HB 1081

CS

CHAMBER ACTION

1	The Health Care General Committee recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to discount medical plan organizations;
7	amending s. 636.202, F.S.; revising a definition; amending
8	s. 636.204, F.S.; revising provisions relating to
9	licensure requirements to do business as a discount
10	medical plan organization; creating s. 636.205, F.S.;
11	providing requirements for issuance of a license;
12	authorizing the Office of Insurance Regulation to deny a
13	license; amending s. 636.206, F.S.; providing that
14	discount medical plan organizations are not subject to the
15	Florida Insurance Code for purposes of examination and
16	investigation; creating s. 636.207, F.S.; providing for
17	applicability of pt. II of ch. 636, F.S.; amending s.
18	636.208, F.S.; revising provisions relating to
19	reimbursement of certain charges and fees upon
20	cancellation of membership in the plan; amending s.
21	636.210, F.S.; revising prohibitions relating to
22	advertising; amending s. 636.212, F.S.; revising
23	provisions relating to disclosures to prospective members;
24	amending s. 636.214, F.S.; revising provisions relating to
25	provider agreements; amending s. 636.216, F.S.; providing
26	conditions for approval of charges and forms; deleting a
27	provision relating to request for a hearing; amending s.
28	636.218, F.S.; revising requirements for information to be
29	included in annual reports; creating s. 636.223, F.S.;
30	providing for administrative penalties; amending s.
31	636.228, F.S.; specifying marketing requirements of
32	discount medical plans; providing limitations; amending s.
33	636.230, F.S.; specifying fee disclosure requirements for
34	bundling discount medical plans with other products;
35	amending s. 636.236, F.S.; requiring discount medical plan
36	organizations to maintain surety bonds; providing
37	conditions for substituting deposited securities for
38	surety bonds; amending s. 636.238, F.S.; revising
39	penalties; repealing s. 636.242, F.S., relating to civil
40	remedies; providing an effective date.
41
42	Be It Enacted by the Legislature of the State of Florida:
43
44	Section 1.  Subsection (2) of section 636.202, Florida
45	Statutes, is amended to read:
46	636.202  Definitions.--As used in this part, the term:
47	(2)  "Discount medical plan organization" means an entity
48	which, in exchange for fees, dues, charges, or other
49	consideration, provides access for plan members to providers of
50	medical services and the right to receive medical services from
51	those providers at a discount. The term "discount medical plan"
52	does not include any product regulated under chapter 627,
53	chapter 641, or part I of this chapter.
54	Section 2.  Subsections (1) and (2) of section 636.204,
55	Florida Statutes, are amended to read:
56	636.204  License required.--
57	(1)  Before doing business in this state as a discount
58	medical plan organization, an entity must be a corporation, a
59	limited liability company, or a limited partnership,
60	incorporated, organized, formed, or registered under the laws of
61	this state or authorized to transact business in this state in
62	accordance with chapter 607, chapter 608, chapter 617, chapter
63	620, or chapter 865 incorporated under the laws of this state
64	or, if a foreign corporation, authorized to transact business in
65	this state, and must be licensed by the office possess a license
66	as a discount medical plan organization or be licensed by the
67	office pursuant to chapter 624, part I of chapter 636, or
68	chapter 641 from the office.
69	(2)  An application for a license to operate as a discount
70	medical plan organization must be filed with the office on a
71	form prescribed by the commission. Such application must be
72	sworn to by an officer or authorized representative of the
73	applicant and be accompanied by the following, if applicable:
74	(a)  A copy of the applicant's articles of incorporation or
75	other organizing documents, including all amendments.
76	(b)  A copy of the applicant's corporation's bylaws.
77	(c)  A list of the names, addresses, official positions,
78	and biographical information of the individuals who are
79	responsible for conducting the applicant's affairs, including,
80	but not limited to, all members of the board of directors, board
81	of trustees, executive committee, or other governing board or
82	committee, the officers, contracted management company
83	personnel, and any person or entity owning or having the right
84	to acquire 10 percent or more of the voting securities of the
85	applicant. Such listing must fully disclose the extent and
86	nature of any contracts or arrangements between any individual
87	who is responsible for conducting the applicant's affairs and
88	the discount medical plan organization, including any possible
89	conflicts of interest.
90	(d)  A complete biographical statement, on forms prescribed
91	by the commission, an independent investigation report, and a
92	set of fingerprints, as provided in chapter 624, with respect to
93	each individual identified under paragraph (c).
94	(e)  A statement generally describing the applicant, its
95	facilities and personnel, and the medical services to be
96	offered.
