CHAPTER 700c
HEALTH INSURANCE

PART I
HEALTH INSURANCE: IN GENERAL

      Sec. 38a-476. Preexisting condition coverage. (a)(1) For the purposes of this section, "health insurance plan" means any hospital and medical expense incurred policy, hospital or medical service plan contract and health care center subscriber contract and does not include (A) short-term health insurance issued on a nonrenewable basis with a duration of six months or less, accident only, credit, dental, vision, Medicare supplement, long-term care or disability insurance, hospital indemnity coverage, coverage issued as a supplement to liability insurance, insurance arising out of a workers' compensation or similar law, automobile medical payments insurance, or insurance under which beneficiaries are payable without regard to fault and which is statutorily required to be contained in any liability insurance policy or equivalent self-insurance, or (B) policies of specified disease or limited benefit health insurance, provided that the carrier offering such policies files on or before March first of each year a certification with the Insurance Commissioner that contains the following: (i) A statement from the carrier certifying that such policies are being offered and marketed as supplemental health insurance and not as a substitute for hospital or medical expense insurance; (ii) a summary description of each such policy including the average annual premium rates, or range of premium rates in cases where premiums vary by age, gender or other factors, charged for such policies in the state; and (iii) in the case of a policy that is described in this subparagraph and that is offered for the first time in this state on or after October 1, 1993, the carrier files with the commissioner the information and statement required in this subparagraph at least thirty days prior to the date such policy is issued or delivered in this state.

      (2) "Insurance arrangement" means any "multiple employer welfare arrangement", as defined in Section 3 of the Employee Retirement Income Security Act of 1974 (ERISA), as amended, except for any such arrangement which is fully insured within the meaning of Section 514(b)(6) of said act, as amended.

      (3) "Preexisting conditions provision" means a policy provision which limits or excludes benefits relating to a condition based on the fact that the condition was present before the effective date of coverage, for which any medical advice, diagnosis, care or treatment was recommended or received before such effective date. Routine follow-up care to determine whether a breast cancer has reoccurred in a person who has been previously determined to be breast cancer free shall not be considered as medical advice, diagnosis, care or treatment for purposes of this section unless evidence of breast cancer is found during or as a result of such follow-up. Genetic information shall not be treated as a condition in the absence of a diagnosis of the condition related to such information. Pregnancy shall not be considered a preexisting condition.

      (4) "Qualifying coverage" means (A) any group health insurance plan, insurance arrangement or self-insured plan, (B) Medicare or Medicaid, or (C) an individual health insurance plan that provides benefits which are actuarially equivalent to or exceeding the benefits provided under the small employer health care plan, as defined in subdivision (12) of section 38a-564, whether issued in this state or any other state.

      (5) "Applicable waiting period" means the period of time imposed by the group policyholder or contractholder before an individual is eligible for participating in the group policy or contract.

      (b) (1) No group health insurance plan or insurance arrangement may impose a preexisting conditions provision which excludes coverage for a period beyond twelve months following the insured's effective date of coverage. Any preexisting conditions provision may only relate to conditions, whether physical or mental, for which medical advice, diagnosis or care or treatment was recommended or received during the six months immediately preceding the effective date of coverage.

      (2) No individual health insurance plan or insurance arrangement may impose a preexisting conditions provision which excludes coverage beyond twelve months following the insured's effective date of coverage. Any preexisting conditions provision may only relate to conditions, whether physical or mental, for which medical advice, diagnosis or care or treatment was recommended or received during the twelve months immediately preceding the effective date of coverage.

      (c) All health insurance plans and insurance arrangements shall provide coverage, under the terms and conditions of their policies or contracts, for the preexisting conditions of any newly insured individual who was previously covered for such preexisting condition under the terms of the individual's preceding qualifying coverage, provided the preceding coverage was continuous to a date less than one hundred twenty days prior to the effective date of the new coverage, exclusive of any applicable waiting period, except in the case of a newly insured group member whose previous coverage was terminated due to an involuntary loss of employment, the preceding coverage must have been continuous to a date not more than one hundred fifty days prior to the effective date of the new coverage, exclusive of any applicable waiting period, provided such newly insured group member or dependent applies for such succeeding coverage within thirty days of the member's or dependent's initial eligibility.

      (d) With respect to a newly insured individual who was previously covered under qualifying coverage, but who was not covered under such qualifying coverage for a preexisting condition, as defined under the new health insurance plan or arrangement, such plan or arrangement shall credit the time such individual was previously covered by qualifying coverage to the exclusion period of the preexisting condition provision, provided the preceding coverage was continuous to a date less than one hundred twenty days prior to the effective date of the new coverage, exclusive of any applicable waiting period under such plan, except in the case of a newly insured group member whose preceding coverage was terminated due to an involuntary loss of employment, the preceding coverage must have been continuous to a date not more than one hundred fifty days prior to the effective date of the new coverage, exclusive of any applicable waiting period, provided such newly insured group member or dependent applies for such succeeding coverage within thirty days of the member's or dependent's initial eligibility.

      (e) Each insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center which issues in this state group health insurance subject to Section 2701 of the Public Health Service Act, as set forth in the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) (HIPAA), as amended from time to time, shall comply with the provisions of said section with respect to such group health insurance, except that the longer period of days specified in subsections (c) and (d) of this section shall apply to the extent excepted from preemption in Section 2723(B)(2)(iii) of said Public Health Service Act.

      (f) The provisions of this section shall apply to every health insurance plan or insurance arrangement issued, renewed or continued in this state on or after October 1, 1993. For purposes of this section, the date a plan or arrangement is continued shall be the anniversary date of the issuance of the plan or arrangement. The provisions of subsection (e) of this section shall apply on and after the dates specified in Sections 2747 and 2792 of the Public Health Service Act as set forth in HIPAA.

      (g) Notwithstanding the provisions of subsection (a) of this section, a short-term health insurance policy issued on a nonrenewable basis for six months or less which imposes a preexisting conditions provision shall be subject to the following conditions: (1) No such preexisting conditions provision shall exclude coverage beyond twelve months following the insured's effective date of coverage; (2) such preexisting conditions provision may only relate to conditions, whether physical or mental, for which medical advice, diagnosis, care or treatment was recommended or received during the twenty-four months immediately preceding the effective date of coverage; and (3) any policy, application or sales brochure issued for such short-term health insurance policy that imposes such preexisting conditions provision shall disclose in a conspicuous manner in not less than fourteen-point bold face type the following statement:

      "THIS POLICY EXCLUDES COVERAGE FOR CONDITIONS FOR WHICH MEDICAL ADVICE, DIAGNOSIS, CARE OR TREATMENT WAS RECOMMENDED OR RECEIVED DURING THE TWENTY-FOUR MONTHS IMMEDIATELY PRECEDING THE EFFECTIVE DATE OF COVERAGE."

