Mass. Gen. Laws ch. 176B, sec. 4 — MA Code / Part I / Title XXII / Chapter 176B / Section 4
Contracts for medical, chiropractic, visual, surgical, and other health services; approval, subscription certificates; classification of risks
Status: in_force

Section 4. Any medical service corporation may enter into contracts with its subscribers, and with participating physicians, chiropractors, nurse midwives, optometrists, dentists, podiatrists, psychologists, licensed independent clinical social workers, certified clinical specialist in psychiatric and mental health nursing and other providers of health services licensed under the laws of the commonwealth for such medical, chiropractic, visual, surgical, midwifery, mental health and other health services as may lawfully be rendered by them to subscribers and their dependents and shall make payment for such services either, or directly to participating providers or to nonparticipating providers if the subscriber is covered by a Preferred Provider Organization, as provided for in this chapter. The form of any and all agreements with such participating physicians, chiropractors, nurse midwives, optometrists, dentists, podiatrists, psychologists, licensed independent clinical social workers, certified clinical specialist in psychiatric and mental health nursing and other providers of health services shall at all times be subject to the written approval of the commissioner, but no participating provider shall be denied the right to enter into any agreement with any medical service corporation by reason of any unfair or arbitrary discrimination. The methods of compensating such physicians, chiropractors, nurse midwives, optometrists, dentists, podiatrists, psychologists, licensed independent clinical social workers, certified clinical specialist in psychiatric and mental health nursing and other providers of health services for their services to subscribers, or covered dependents shall at all times be subject to the written approval of the commissioner. A contract between a medical service corporation and a provider of home health services or a licensed hospice agency shall not require the participating home health provider or participating licensed hospice agency to be accredited by the Joint Commission on Accreditation of Healthcare Organizations or other national accrediting body if the agency is certified for participation in the Medicare program, Title XVIII of the federal Social Security Act, 42 U.S.C. Sections 1395 et seq. Any agreement between a medical service corporation and a person whereby such corporation undertakes to furnish benefits for medical service to said person and his covered dependents, if any, shall be considered a non-group medical service agreement. No such agreement shall be approved if he finds that the benefits provided therein are unreasonable in relation to the rate charged, nor if the rates charged are excessive, inadequate or unfairly discriminatory. For the purposes of the review of rates of payment under this section, whether an agreement is not excessive shall include considerations of affordability for consumers and purchasers of health insurance products; provided, however, that such review shall adhere to principles of solvency and actuarial soundness. Nongroup agreements, except contracts providing supplemental coverage to medicare or other governmental programs that are subject to the provisions of chapter one hundred and seventy-six K, shall be subject to the provisions of chapter one hundred and seventy-six M and any regulations promulgated thereunder. Any such corporation shall make available each type of medicare supplemental coverage allowed by the commissioner of insurance to any resident of the commonwealth whose coverage under a medicare program offered by a health maintenance organization licensed under chapter one hundred and seventy-six G has been cancelled because the health maintenance organization's contract with medicare has been terminated. Such coverage shall be offered without any waiting periods or exclusions for pre-existing conditions and shall become effective on the date that the coverage is cancelled. Any agreement between a medical service corporation and a group of two or more persons or with the employer, employers or other representatives of such group whereby the medical service corporation undertakes to furnish benefits for medical service to said persons and to their covered dependents, if any, shall be considered a group medical service agreement; provided, however, that eligible persons in a group who are enrollees under a group health maintenance contract, as defined in section one of chapter one hundred and seventy-six G, shall be included for purposes of determining the number of persons within a group having a medical service agreement. Under such a group medical service agreement, subscription certificates and the rates charged by the corporation to the subscribers shall be filed with the commissioner within thirty days after their effective date, and shall be subject to subsequent disapproval by the commissioner if he finds that the benefits provided therein are unreasonable in relation to the rate charged, or that the rates charged are excessive, inadequate or unfairly discriminatory; and provided that group plan contracts issued and rates charged by a nonprofit medical service corporation to its subscribers providing supplemental coverage to medicare shall be subject to the provisions of chapter one hundred and seventy-six K if the subscribers, and not their employer, employers or representatives, are billed directly for such contracts. No classification of risk may be established on the basis of age. In disapproving any rate under this section, the commissioner shall make a finding on the basis of information submitted by a medical service corporation, that such corporation employs a utilization review program and other techniques acceptable to him which have had or are expected to have a demonstrated impact on the prevention of reimbursement by such corporation for services which are not medically necessary. The commissioner may make and, at any time, alter or amend, reasonable rules or regulations to facilitate the operation and enforcement of this section and to govern hearings and investigations thereunder. He may issue such orders as he finds proper, expedient or necessary to enforce and administer the provisions of this section and to secure compliance with any rules and regulations made thereunder. The open enrollment period and coverage effective date for any group medical service plan contract providing supplemental coverage to medicare shall be the same as the open enrollment period of all other group health plan options offered by the employer, representative or group sponsor to the group's members who are eligible for medicare supplemental coverage. Nothing in this section shall be construed to prohibit as unreasonable or unfairly discriminatory the establishment of classifications or modifications of classifications of risks based upon size, expense, management, individual experience, purpose, location or dispersion of hazard or any other reasonable considerations, or to prohibit retrospective refunds. Acquisition costs in connection with the solicitation of subscribers and costs of administration shall at all times be limited to such amounts as the commissioner shall approve. To the extent that this section is inconsistent with the provisions of chapter one hundred and seventy-six K, and any regulations promulgated thereunder, medicare supplement insurance and medicare select insurance plans as defined in said chapter one hundred and seventy-six K shall be subject to the provisions of said chapter one hundred and seventy-six K. To the extent that this section is inconsistent with the provisions of chapter one hundred and seventy-six M and any regulations promulgated thereunder, any nongroup plan that is within the definition of a guaranteed issue health plan in said chapter one hundred and seventy-six M shall be subject to the provisions of said chapter one hundred and seventy-six M and any regulations promulgated thereunder.