97	(f)  A copy of the form of all contracts made or to be made
98	between the applicant and any providers or provider networks
99	regarding the provision of medical services to members.
100	(g)  A copy of the form of any contract made or arrangement
101	to be made between the applicant and any person listed in
102	paragraph (c).
103	(h)  A copy of the form of any contract made or to be made
104	between the applicant and any person, corporation, partnership,
105	or other entity for the performance on the applicant's behalf of
106	any function, including, but not limited to, marketing,
107	administration, enrollment, investment management, and
108	subcontracting for the provision of health services to members.
109	(i)  A copy of the applicant's most recent financial
110	statements audited by an independent certified public
111	accountant. An applicant that is a subsidiary of a parent entity
112	that is publicly traded and that prepares audited financial
113	statements reflecting the consolidated operations of the parent
114	entity and the subsidiary may petition the office to accept, in
115	lieu of the audited financial statement of the applicant, the
116	audited financial statement of the parent entity and a written
117	guaranty by the parent entity that the minimum capital
118	requirements of the applicant required by this part will be met
119	by the parent entity.
120	(j)  A description of the proposed method of marketing.
121	(k)  A description of the subscriber complaint procedures
122	to be established and maintained.
123	(l)  The fee for issuance of a license.
124	(m)  Such other information as the commission or office may
125	reasonably require to make the determinations required by this
126	part.
127	Section 3.  Section 636.205, Florida Statutes, is created
128	to read:
129	636.205  Issuance of license; denial.--
130	(1)  Following receipt of an application filed pursuant to
131	s. 636.204, the office shall review the application and notify
132	the applicant of any deficiencies contained therein. The office
133	shall issue a license to an applicant who has filed a completed
134	application pursuant to s. 636.204 upon payment of the fees
135	specified in s. 636.204 and upon the office being satisfied that
136	the following conditions are met:
137	(a)  The requirements of s. 636.204 have been fulfilled.
138	(b)  The entity has the required minimum capital
139	requirements.
140	(c)  The ownership, control, and management of the entity
141	are competent and trustworthy and possess managerial experience
142	that would make the proposed operation beneficial to the
143	subscribers. The office shall not grant or continue to grant
144	authority to transact the business of a discount medical plan
145	organization in this state at any time during which the office
146	has good reason to believe that the ownership, control, or
147	management of the organization includes any person whose
148	business operations are or have been marked by business
149	practices or conduct that is detrimental to the public,
150	stockholders, investors, or creditors.
151	(d)  The discount medical plan organization has a complaint
152	procedure that will facilitate the resolution of subscriber
153	grievances and that includes both formal and informal steps
154	available within the organization.
155	(e)  Any deficiencies identified by the office have been
156	corrected.
157	(f)  All requirements of this part have been met.
158	(2)  If the application for a license is denied, the office
159	shall notify the applicant and shall specify the reasons for
160	denial in the notice.
161	Section 4.  Section 636.206, Florida Statutes, is amended
162	to read:
163	636.206  Examinations and investigations.--
164	(1)  The office may examine or investigate the business and
165	affairs of any discount medical plan organization. The office
166	may order any discount medical plan organization or applicant to
167	produce any records, books, files, advertising and solicitation
168	materials, or other information and may take statements under
169	oath to determine whether the discount medical plan organization
170	or applicant is in violation of the law or is acting contrary to
171	the public interest. The expenses incurred in conducting any
172	examination or investigation must be paid by the discount
173	medical plan organization or applicant. Examinations and
174	investigations must be conducted as provided in chapter 624, and
175	discount medical plan organizations are subject to all
176	applicable provisions of the insurance code.
177	(2)  Failure by the discount medical plan organization to
178	pay the expenses incurred under subsection (1) is grounds for
179	denial or revocation.
180	Section 5.  Section 636.207, Florida Statutes, is created
181	to read:
182	636.207  Applicability of part.--Except as otherwise
183	provided in this part, discount medical plan organizations are
184	governed by the provisions of this part and are exempt from the
185	Florida Insurance Code unless specifically referenced.
186	Section 6.  Section 636.208, Florida Statutes, is amended
187	to read:
188	636.208  Fees; charges; reimbursement.--
189	(1)  A discount medical plan organization may charge a
190	periodic charge as well as a reasonable one-time processing fee
191	for a discount medical plan and a periodic charge. If a discount
192	medical plan charges for a time period in excess of 1 month, the
193	plan must, in the event of cancellation of the membership by
194	either party, make a pro rata reimbursement of the fees to the
195	member.