In the event an insurer or health care center issues two consecutive short-term health insurance policies on a nonrenewable basis for six months or less which imposes a preexisting conditions provision to the same individual, the insurer or health care center shall reduce the preexisting conditions exclusion period in the second policy by the period of time such individual was covered under the first policy. If the same insurer or health care center issues a third or subsequent such short-term health insurance policy to the same individual, such insurer or health care center shall reduce the preexisting conditions exclusion period in the third or subsequent policy by the cumulative time covered under the prior policies. Nothing in this section shall be construed to require such short-term health insurance policy to be issued on a guaranteed issue or guaranteed renewable basis.

      (h) The commissioner may adopt regulations, in accordance with the provisions of chapter 54, to enforce the provisions of HIPAA and this section concerning preexisting conditions and portability.

      (P.A. 93-345, S. 3; P.A. 96-87, S. 1-3; 96-177, S. 5; June 18 Sp. Sess. P.A. 97-8, S. 65, 88; P.A. 98-27, S. 14; P.A. 00-121; P.A. 02-24, S. 5; P.A. 07-113, S. 3.)

      History: P.A. 96-87 amended Subsec. (a) and added Subsec. (f) to exempt "short-term" policies which provide the prescribed disclosures, effective May 8, 1996; P.A. 96-177 redefined "preexisting conditions provision" to specify that breast cancer check-ups are not medical advice, diagnosis, care or treatment unless evidence of breast cancer is found; June 18 Sp. Sess. P.A. 97-8 redefined "preexisting conditions provision" in Subsec. (a), amended Subsec. (b) to delete references to pregnancy, to substitute "whether physical or mental" for "manifesting themselves or" in Subdiv. (1) and to substitute "whether physical or mental, which manifest themselves" for "manifesting themselves" in Subdiv. (2), amended Subsecs. (c) and (d) to substitute "less than sixty-three days" for "not more than thirty days" and to substitute "sixty-three days" for "thirty days", added new Subsec. (e) re compliance with the Public Health Service Act, designated former Subsecs. (e) and (f) as Subsecs. (f) and (g) respectively, amending new Subsec. (f) re application dates of Subsec. (e), and added new Subsec. (h) re regulations to enforce HIPAA, effective July 1, 1997; P.A. 98-27 amended Subsec. (d) to substitute "time such individual" for "time such person" and substituted "such individual's initial eligibility" for "their initial eligibility"; P.A. 00-121 amended Subsecs. (c) and (d) by amending time periods from 63 to 120 days and 90 to 150 days, amending application deadline from 63 to 30 days, and making technical changes for purposes of gender neutrality; P.A. 02-24 substituted "their" for "its" in Subsec. (c); P.A. 07-113 amended Subsec. (b)(2) to delete reference to conditions "which manifest themselves", amended Subsec. (g) to require a short-term health insurance policy which imposes preexisting conditions provision to be subject to conditions, including a requirement for disclosure of a statement re exclusion of coverage under the policy in a conspicuous manner, to provide for a reduction in preexisting conditions exclusion period in the second, third or subsequent policy if an insurer or health care center issues two, three or more consecutive short-term health insurance policies with preexisting conditions provision to the same individual, and to require that nothing in section be construed to require short-term health insurance policy to be issued on a guaranteed issue or guaranteed renewable basis, and amended Subsec. (h) to authorize commissioner to adopt regulations to enforce provisions of section.

      Sec. 38a-477b. Postclaims underwriting prohibited unless approval granted. Application for approval of rescission, cancellation or limitation. Decision. Appeals. Regulations. (a) Unless approval is granted pursuant to subsection (b) of this section, no insurer or health care center may rescind, cancel or limit any policy of insurance, contract, evidence of coverage or certificate that provides coverage of the type specified in subdivisions (1), (2), (4), (6), (10), (11) and (12) of section 38a-469 on the basis of written information submitted on, with or omitted from an insurance application by the insured if the insurer or health care center failed to complete medical underwriting and resolve all reasonable medical questions related to the written information submitted on, with or omitted from the insurance application before issuing the policy, contract, evidence of coverage or certificate. No insurer or health care center may rescind, cancel or limit any such policy, contract, evidence of coverage or certificate more than two years after the effective date of the policy, contract, evidence of coverage or certificate.

      (b) An insurer or health care center shall apply for approval of such rescission, cancellation or limitation by submitting such written information to the Insurance Commissioner on an application in such form as the commissioner prescribes. Such insurer or health care center shall provide a copy of the application for such approval to the insured or the insured's representative. Not later than seven business days after receipt of the application for such approval, the insured or the insured's representative shall have an opportunity to review such application and respond and submit relevant information to the commissioner with respect to such application. Not later than fifteen business days after the submission of information by the insured or the insured's representative, the commissioner shall issue a written decision on such application. The commissioner may approve such rescission, cancellation or limitation if the commissioner finds that (1) the written information submitted on or with the insurance application was false at the time such application was made and the insured or such insured's representative knew or should have known of the falsity therein, and such submission materially affects the risk or the hazard assumed by the insurer or health care center, or (2) the information omitted from the insurance application was knowingly omitted by the insured or such insured's representative, or the insured or such insured's representative should have known of such omission, and such omission materially affects the risk or the hazard assumed by the insurer or health care center. Such decision shall be mailed to the insured, the insured's representative, if any, and the insurer or health care center.

      (c) Notwithstanding the provisions of chapter 54, any insurer or insured aggrieved by any decision by the commissioner under subsection (b) of this section may, within thirty days after notice of the commissioner's decision is mailed to such insurer and insured, take an appeal therefrom to the superior court for the judicial district of Hartford, which shall be accompanied by a citation to the commissioner to appear before said court. Such citation shall be signed by the same authority, and such appeal shall be returnable at the same time and served and returned in the same manner, as is required in case of a summons in a civil action. Said court may grant such relief as may be equitable.

      (d) The Insurance Commissioner may adopt regulations, in accordance with chapter 54, to implement the provisions of this section.

      (P.A. 07-113, S. 1.)

PART Ia
HEALTH INSURANCE: MANAGED CARE

      Sec. 38a-478d. List of providers required. Notification to enrollee of removal from list of enrollee's primary care physician. For any contract delivered, issued for delivery, renewed, amended or continued in this state on or after October 1, 1997, each managed care organization shall provide: (1) Annually to each enrollee a listing of all providers available under the provisions of the enrollee's enrollment agreement, in writing or through the Internet at the option of the enrollee; and (2) notification, as soon as possible, to each enrollee in a managed care plan that requires the selection of a primary care physician upon the termination or withdrawal of the enrollee's primary care physician.

