recognizes that the responsibilities of the governing authority of the HMO are in no way obviated by entering a management contract and that any powers not specifically delegated to the management contractor through the provisions of the contract remain with the governing authority of the HMO;

(3) A plan for assuring maintenance of the fiscal stability, the level of services provided and the quality of care rendered by the HMO during the term of the management contract;

(4) A provision that annual reports on the financial operations and any other operational data requested by the governing authority of the HMO, the State Health Officer or the Commissioner will be provided by the management contractor;

(5) A provision stating that the management contract approved by the Commissioner shall be the sole agreement between the management contractor and the governing authority of the HMO for the purpose of management of the HMO and payment to the management contractor for management services, and that any amendments or revisions to the management contract shall be effective only with the prior written consent of the Commissioner; and

(6) Specification of payment terms that are reasonable and do not jeopardize the financial solvency of the HMO.

If these management contracts are not disapproved within thirty (30) days of filing they shall be deemed approved.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.14 Insurance - General Liability, Medical Malpractice And Reinsurance

Evidence of the existence of insurance or a plan for self-insurance approved by the Commissioner must be submitted at least 30 days prior to the expiration date of the policy and with each annual report.

Unless the Commissioner grants an exemption from requirements of this section, the HMO shall secure insurance coverage or furnish evidence of acceptable self-insurance to provide:

(1) For payments or services required to be made or furnished under the health care contract to those enrollees who are injured or become ill outside the geographical limits served by the HMO;

(2) Reinsurance protection to the HMO in the event of catastrophic or unusual losses in excess of levels of loss which the HMO assumes in the basis of its calculation of premium charges (schedule of charges);

(3) That the HMO has an agreement with an Alabama licensed insurer or nonprofit health service plan under which the insurer or nonprofit health service plan agrees to issue to enrollees in the HMO, a plan of hospital, medical and surgical insurance at standard conversion premium rates without any underwriting or other requirement, other than an application and payment of the first monthly premium by the enrollee, in the event the HMO is unable to continue in operation;

(4) For a general liability and medical malpractice plan or an adequate plan for self-insurance program approved by the Commissioner. Evidence of these plans must be submitted at least 30 days prior to the expiration date of the policy and with each annual report.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.15 Records And Asset Maintenance Of Domestic HMOs

An Alabama domiciled (domestic) HMO shall keep all necessary records in an Alabama location required for the efficient examination of its financial condition and health care delivery system. These records shall include but not be limited to the general ledger and subsidiary ledgers, management contracts, provider contracts, enrollment records, utilization records, group contract records, premium records, quality of care documentation records, and complaint records.

All original evidences of ownership of assets shall be maintained in a suitable Alabama depository and shall be promptly produced upon request by the Commissioner or his examiners. The HMO shall make reasonable arrangements for the safeguarding of its assets which may include safekeeping or trust arrangements with Alabama banks or trust companies.

Every domestic HMO shall have, and maintain, its principal place of business and home office in this state and shall keep therein complete records of its assets, transactions, and affairs in accordance with such methods and systems as are customary or suitable as to the kind, or kinds, of business transacted.

Every domestic HMO shall have, and maintain, its assets in this state, except as to:

(1) Real property and personal property appurtenant thereto lawfully owned by the HMO and located outside this state; and

(2) Such property of the HMO as may be customary and necessary to enable and facilitate the operation of its branch offices and "regional home offices" located outside this state as long as such records and assets are made readily available at such office for examination by the Commissioner at his request. Removal of all, or a material part thereof, the records or assets of an Alabama domiciled HMO except pursuant to a plan of merger or consolidation approved by the Commissioner, or concealment of such records or assets, or material part thereof, from the Commissioner is prohibited. Upon any removal or attempted removal of such records or assets or upon retention of such records or assets, or material part thereof, outside this state beyond the period specified in the Commissioner's written consent under which the records were so removed or upon concealment of, or attempt to conceal, records or assets in violation of this chapter and Section 27-27-29 supra, the Commissioner shall institute delinquency proceedings against the HMO pursuant to the provisions of Sections 27-32-1 et seq. Code of Ala. 1975.