Section 4. Any medical service corporation may enter into contracts with its subscribers, and with participating physicians, chiropractors, nurse midwives, optometrists, dentists, podiatrists, psychologists, licensed independent clinical social workers, certified clinical specialist in psychiatric and mental health nursing and other providers of health services licensed under the laws of the commonwealth for such medical, chiropractic, visual, surgical, midwifery, mental health and other health services as may lawfully be rendered by them to subscribers and their dependents and shall make payment for such services either, or directly to participating providers or to nonparticipating providers if the subscriber is covered by a Preferred Provider Organization, as provided for in this chapter. The form of any and all agreements with such participating physicians, chiropractors, nurse midwives, optometrists, dentists, podiatrists, psychologists, licensed independent clinical social workers, certified clinical specialist in psychiatric and mental health nursing and other providers of health services shall at all times be subject to the written approval of the commissioner, but no participating provider shall be denied the right to enter into any agreement with any medical service corporation by reason of any unfair or arbitrary discrimination. The methods of compensating such physicians, chiropractors, nurse midwives, optometrists, dentists, podiatrists, psychologists, licensed independent clinical social workers, certified clinical specialist in psychiatric and mental health nursing and other providers of health services for their services to subscribers, or covered dependents shall at all times be subject to the written approval of the commissioner. A contract between a medical service corporation and a provider of home health services or a licensed hospice agency shall not require the participating home health provider or participating licensed hospice agency to be accredited by the Joint Commission on Accreditation of Healthcare Organizations or other national accrediting body if the agency is certified for participation in the Medicare program, Title XVIII of the federal Social Security Act, 42 U.S.C. Sections 1395 et seq.