      (P.A. 97-99, S. 5; P.A. 07-18, S. 1.)

      History: P.A. 07-18 amended Subdiv. (1) to require that list of providers be given in writing or through the Internet at the option of enrollee and amended Subdiv. (2) to limit notification to enrollee in a managed care plan that requires selection of a primary care physician.

      Sec. 38a-478l. Consumer report card required. Content. (a) Not later than March 15, 1999, and annually thereafter, the Insurance Commissioner, after consultation with the Commissioner of Public Health, shall develop and distribute a consumer report card on all managed care organizations. The commissioner shall develop the consumer report card in a manner permitting consumer comparison across organizations.

      (b) The consumer report card shall include (1) all health care centers licensed pursuant to chapter 698a, (2) the fifteen largest licensed health insurers that use provider networks and that are not included in subdivision (1) of this subsection, and (3) information concerning mental health services, as specified in subsection (c) of this section. The insurers selected pursuant to subdivision (2) of this subsection shall be selected on the basis of Connecticut direct written health premiums from such network plans.

      (c) With respect to mental health services, the consumer report card shall include information or measures with respect to the percentage of enrollees receiving mental health services, utilization of mental health and chemical dependence services, inpatient and outpatient admissions, discharge rates and average lengths of stay. Such data shall be collected in a manner consistent with the National Committee for Quality Assurance Health Plan Employer Data and Information Set (HEDIS) measures.

      (d) The commissioner shall test market a draft of the consumer report card prior to its publication and distribution. As a result of such test marketing, the commissioner may make any necessary modification to its form or substance.

      (P.A. 97-99, S. 13; P.A. 06-188, S. 34; P.A. 07-217, S. 156.)

      History: P.A. 06-188 added Subsec. (b)(3) re information concerning mental health services specified in new Subsec. (c), added new Subsec. (c) to require inclusion of specific mental health related information in consumer report card and redesignated existing Subsec. (c) as Subsec. (d); P.A. 07-217 made a technical change in Subsec. (c), effective July 12, 2007.

      Sec. 38a-478n. Exhaustion of internal appeal mechanisms. External appeal to commissioner. Applicability to health insurers, managed care organizations and utilization review companies. Fees. Waiver and refund of fees. Request for information. Public education outreach program. (a) Any enrollee, or any provider acting on behalf of an enrollee with the enrollee's consent, who has exhausted the internal mechanisms provided by a managed care organization, health insurer or utilization review company to appeal the denial of a claim based on medical necessity or a determination not to certify an admission, service, procedure or extension of stay, regardless of whether such determination was made before, during or after the admission, service, procedure or extension of stay, may appeal such denial or determination to the commissioner. As used in this section and section 38a-478m, "health insurer" means any entity, other than a managed care organization, which delivers, issues for delivery, renews or amends an individual or group health plan in this state, "health plan" means a plan of health insurance providing coverage of the type specified in subdivision (1), (2), (4), (10), (11), (12) and (13) of section 38a-469, but does not include a managed care plan offered by a managed care organization, and "enrollee" means a person who has contracted for or who participates in a managed care plan or health plan for himself or his eligible dependents.

      (b) (1) To appeal a denial or determination pursuant to this section an enrollee or any provider acting on behalf of an enrollee shall, not later than sixty days after receiving final written notice of the denial or determination from the enrollee's managed care organization, health insurer or utilization review company, file a written request with the commissioner. The appeal shall be on forms prescribed by the commissioner and shall include the filing fee set forth in subdivision (2) of this subsection and a general release executed by the enrollee for all medical records pertinent to the appeal. The managed care organization, health insurer or utilization review company named in the appeal shall also pay to the commissioner the filing fee set forth in subdivision (2) of this subsection. If the Insurance Commissioner receives three or more appeals of denials or determinations by the same managed care organization or utilization review company with respect to the same procedural or diagnostic coding, the Insurance Commissioner may, on said commissioner's own motion, issue an order specifying how such managed care organization or utilization review company shall make determinations about such procedural or diagnostic coding.

      (2) The filing fee shall be twenty-five dollars and shall be deposited in the Insurance Fund established in section 38a-52a. If the commissioner finds that an enrollee is indigent or unable to pay the fee, the commissioner shall waive the enrollee's fee. The commissioner shall refund any paid filing fee to (A) the managed care organization, health insurer or utilization review company if the appeal is not accepted for full review, or (B) the prevailing party upon completion of a full review pursuant to this section.

      (3) Upon receipt of the appeal together with the executed release and appropriate fee, the commissioner shall assign the appeal for review to an entity as defined in subsection (c) of this section.

      (4) Upon receipt of the request for appeal from the commissioner, the entity conducting the appeal shall conduct a preliminary review of the appeal and accept the appeal if such entity determines: (A) The individual was or is an enrollee of the managed care organization or health insurer; (B) the benefit or service that is the subject of the complaint or appeal reasonably appears to be a covered service, benefit or service under the agreement provided by contract to the enrollee; (C) the enrollee has exhausted all internal appeal mechanisms provided; (D) the enrollee has provided all information required by the commissioner to make a preliminary determination including the appeal form, a copy of the final decision of denial and a fully-executed release to obtain any necessary medical records from the managed care organization or health insurer and any other relevant provider.

      (5) Upon completion of the preliminary review, the entity conducting such review shall immediately notify the member or provider, as applicable, in writing as to whether the appeal has been accepted for full review and, if not so accepted, the reasons why the appeal was not accepted for full review.

      (6) If accepted for full review, the entity shall conduct such review in accordance with the regulations adopted by the commissioner, after consultation with the Commissioner of Public Health, in accordance with the provisions of chapter 54.

      (c) To provide for such appeal the Insurance Commissioner, after consultation with the Commissioner of Public Health, shall engage impartial health entities to provide for medical review under the provisions of this section. Such review entities shall include (1) medical peer review organizations, (2) independent utilization review companies, provided any such organizations or companies are not related to or associated with any managed care organization or health insurer, and (3) nationally recognized health experts or institutions approved by the commissioner.

