RELATES TO:
KRS
304.12-010,
304.18-040,
304.32-080
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
304.2-110 and
KRS
304.32-250 provide that the commissioner may
make reasonable administrative regulations necessary for or as an aid to the
effectuation of any provision of the Kentucky Insurance Code. This
administrative regulation establishes guidelines for the use of preferred
provider arrangements for group health insurers.
Section 1. Definitions.
(1) "Alternative delivery system" means a
health care delivery system characterized by alliances between selected health
care providers and insurers, employers, or both, managed care through greater
utilization controls, or discounted fee or capitation payment arrangements with
health care providers, as distinguished from the traditional fee-for-service
delivery approach.
(2) "Exclusive
provider arrangement" means an alternative delivery system in which an insurer
contracts with health care providers for alternative rates of payment and
requires insureds or subscribers to use the health care providers under
contract with the insurer.
(3)
"Insurer" is defined by
KRS
304.17A-005(27).
(4) "Preferred provider arrangement" means an
alternative delivery system under which an insurer contracts with health care
providers for alternative rates of payment and allows insureds or subscribers
to choose between contract health care providers and noncontract health care
providers.
Section 2.
Contract Guidelines. Insurers shall not:
(1)
Issue contracts of insurance offering any preferred provider arrangement under
which the difference between the benefit payable for services rendered by
noncontract health care providers and the benefit payable for services rendered
by contract health care providers exceeds twenty-five (25) percent;
or
(2) Issue contracts of insurance
offering any exclusive provider arrangement.
Section 3. Exception. Section 2 of this
administrative regulation shall not apply to health maintenance organizations,
limited health service organizations, and non-profit hospital,
medical-surgical, dental, and health service corporations.