A domestic HMO, for good cause shown and with the written permission of the Commissioner, may maintain its executive offices outside the State of Alabama provided it keeps an office managed by one or more officers of the HMO and keeps a complete duplicate set of records in Alabama and further agrees to make all records at the executive offices outside Alabama available to the Commissioner upon reasonable notice by him.

Any HMO may evidence ownership of its assets by use of a clearing corporation or federal reserve book-entry deposit system by depositing acceptable securities through an local bank or trust company with which an approved custodial agreement has been executed. For statutory deposits the deposit must also be evidenced by a sworn affidavit made by an officer of the bank in accordance with Chapter 482-1-077.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.16 Deposit Requirements

The initial $100,000 deposit and any subsequent annual deposit requirements of an HMO shall be deposited, through the Commissioner, with the State Treasurer. The deposit shall be in the form of certificates of deposit with solvent, United States banks, or any combination of securities, the market value of which is readily ascertainable, and, if negotiable by delivery or assignment, of the kinds described below:

(1) United States government obligations;

(2) State, county, municipal and school obligations;

(3) Public improvement obligations;

(4) Housing authority obligations;

(5) Obligations, stock of certain federal agencies;

(6) Canadian governmental obligations;

(7) International banks;

(8) Corporate obligations;

(9) Equipment trust obligations;

(10) Railroad leased lines, terminal obligations.

The market value of the deposit of any HMO shall at all times be equal to or greater than $100,000. If at any time the value of the securities held on deposit is less than $100,000, the HMO shall promptly deposit sufficient, acceptable securities to meet the deficiency in market value.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.17 Service Area

Any HMO licensed in Alabama shall, before increasing its service area, make application in duplicate to the State Health Officer and the Commissioner for the expansion of their geographic service area. This application shall include but not be limited to a graphic description in the form of a drawn or printed map of the proposed expansion of geographic area detailed enough to easily determine the area, a description of the physical facilities to be used in providing health care services including a copy of any proposed lease or real estate purchase agreement; a list with their qualifications and licensed status of all contracted health care providers whether HMO employees or independent providers for the expanded service area; and any other information which the State Health Officer or Commissioner may require to evaluate the proposed expansion. The expanded service area will be approved within thirty (30) days after the filing of proposed expanded area, if adequate information is furnished to evaluate the proposal, unless in the opinion of the State Health Officer or Commissioner the expansion will detrimentally and substantially affect the solvency of the HMO or decrease the quality of health care services of the enrollees.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.18 Limitation Period For Payment Of Claims Under Health Maintenance Organization Contracts

All licensed HMO's shall consider claims made under their health care contracts and, if found to be valid and proper, shall pay such claims within forty-five (45) days after the receipt of proof of the fact and amount of loss sustained under such contracts. If reasonable proof is not supplied as to the entire claim, the amount supported by reasonable proof shall be considered overdue if not paid within forty-five (45) days after such proof is received by the HMO. Any part or all of the remainder of the claim that is later supported by reasonable proof shall be considered overdue if not paid within forty-five (45) days after such proof is received by the HMO. For the purposes of calculating the extent to which any benefits are overdue, payment shall be treated as made on the date a draft or other valid instrument was placed in the United States mail to the last known address of the claimant or provider in a properly addressed, postpaid envelope, or, if not so posted, on the date of delivery. When the claim is overdue or denied, the HMO must provide written justification within five days of the overdue or denial date to any providers involved and to the enrollee if the enrollee is financially liable for the denied claim.

The above required payment time period of forty-five (45) days is not applicable if the HMO has approved executed provider contracts in which the HMO and the provider have agreed to a different schedule of payment, in which case, all other provisions set out above will be applicable with the exception that the time payment will be in accordance with the approved contract between the HMO and the provider.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.19 Separability

If any provision of this chapter or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of this chapter and the application of such provision to other persons or circumstances shall not be affected thereby.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.

Ala. Admin. Code r. 482-1-079-.20 Effective Date

The effective date of this chapter is May 8, 1987.

History

• Author: Commissioner of Insurance
• Authority: Code of Ala. 1975, §§27-2-17, 27-21A-19.
• New Rule: Filed April 22, 1987; effective May 8, 1987. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, §27-7-43.