      (d) (1) Not later than five business days after receiving a written request from the commissioner, enrollee or any provider acting on behalf of an enrollee with the enrollee's consent, a managed care organization or health insurer whose enrollee is the subject of an appeal shall provide to the commissioner, enrollee or any provider acting on behalf of an enrollee with the enrollee's consent, written verification of whether the enrollee's plan is fully insured, self-funded, or otherwise funded. If the plan is a fully insured plan or a self-insured governmental plan, the managed care organization or health insurer shall send: (A) Written certification to the commissioner or reviewing entity, as determined by the commissioner, that the benefit or service subject to the appeal is a covered benefit or service; (B) a copy of the entire policy or contract between the enrollee and the managed care organization or health insurer, except that with respect to a self-insured governmental plan, (i) the managed care organization or health insurer shall notify the plan sponsor, and (ii) the plan sponsor shall send, or require the managed care organization or health insurer to send, such copy; or (C) written certification that the policy or contract is accessible to the review entity electronically and clear and simple instructions on how to electronically access the policy or contract.

      (2) Failure of the managed care organization or health insurer to provide information or notify the plan sponsor in accordance with subdivision (1) of this subsection within said five-business-day period or before the expiration of the sixty-day period for appeals set forth in subdivision (1) of subsection (b) of this section, whichever is later as determined by the commissioner, shall (A) create a presumption on the review entity, solely for purposes of accepting an appeal and conducting the review pursuant to subdivision (4) of subsection (b) of this section, that the benefit or service is a covered benefit under the applicable policy or contract, except that such presumption shall not be construed as creating or authorizing benefits or services in excess of those that are provided for in the enrollee's policy or contract, and (B) entitle the commissioner to require the managed care organization or health insurer from whom the enrollee is appealing a medical necessity determination to reimburse the department for the expenses related to the appeal, including, but not limited to, expenses incurred by the review entity.

      (e) The commissioner shall accept the decision of the review entity and the decision of the commissioner shall be binding.

      (f) Not later than January 1, 2000, the Insurance Commissioner shall develop a comprehensive public education outreach program to educate health insurance consumers of the existence of the appeals procedure established in this section. The program shall maximize public information concerning the appeals procedure and shall include, but not be limited to: (1) The dissemination of information through mass media, interactive approaches and written materials; (2) involvement of community-based organizations in developing messages and in devising and implementing education strategies; and (3) periodic evaluations of the effectiveness of educational efforts. The Healthcare Advocate shall coordinate the outreach program and oversee the education process.

      (P.A. 97-99, S. 20; June 18 Sp. Sess. P.A. 97-8, S. 60, 88; P.A. 99-284, S. 14, 60; P.A. 03-278, S. 94; P.A. 04-157, S. 1; P.A. 05-29, S. 1; 05-94, S. 3; 05-102, S. 1, 5; P.A. 06-54, S. 4; P.A. 07-75, S. 3.)

      History: June 18 Sp. Sess. P.A. 97-8 amended Subsec. (b)(2) to require that the fee be deposited in the Insurance Fund, effective July 1, 1997; P.A. 99-284, which was added editorially by the Revisors as Subsec. (e), required the commissioner to develop a public education outreach program and required the ombudsman to coordinate the program and oversee the education process, effective July 7, 1999; P.A. 03-278 made a technical change in Subsec. (b)(2), effective July 9, 2003; P.A. 04-157 amended Subsec. (a) to include appeals for "the denial of a claim based on medical necessity" and add "regardless of whether such determination was made before, during or after the admission, service, procedure or extension of stay", amended Subsec. (b)(1) to require managed care organization or utilization review company named in the appeal to pay filing fee, amended Subsec. (b)(2) to require commissioner to refund any paid filing fee if the appeal is not accepted or upon completion of full review, inserted new Subsec. (d) re written request for information and failure to provide information or notify the plan sponsor, redesignated existing Subsecs. (d) and (e) as new Subsecs. (e) and (f), respectively, and made conforming and technical changes; P.A. 05-29 amended Subsec. (d)(1)(C)to add "or contract"; P.A. 05-94 amended Subsec. (a) to define "health insurer", "health plan" and "enrollee", referenced health insurers throughout, and amended Subsec. (d) to change "managed care plan" to "plan", reference "or contract" and delete references to "self-insured governmental plan" and notice to and from "plan sponsor", effective July 1, 2005; P.A. 05-102 amended Subsec. (b)(1) by authorizing commissioner to issue order with respect to multiple appeals of same procedural or diagnostic coding and amended Subsec. (f) by renaming the Managed Care Ombudsman the Healthcare Advocate; P.A. 06-54 amended Subsec. (d)(1) to require managed care organization or health insurer to send commissioner written certifications and a copy of entire policy or contract between enrollee and such organization or insurer if plan is a self-insured governmental plan, but with respect to sending such copy, organization or insurer shall notify plan sponsor who shall send or require such organization or insurer to send such copy, and amended Subsec. (d)(2) to provide that failure of managed care organization or health insurer to notify plan sponsor within five-business-day period or before thirty-day appeal period ends, whichever is later as determined by commissioner, shall have consequences specified in Subparas. (A) and (B) of said Subdiv., effective May 8, 2006; P.A. 07-75 amended Subsecs. (b)(1) and (d)(2) to extend the time to file an appeal with commissioner from 30 to 60 days, effective May 30, 2007.

      Sec. 38a-479. Definitions. Contracting health organizations to establish procedure allowing physicians to view fee schedules. Fee information to be confidential. (a) As used in this section: (1) "Contracting health organization" means (A) a managed care organization, as defined in section 38a-478, or (B) a preferred provider network, as defined in section 38a-479aa; and (2) "physician" means a physician or surgeon, chiropractor, podiatrist, psychologist or optometrist.

      (b) Not later than October 1, 2007, each contracting health organization shall establish and implement a procedure reasonably designed to permit a physician, physician group or physician organization under contract with such contracting health organization to view, on a confidential basis, in a digital format or by electronic means, at the option of such organization, the fee-for-service dollar amount such organization reimburses pursuant to the organization's contract with the physician, physician group or physician organization for the fifty current procedural terminology codes most commonly performed by the physician, physician group or physician organization.

      (c) The procedure established by a contracting health organization shall also permit a physician, physician group or physician organization to request and view fee-for-service dollar amounts the contracting health organization reimburses for current procedural terminology codes for which a physician, physician group or physician organization actually bills or intends to bill the contracting health organization, provided such codes are within the physician's, group's or organization's specialty or subspecialty.

      (d) The provisions of subsections (b) and (c) of this section shall not apply to any physician, physician group or physician organization whose services are reimbursed in a manner that does not utilize current procedural terminology codes.

      (e) The fee information received by a physician, physician group or physician organization is proprietary and shall be confidential, and the procedure adopted pursuant to this section may contain penalties for the unauthorized distribution of fee information, which may include termination from the contracting health organization network.