Any agreement between a medical service corporation and a person whereby such corporation undertakes to furnish benefits for medical service to said person and his covered dependents, if any, shall be considered a non-group medical service agreement. No such agreement shall be approved if he finds that the benefits provided therein are unreasonable in relation to the rate charged, nor if the rates charged are excessive, inadequate or unfairly discriminatory. For the purposes of the review of rates of payment under this section, whether an agreement is not excessive shall include considerations of affordability for consumers and purchasers of health insurance products; provided, however, that such review shall adhere to principles of solvency and actuarial soundness. Nongroup agreements, except contracts providing supplemental coverage to medicare or other governmental programs that are subject to the provisions of chapter one hundred and seventy-six K, shall be subject to the provisions of chapter one hundred and seventy-six M and any regulations promulgated thereunder.

Any such corporation shall make available each type of medicare supplemental coverage allowed by the commissioner of insurance to any resident of the commonwealth whose coverage under a medicare program offered by a health maintenance organization licensed under chapter one hundred and seventy-six G has been cancelled because the health maintenance organization's contract with medicare has been terminated. Such coverage shall be offered without any waiting periods or exclusions for pre-existing conditions and shall become effective on the date that the coverage is cancelled.

Any agreement between a medical service corporation and a group of two or more persons or with the employer, employers or other representatives of such group whereby the medical service corporation undertakes to furnish benefits for medical service to said persons and to their covered dependents, if any, shall be considered a group medical service agreement; provided, however, that eligible persons in a group who are enrollees under a group health maintenance contract, as defined in section one of chapter one hundred and seventy-six G, shall be included for purposes of determining the number of persons within a group having a medical service agreement.

Under such a group medical service agreement, subscription certificates and the rates charged by the corporation to the subscribers shall be filed with the commissioner within thirty days after their effective date, and shall be subject to subsequent disapproval by the commissioner if he finds that the benefits provided therein are unreasonable in relation to the rate charged, or that the rates charged are excessive, inadequate or unfairly discriminatory; and provided that group plan contracts issued and rates charged by a nonprofit medical service corporation to its subscribers providing supplemental coverage to medicare shall be subject to the provisions of chapter one hundred and seventy-six K if the subscribers, and not their employer, employers or representatives, are billed directly for such contracts. No classification of risk may be established on the basis of age. In disapproving any rate under this section, the commissioner shall make a finding on the basis of information submitted by a medical service corporation, that such corporation employs a utilization review program and other techniques acceptable to him which have had or are expected to have a demonstrated impact on the prevention of reimbursement by such corporation for services which are not medically necessary. The commissioner may make and, at any time, alter or amend, reasonable rules or regulations to facilitate the operation and enforcement of this section and to govern hearings and investigations thereunder. He may issue such orders as he finds proper, expedient or necessary to enforce and administer the provisions of this section and to secure compliance with any rules and regulations made thereunder.

The open enrollment period and coverage effective date for any group medical service plan contract providing supplemental coverage to medicare shall be the same as the open enrollment period of all other group health plan options offered by the employer, representative or group sponsor to the group's members who are eligible for medicare supplemental coverage.

Nothing in this section shall be construed to prohibit as unreasonable or unfairly discriminatory the establishment of classifications or modifications of classifications of risks based upon size, expense, management, individual experience, purpose, location or dispersion of hazard or any other reasonable considerations, or to prohibit retrospective refunds. Acquisition costs in connection with the solicitation of subscribers and costs of administration shall at all times be limited to such amounts as the commissioner shall approve.

To the extent that this section is inconsistent with the provisions of chapter one hundred and seventy-six K, and any regulations promulgated thereunder, medicare supplement insurance and medicare select insurance plans as defined in said chapter one hundred and seventy-six K shall be subject to the provisions of said chapter one hundred and seventy-six K.

To the extent that this section is inconsistent with the provisions of chapter one hundred and seventy-six M and any regulations promulgated thereunder, any nongroup plan that is within the definition of a guaranteed issue health plan in said chapter one hundred and seventy-six M shall be subject to the provisions of said chapter one hundred and seventy-six M and any regulations promulgated thereunder.