196	(2)  If the member cancels his or her membership in the
197	discount medical plan organization within the first 30 days
198	after the effective date of enrollment in the plan, the member
199	shall receive a reimbursement of all periodic charges upon
200	return of the discount card to the discount medical plan
201	organization.
202	(3)  If the discount medical plan organization cancels a
203	membership for any reason other than nonpayment of fees by the
204	member, the discount medical plan organization shall make a pro
205	rata reimbursement of all periodic charges to the member.
206	(4)  In addition to the reimbursement of periodic charges
207	for the reasons stated in subsections (2) and (3), a discount
208	medical plan organization shall also reimburse the member for
209	any portion of a one-time processing fee that exceeds $30 per
210	year.
211	Section 7.  Paragraphs (a) and (b) of subsection (1) of
212	section 636.210, Florida Statutes, are amended to read:
213	636.210  Prohibited activities of a discount medical plan
214	organization.--
215	(1)  A discount medical plan organization may not:
216	(a)  Use in its advertisements, marketing material,
217	brochures, and discount cards the term "insurance" except as
218	otherwise provided in this part or as a disclaimer of any
219	relationship between discount medical plan organization benefits
220	and insurance;
221	(b)  Use in its advertisements, marketing material,
222	brochures, and discount cards the terms "health plan,"
223	"coverage," "copay," "copayments," "preexisting conditions,"
224	"guaranteed issue," "premium," "enrollment," "PPO," "preferred
225	provider organization," or other terms in a manner that could
226	reasonably mislead a person into believing the discount medical
227	plan was health insurance;
228	Section 8.  Section 636.212, Florida Statutes, is amended
229	to read:
230	636.212  Disclosures.--The following disclosures must be
231	made in writing to any prospective member and must be on the
232	first page of any advertisements, marketing materials, or
233	brochures relating to a discount medical plan. The disclosures
234	must be printed in not less than 12-point type or no smaller
235	than the largest type on the page if larger than 12-point type:
236	(1)  That the plan is not a health insurance policy.
237	(2)  That the plan provides discounts at certain health
238	care providers for medical services.
239	(3)  That the plan does not make payments directly to the
240	providers of medical services.
241	(4)  That the plan member is obligated to pay for all
242	health care services but will receive a discount from those
243	health care providers who have contracted with the discount plan
244	organization.
245	(5)  The corporate name and address the locations of the
246	licensed discount medical plan organization.
247
248	If the initial contract is made by telephone, the disclosures
249	required by this section shall be made orally and provided in
250	the initial written materials that describe the benefits under
251	the discount medical plan provided to the prospective or new
252	member.
253	Section 9.  Subsections (2) and (4) of section 636.214,
254	Florida Statutes, are amended to read:
255	636.214  Provider agreements.--
256	(2)  A provider agreement between a discount medical plan
257	organization and a provider must provide the following:
258	(a)  A list of the services and products to be provided at
259	a discount.
260	(b)  The amount or amounts of the discounts or,
261	alternatively, a fee schedule which reflects the provider's
262	discounted rates.
263	(c)  That the provider will not charge members more than
264	the discounted rates.
265	(4)  The discount medical plan organization shall maintain
266	a copy of each active provider agreement into which it has
267	entered.
268	Section 10.  Subsection (4) of section 636.216, Florida
269	Statutes, is amended to read:
270	636.216  Charge or form filings.--
271	(4)  A charge or form is considered approved on the 60th
272	day after its date of filing unless it has been previously
273	disapproved by the office. The office shall disapprove any form
274	that does not meet the requirements of this part or that is
275	unreasonable, discriminatory, misleading, or unfair. If such
276	filings are disapproved, the office shall notify the discount
277	medical plan organization and shall specify in the notice the
278	reasons for disapproval. The discount medical plan organization
279	has 21 days from the date of receipt of notice to request a
280	hearing before the office pursuant to chapter 120.
281	Section 11.  Subsection (2) of section 636.218, Florida
282	Statutes, is amended to read:
283	636.218  Annual reports.--
284	(2)  Such reports must be on forms prescribed by the
285	commission and must include:
286	(a)  Audited financial statements prepared in accordance
287	with generally accepted accounting principles certified by an
288	independent certified public accountant, including the
289	organization's balance sheet, income statement, and statement of
290	changes in cash flow for the preceding year. An organization
291	that is a subsidiary of a parent entity that is publicly traded
292	and that prepares audited financial statements reflecting the
293	consolidated operations of the parent entity and the
294	organization may petition the office to accept, in lieu of the
295	audited financial statement of the organization, the audited
296	financial statement of the parent entity and a written guaranty
297	by the parent entity that the minimum capital requirements of
298	the organization required by this part will be met by the parent
299	entity.