      (P.A. 06-178, S. 1; P.A. 07-54, S. 2.)

      History: P.A. 07-54 made a technical change in Subsec. (c), effective May 22, 2007.

PART Ib
HEALTH INSURANCE: PREFERRED PROVIDER NETWORKS

      Sec. 38a-479aa. Preferred provider networks. Definitions. Licensing. Fees. Requirements. (a) As used in this part and subsection (b) of section 20-138b:

      (1) "Covered benefits" means health care services to which an enrollee is entitled under the terms of a managed care plan;

      (2) "Enrollee" means an individual who is eligible to receive health care services through a preferred provider network;

      (3) "Health care services" means health care related services or products rendered or sold by a provider within the scope of the provider's license or legal authorization, and includes hospital, medical, surgical, dental, vision and pharmaceutical services or products;

      (4) "Managed care organization" means (A) a managed care organization, as defined in section 38a-478, (B) any other health insurer, or (C) a reinsurer with respect to health insurance;

      (5) "Managed care plan" means a managed care plan, as defined in section 38a-478;

      (6) "Person" means an individual, agency, political subdivision, partnership, corporation, limited liability company, association or any other entity;

      (7) "Preferred provider network" means a person, which is not a managed care organization, but which pays claims for the delivery of health care services, accepts financial risk for the delivery of health care services and establishes, operates or maintains an arrangement or contract with providers relating to (A) the health care services rendered by the providers, and (B) the amounts to be paid to the providers for such services. "Preferred provider network" does not include (i) a workers' compensation preferred provider organization established pursuant to section 31-279-10 of the regulations of Connecticut state agencies, (ii) an independent practice association or physician hospital organization whose primary function is to contract with insurers and provide services to providers, (iii) a clinical laboratory, licensed pursuant to section 19a-30, whose primary payments for any contracted or referred services are made to other licensed clinical laboratories or for associated pathology services, or (iv) a pharmacy benefits manager responsible for administering pharmacy claims whose primary function is to administer the pharmacy benefit on behalf of a health benefit plan;

      (8) "Provider" means an individual or entity duly licensed or legally authorized to provide health care services; and

      (9) "Commissioner" means the Insurance Commissioner.

      (b) On and after May 1, 2004, no preferred provider network may enter into or renew a contractual relationship with a managed care organization unless the preferred provider network is licensed by the commissioner. On and after May 1, 2005, no preferred provider network may conduct business in this state unless it is licensed by the commissioner. Any person seeking to obtain or renew a license shall submit an application to the commissioner, on such form as the commissioner may prescribe, and shall include the filing described in this subsection, except that a person seeking to renew a license may submit only the information necessary to update its previous filing. Applications shall be submitted by March first of each year in order to qualify for the May first license issue or renewal date. The filing required from such preferred provider network shall include the following information: (1) The identity of the preferred provider network and any company or organization controlling the operation of the preferred provider network, including the name, business address, contact person, a description of the controlling company or organization and, where applicable, the following: (A) A certificate from the Secretary of the State regarding the preferred provider network's and the controlling company's or organization's good standing to do business in the state; (B) a copy of the preferred provider network's and the controlling company's or organization's financial statement completed in accordance with sections 38a-53 and 38a-54, as applicable, for the end of its most recently concluded fiscal year, along with the name and address of any public accounting firm or internal accountant which prepared or assisted in the preparation of such financial statement; (C) a list of the names, official positions and occupations of members of the preferred provider network's and the controlling company's or organization's board of directors or other policy-making body and of those executive officers who are responsible for the preferred provider network's and controlling company's or organization's activities with respect to the health care services network; (D) a list of the preferred provider network's and the controlling company's or organization's principal owners; (E) in the case of an out-of-state preferred provider network, controlling company or organization, a certificate that such preferred provider network, company or organization is in good standing in its state of organization; (F) in the case of a Connecticut or out-of-state preferred provider network, controlling company or organization, a report of the details of any suspension, sanction or other disciplinary action relating to such preferred provider network, or controlling company or organization in this state or in any other state; and (G) the identity, address and current relationship of any related or predecessor controlling company or organization. For purposes of this subparagraph, "related" means that a substantial number of the board or policy-making body members, executive officers or principal owners of both companies are the same; (2) a general description of the preferred provider network and participation in the preferred provider network, including: (A) The geographical service area of and the names of the hospitals included in the preferred provider network; (B) the primary care physicians, the specialty physicians, any other contracting providers and the number and percentage of each group's capacity to accept new patients; (C) a list of all entities on whose behalf the preferred provider network has contracts or agreements to provide health care services; (D) a table listing all major categories of health care services provided by the preferred provider network; (E) an approximate number of total enrollees served in all of the preferred provider network's contracts or agreements; (F) a list of subcontractors of the preferred provider network, not including individual participating providers, that assume financial risk from the preferred provider network and to what extent each subcontractor assumes financial risk; (G) a contingency plan describing how contracted health care services will be provided in the event of insolvency; and (H) any other information requested by the commissioner; and (3) the name and address of the person to whom applications may be made for participation.

      (c) Any person developing a preferred provider network, or expanding a preferred provider network into a new county, pursuant to this section and subsection (b) of section 20-138b, shall publish a notice, in at least one newspaper having a substantial circulation in the service area in which the preferred provider network operates or will operate, indicating such planned development or expansion. Such notice shall include the medical specialties included in the preferred provider network, the name and address of the person to whom applications may be made for participation and a time frame for making application. The preferred provider network shall provide the applicant with written acknowledgment of receipt of the application. Each complete application shall be considered by the preferred provider network in a timely manner.

      (d) (1) Each preferred provider network shall file with the commissioner and make available upon request from a provider the general criteria for its selection or termination of providers. Disclosure shall not be required of criteria deemed by the preferred provider network to be of a proprietary or competitive nature that would hurt the preferred provider network's ability to compete or to manage health care services. For purposes of this section, criteria is of a proprietary or competitive nature if it has the tendency to cause providers to alter their practice pattern in a manner that would circumvent efforts to contain health care costs and criteria is of a proprietary nature if revealing the criteria would cause the preferred provider network's competitors to obtain valuable business information.

      (2) If a preferred provider network uses criteria that have not been filed pursuant to subdivision (1) of this subsection to judge the quality and cost-effectiveness of a provider's practice under any specific program within the preferred provider network, the preferred provider network may not reject or terminate the provider participating in that program based upon such criteria until the provider has been informed of the criteria that the provider's practice fails to meet.

      (e) Each preferred provider network shall permit the Insurance Commissioner to inspect its books and records.

      (f) Each preferred provider network shall permit the commissioner to examine, under oath, any officer or agent of the preferred provider network or controlling company or organization with respect to the use of the funds of the preferred provider network, company or organization, and compliance with (1) the provisions of this part, and (2) the terms and conditions of its contracts to provide health care services.

      (g) Each preferred provider network shall file with the commissioner a notice of any material modification of any matter or document furnished pursuant to this part, and shall include such supporting documents as are necessary to explain the modification.

      (h) Each preferred provider network shall maintain a minimum net worth of either (1) the greater of (A) two hundred fifty thousand dollars, or (B) an amount equal to eight per cent of its annual expenditures as reported on its most recent financial statement completed and filed with the commissioner in accordance with sections 38a-53 and 38a-54, as applicable, or (2) another amount determined by the commissioner.

      (i) Each preferred provider network shall maintain or arrange for a letter of credit, bond, surety, reinsurance, reserve or other financial security acceptable to the commissioner for the exclusive use of paying any outstanding amounts owed participating providers in the event of insolvency or nonpayment except that any remaining security may be used for the purpose of reimbursing managed care organizations in accordance with subsection (b) of section 38a-479bb. Such outstanding amount shall be at least an amount equal to the greater of (1) an amount sufficient to make payments to participating providers for two months determined on the basis of the two months within the past year with the greatest amounts owed by the preferred provider network to participating providers, (2) the actual outstanding amount owed by the preferred provider network to participating providers, or (3) another amount determined by the commissioner. Such amount may be credited against the preferred provider network's minimum net worth requirements set forth in subsection (h) of this section. The commissioner shall review such security amount and calculation on a quarterly basis.

      (j) Each preferred provider network shall pay the applicable license or renewal fee specified in section 38a-11. The commissioner shall use the amount of such fees solely for the purpose of regulating preferred provider networks.

      (k) In no event, including, but not limited to, nonpayment by the managed care organization, insolvency of the managed care organization, or breach of contract between the managed care organization and the preferred provider network, shall a preferred provider network bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any recourse against an enrollee or an enrollee's designee, other than the managed care organization, for covered benefits provided, except that the preferred provider network may collect any copayments, deductibles or other out-of-pocket expenses that the enrollee is required to pay pursuant to the managed care plan.

      (l) Each contract or agreement between a preferred provider network and a participating provider shall contain a provision that if the preferred provider network fails to pay for health care services as set forth in the contract, the enrollee shall not be liable to the participating provider for any sums owed by the preferred provider network or any sums owed by the managed care organization because of nonpayment by the managed care organization, insolvency of the managed care organization or breach of contract between the managed care organization and the preferred provider network.

      (m) Each utilization review determination made by or on behalf of a preferred provider network shall be made in accordance with sections 38a-226 to 38a-226d, inclusive, except that any initial appeal of a determination not to certify an admission, service, procedure or extension of stay shall be conducted in accordance with subdivision (7) of subsection (a) of section 38a-226c, and any subsequent appeal shall be referred to the managed care organization on whose behalf the preferred provider network provides services. The managed care organization shall conduct the subsequent appeal in accordance with said subdivision.

      (June Sp. Sess. P.A. 01-4, S. 21; P.A. 03-169, S. 1; P.A. 06-90, S. 1; 06-196, S. 294; P.A. 07-191, S. 1; 07-200, S. 10.)

      History: P.A. 03-169 amended Subsec. (a) to substantially revise definitions, amended Subsec. (b) to require licensure before May 1, 2004, or May 1, 2005, for certain activities and to revise filing requirements, amended Subsec. (d) to make technical changes, amended Subsec. (e) to allow the commissioner to inspect books and records, and added new Subsecs. (f) to (m), inclusive, re requirements for preferred provider networks; P.A. 06-90 amended Subsec. (a)(7) to insert clause designators in exclusion from definition of "preferred provider network" and to include in such exclusion, clause (iii) re private clinical laboratory licensed under Sec. 19a-30 whose primary payments for services are made to other licensed clinical laboratories or for associated pathology services, effective May 30, 2006; P.A. 06-196 amended Subsec. (a)(7) by deleting "private" re licensed clinical laboratory in clause (iii), effective June 7, 2006; P.A. 07-191 amended Subsec. (i)(1) to provide that outstanding amount be at least equal to greater of an amount sufficient to make payments to participating providers for two months determined on basis of the two months within past year with greatest amounts owed to providers, rather than two "quarters", effective July 1, 2007; P.A. 07-200 amended Subsec. (a)(7) to insert as exclusion from definition of "preferred provider network" clause (iv) re pharmacy benefits manager responsible for administering pharmacy claims whose primary function is to administer pharmacy benefit on behalf of a health benefit plan, effective January 1, 2008.

      Sec. 38a-479bb. Requirements for managed care organizations that contract with preferred provider networks. Requirements for preferred provider networks. (a) On and after May 1, 2004, no managed care organization may enter into or renew a contractual relationship with a preferred provider network that is not licensed in accordance with section 38a-479aa. On and after May 1, 2005, no managed care organization may continue or maintain a contractual relationship with a preferred provider network that is not licensed in accordance with section 38a-479aa.

      (b) Each managed care organization that contracts with a preferred provider network shall (1) post and maintain or require the preferred provider network to post and maintain a letter of credit, bond, surety, reinsurance, reserve or other financial security acceptable to the Insurance Commissioner, in order to satisfy the risk accepted by the preferred provider network pursuant to the contract, in an amount calculated in accordance with subsection (i) of section 38a-479aa, and (2) determine who posts and maintains the security required under subdivision (1) of this subsection. In the event of insolvency or nonpayment such security shall be used by the preferred provider network, or other entity designated by the commissioner, solely for the purpose of paying any outstanding amounts owed participating providers, except that any remaining security may be used for the purpose of reimbursing the managed care organization for any payments made by the managed care organization to participating providers on behalf of the preferred provider network.

      (c) Each managed care organization that contracts with a preferred provider network shall provide to the preferred provider network at the time the contract is entered into and annually thereafter:

      (1) Information, as determined by the managed care organization, regarding the amount and method of remuneration to be paid to the preferred provider network;

      (2) Information, as determined by the managed care organization, to assist the preferred provider network in being informed regarding any financial risk assumed under the contract or agreement, including, but not limited to, enrollment data, primary care provider to covered person ratios, provider to covered person ratios by specialty, a table of the services that the preferred provider network is responsible for, expected or projected utilization rates, and all factors used to adjust payments or risk-sharing targets;

      (3) The National Associations of Insurance Commissioners annual statement for the managed care organization; and

      (4) Any other information the commissioner may require.