300	(b)  If different from the initial application or the last
301	annual report, a list of the names and residence addresses of
302	all persons responsible for the conduct of the organization's
303	affairs, together with a disclosure of the extent and nature of
304	any contracts or arrangements between such persons and the
305	discount medical plan organization, including any possible
306	conflicts of interest.
307	(c)  The number of discount medical plan members in the
308	state.
309	(d)  Such other information relating to the performance of
310	the discount medical plan organization as is reasonably required
311	by the commission or office.
312	Section 12.  Section 636.223, Florida Statutes, is created
313	to read:
314	636.223  Administrative penalty.--In lieu of suspending or
315	revoking a certificate of authority whenever any discount
316	medical plan organization has been found to have violated any
317	provision of this part, the office may:
318	(1)  Issue and cause to be served upon the organization
319	charged with the violation a copy of such findings and an order
320	requiring such organization to cease and desist from engaging in
321	the act or practice that constitutes the violation.
322	(2)  Impose a monetary penalty of not less that $100 for
323	each violation, but not to exceed an aggregate penalty of
324	$75,000.
325	Section 13.  Subsection (2) of section 636.228, Florida
326	Statutes, is amended to read:
327	636.228  Marketing of discount medical plans.--
328	(2)  The discount medical plan organization shall have an
329	executed written agreement with a marketer prior to the
330	marketer's marketing, promoting, selling, or distributing the
331	discount medical plan. Such agreement shall prohibit the
332	marketer from using marketing materials, brochures, and discount
333	cards without the approval in writing by the discount medical
334	plan organization. The discount medical plan organization shall
335	be bound by and shall be responsible and financially liable for
336	any acts of its marketers, within the scope of the marketers'
337	agency, that do not comply with the provisions of this part.
338	Section 14.  Section 636.230, Florida Statutes, is amended
339	to read:
340	636.230  Bundling discount medical plans with other
341	insurance products.--When a marketer or discount medical plan
342	organization sells a discount medical plan together with any
343	other product, the fees for the discount medical plan each
344	individual product must be provided in writing to the member if
345	the fees exceed $30 and itemized.
346	Section 15.  Section 636.236, Florida Statutes, is amended
347	to read:
348	636.236  Surety bond or security deposit.--
349	(1)  Each discount medical plan organization licensed
350	pursuant to the provisions of this part must maintain in force a
351	surety bond in its own name in an amount not less than $35,000
352	to be used at the discretion of the office to protect the
353	financial interests of members who may be adversely affected by
354	the insolvency of a discount medical plan organization. The bond
355	must be issued by an insurance company that is licensed to do
356	business in this state.
357	(2)(1)  In lieu of the bond specified in subsection (1), a
358	licensed discount medical plan organization may must deposit and
359	maintain deposited in trust with the department securities
360	eligible for deposit under s. 625.52, having at all times a
361	value of not less than $35,000, for use by the office in
362	protecting plan members. If a licensed discount medical plan
363	organization substitutes its deposited securities under this
364	subsection with a surety bond authorized in subsection (1), such
365	deposited securities shall be returned to the discount medical
366	plan organization no later than 45 days following the effective
367	date of the surety bond.
368	(3)(2)  No judgment creditor or other claimant of a
369	discount medical plan organization, other than the office or
370	department, shall have the right to levy upon any of the assets
371	or securities held in this state as a deposit under subsections
372	subsection (1) and (2).
373	Section 16.  Section 636.238, Florida Statutes, is amended
374	to read:
375	636.238  Penalties for violation of this part.--
376	(1)  Except as provided in subsection (2), a person who
377	willfully violates any provision of this part commits a
378	misdemeanor of the second degree, punishable as provided in s.
379	775.082 or s. 775.083.
380	(2)  A person who operates as or willfully aids and abets
381	another operating as a discount medical plan organization in
382	violation of s. 636.204(1) commits a felony punishable as
383	provided for in s. 624.401(4)(b), as if the unlicensed discount
384	medical plan organization were an unauthorized insurer, and the
385	fees, dues, charges, or other consideration collected from the
386	members by the unlicensed discount medical plan organization or
387	marketer were insurance premium.
388	(3)  A person who collects fees for purported membership in
389	a discount medical plan but purposefully fails to provide the
390	promised benefits commits a theft, punishable as provided in s.
391	812.014.
392	Section 17.  Section 636.242, Florida Statutes, is
393	repealed.
394	Section 18.  This act shall take effect upon becoming a
395	law.

CODING: Words stricken are deletions; words underlined are additions.