      (d) Each managed care organization shall ensure that any contract it has with a preferred provider network includes:

      (1) A provision that requires the preferred provider network to provide to the managed care organization at the time a contract is entered into, annually, and upon request of the managed care organization, (A) the financial statement completed in accordance with sections 38a-53 and 38a-54, as applicable, and section 38a-479aa; (B) documentation that satisfies the managed care organization that the preferred provider network has sufficient ability to accept financial risk; (C) documentation that satisfies the managed care organization that the preferred provider network has appropriate management expertise and infrastructure; (D) documentation that satisfies the managed care organization that the preferred provider network has an adequate provider network taking into account the geographic distribution of enrollees and participating providers and whether participating providers are accepting new patients; (E) an accurate list of participating providers; and (F) documentation that satisfies the managed care organization that the preferred provider network has the ability to ensure the delivery of health care services as set forth in the contract;

      (2) A provision that requires the preferred provider network to provide to the managed care organization a quarterly status report that includes (A) information updating the financial statement completed in accordance with sections 38a-53 and 38a-54, as applicable, and section 38a-479aa; (B) a report showing amounts paid to those providers who provide health care services on behalf of the managed care organization; (C) an estimate of payments due providers but not yet reported by providers; (D) amounts owed to providers for that quarter; and (E) the number of utilization review determinations not to certify an admission, service, procedure or extension of stay made by or on behalf of the preferred provider network and the outcome of such determination on appeal;

      (3) A provision that requires the preferred provider network to provide notice to the managed care organization not later than five business days after (A) any change involving the ownership structure of the preferred provider network; (B) financial or operational concerns arise regarding the financial viability of the preferred provider network; or (C) the preferred provider network's loss of a license in this or any other state;

      (4) A provision that if the managed care organization fails to pay for health care services as set forth in the contract, the enrollee will not be liable to the provider or preferred provider network for any sums owed by the managed care organization or preferred provider network;

      (5) A provision that the preferred provider network shall include in all contracts between the preferred provider network and participating providers a provision that if the preferred provider network fails to pay for health care services as set forth in the contract, for any reason, the enrollee shall not be liable to the participating provider or preferred provider network for any sums owed by the preferred provider network or any sums owed by the managed care organization because of nonpayment by the managed care organization, insolvency of the managed care organization or breach of contract between the managed care organization and the preferred provider network;

      (6) A provision requiring the preferred provider network to provide information to the managed care organization, satisfactory to the managed care organization, regarding the preferred provider network's reserves for financial risk;

      (7) A provision that (A) the preferred provider network or managed care organization shall post and maintain a letter of credit, bond, surety, reinsurance, reserve or other financial security acceptable to the commissioner, in order to satisfy the risk accepted by the preferred provider network pursuant to the contract, in an amount calculated in accordance with subsection (i) of section 38a-479aa, (B) the managed care organization shall determine who posts and maintains the security required under subparagraph (A) of this subdivision, and (C) in the event of insolvency or nonpayment, such security shall be used by the preferred provider network, or other entity designated by the commissioner, solely for the purpose of paying any outstanding amounts owed participating providers, except that any remaining security may be used for the purpose of reimbursing the managed care organization for any payments made by the managed care organization to participating providers on behalf of the preferred provider network;

      (8) A provision under which the managed care organization is permitted, at the discretion of the managed care organization, to pay participating providers directly and in lieu of the preferred provider network in the event of insolvency or mismanagement by the preferred provider network and that payments made pursuant to this subdivision may be made or reimbursed from the security posted pursuant to subsection (b) of this section;

      (9) A provision transferring and assigning contracts between the preferred provider network and participating providers to the managed care organization for the provision of future services by participating providers to enrollees, at the discretion of the managed care organization, in the event the preferred provider network (A) becomes insolvent, (B) otherwise ceases to conduct business, as determined by the commissioner, or (C) demonstrates a pattern of nonpayment of authorized claims, as determined by the commissioner, for a period in excess of ninety days;

      (10) A provision that each contract or agreement between the preferred provider network and participating providers shall include a provision transferring and assigning contracts between the preferred provider network and participating providers to the managed care organization for the provision of future health care services by participating providers to enrollees, at the discretion of the managed care organization, in the event the preferred provider network (A) becomes insolvent, (B) otherwise ceases to conduct business, as determined by the commissioner, or (C) demonstrates a pattern of nonpayment of authorized claims, as determined by the commissioner, for a period in excess of ninety days;

      (11) A provision that the preferred provider network shall pay for the delivery of health care services and operate or maintain arrangements or contracts with providers in a manner consistent with the provisions of law that apply to the managed care organization's contracts with enrollees and providers; and

      (12) A provision that the preferred provider network shall ensure that utilization review determinations are made in accordance with sections 38a-226 to 38a-226d, inclusive, except that any initial appeal of a determination not to certify an admission, service, procedure or extension of stay shall be made in accordance with subdivision (7) of subsection (a) of section 38a-226c. In cases where an appeal to reverse a determination not to certify is unsuccessful, the preferred provider network shall refer the case to the managed care organization which shall conduct the subsequent appeal, if any, in accordance with said subdivision.

      (e) Each managed care organization that contracts with a preferred provider network shall have adequate procedures in place to notify the commissioner that a preferred provider network has experienced an event that may threaten the preferred provider network's ability to materially perform under its contract with the managed care organization. The managed care organization shall provide such notice to the commissioner not later than five days after it discovers that the preferred provider network has experienced such an event.

      (f) Each managed care organization that contracts with a preferred provider network shall monitor and maintain systems and controls for monitoring the financial health of the preferred provider networks with which it contracts.

      (g) Each managed care organization that contracts with a preferred provider network shall provide to the commissioner, and update on an annual basis, a contingency plan, satisfactory to the commissioner, describing how health care services will be provided to enrollees if the preferred provider network becomes insolvent or is mismanaged. The contingency plan shall include a description of what contractual and financial steps have been taken to ensure continuity of care to enrollees if the preferred provider network becomes insolvent or is mismanaged.

      (h) Notwithstanding any agreement to the contrary, each managed care organization shall retain full responsibility to its enrollees for providing coverage for health care services pursuant to any applicable managed care plan and any applicable state or federal law. Each managed care organization shall exercise due diligence in its selection and oversight of a preferred provider network.

      (i) Notwithstanding any agreement to the contrary, each managed care organization shall be able to demonstrate to the satisfaction of the commissioner that the managed care organization can fulfill its nontransferable obligations to provide coverage for the provision of health care services to enrollees in the event of the failure, for any reason, of a preferred provider network.

      (j) Each managed care organization that contracts with a preferred provider network shall provide that in the event of the failure, for any reason, of a preferred provider network, the managed care organization shall provide coverage for the enrollee to continue covered treatment with the provider who treated the enrollee under the preferred provider network contract regardless of whether the provider participates in any plan operated by the managed care organization. In the event of such failure, the managed care organization shall continue coverage until the earlier of (1) the date the enrollee's treatment is completed under a treatment plan that was authorized and in effect on the date of the failure, or (2) the date the contract between the enrollee and the managed care organization terminates. The managed care organization shall compensate a provider for such continued treatment at the rate due the provider under the provider's contract with the failed preferred provider network.

      (k) Each managed care organization that contracts with a preferred provider network shall confirm the information in the quarterly status report submitted by the preferred provider network pursuant to subdivision (2) of subsection (d) of this section and shall submit such information to the commissioner, on such form as the commissioner prescribes, not later than ten days after receiving a request from the commissioner for such information.

      (l) (1) Each managed care organization that contracts with a preferred provider network shall certify annually to the commissioner, on such form and in such manner as the commissioner prescribes, that the managed care organization has reviewed the documentation submitted by the preferred provider network pursuant to subdivision (l) of subsection (d) of this section and has determined that the preferred provider network maintains a provider network that is adequate to ensure the delivery of health care services as set forth in the contract. If the commissioner finds that the certification was not submitted in good faith, the commissioner may deem the managed care organization to have not complied with this subsection and may take action pursuant to section 38a-479ee.

      (2) If the managed care organization determines that the preferred provider network's provider network is not adequate and must be increased, the managed care organization shall provide written notice of the determination to the commissioner. Such notice shall describe (A) any plan in place for the preferred provider network to increase its provider network, and (B) the managed care organization's contingency plan in the event the preferred provider network does not satisfactorily increase its provider network.

      (m) Nothing in this part or part 1a of this chapter shall be construed to require a preferred provider network to share proprietary information with a managed care organization concerning contracts or financial arrangements with providers who are not included in that managed care organization's network, or other preferred provider networks or managed care organizations.

      (P.A. 03-169, S. 2; P.A. 07-217, S. 157.)

      History: P.A. 03-169 effective May 1, 2004; P.A. 07-217 made technical changes in Subsec. (1)(2), effective July 12, 2007.

PART Id
HEALTH INSURANCE: PHARMACY BENEFITS MANAGERS

      Sec. 38a-479aaa. Pharmacy benefits managers. Definitions. As used in this section and sections 38a-479bbb to 38a-479hhh, inclusive:

      (1) "Commissioner" means the Insurance Commissioner;

      (2) "Department" means the Insurance Department;

      (3) "Drug" means drug, as defined in section 21a-92;

      (4) "Person" means person, as defined in section 38a-1;

      (5) "Pharmacist services" includes (A) drug therapy and other patient care services provided by a licensed pharmacist intended to achieve outcomes related to the cure or prevention of a disease, elimination or reduction of a patient's symptoms, and (B) education or intervention by a licensed pharmacist intended to arrest or slow a disease process;

      (6) "Pharmacist" means an individual licensed to practice pharmacy under section 20-590, 20-591, 20-592 or 20-593, and who is thereby recognized as a health care provider by the state of Connecticut;

      (7) "Pharmacy" means a place of business where drugs may be sold at retail and for which a pharmacy license has been issued to an applicant pursuant to section 20-594; and

      (8) "Pharmacy benefits manager" or "manager" means any person that administers the prescription drug, prescription device, pharmacist services or prescription drug and device and pharmacist services portion of a health benefit plan on behalf of plan sponsors such as self-insured employers, insurance companies, labor unions and health care centers.

      (P.A. 07-200, S. 1.)

      History: P.A. 07-200 effective January 1, 2008.

      Sec. 38a-479bbb. Registration of pharmacy benefits managers required. Application for registration. Fee. Surety bond. Exemption from registration. (a) Except as provided in subsection (d) of this section, no person shall act as a pharmacy benefits manager in this state without first obtaining a certificate of registration from the commissioner.

      (b) Any person seeking a certificate of registration shall apply to the commissioner, in writing, on a form provided by the commissioner. The application form shall state (1) the name, address, official position and professional qualifications of each individual responsible for the conduct of the affairs of the pharmacy benefits manager, including all members of the board of directors, board of trustees, executive committee, other governing board or committee, the principal officers in the case of a corporation, the partners or members in the case of a partnership or association and any other person who exercises control or influence over the affairs of the pharmacy benefits manager, and (2) the name and address of the applicant's agent for service of process in this state.

      (c) Each application for a certificate of registration shall be accompanied by (1) a nonrefundable fee of fifty dollars, and (2) evidence of a surety bond in an amount equivalent to ten per cent of one month of claims in this state over a twelve-month average, except that such bond shall not be less than twenty-five thousand dollars or more than one million dollars.

      (d) Any pharmacy benefits manager operating as a line of business or affiliate of a health insurer, health care center, hospital service corporation, medical service corporation or fraternal benefit society licensed in this state or any affiliate of such health insurer, health care center, hospital service corporation, medical service corporation or fraternal benefit society shall not be required to obtain a certificate of registration. Such health insurer, health care center, hospital service corporation, medical service corporation or fraternal benefit society shall notify the commissioner annually, in writing, on a form provided by the commissioner, that it is affiliated with or operating a business as a pharmacy benefits manager.

      (e) Any person acting as a pharmacy benefits manager on January 1, 2008, and required to obtain a certificate of registration under subsection (a) of this section, shall obtain a certificate of registration from the commissioner not later than April 1, 2008, in order to continue to do business in this state.

      (P.A. 07-200, S. 2.)

      History: P.A. 07-200 effective January 1, 2008.

      Sec. 38a-479ccc. Certificate of registration; when issued or refused. Suspension, revocation or refusal to issue or renew registration; grounds. (a) Upon receipt of a completed application, evidence of a surety bond and fee, the commissioner shall: (1) Issue and deliver to the applicant a certificate of registration; or (2) refuse to issue the certificate.

      (b) The commissioner may suspend, revoke or refuse to issue or renew any certificate of registration for: (1) Conduct of a character likely to mislead, deceive or defraud the public or the commissioner; (2) unfair or deceptive business practices; or (3) nonpayment of the renewal fee.

      (c) The commissioner shall not suspend or revoke any certificate of registration except upon notice and hearing in accordance with chapter 54.

      (P.A. 07-200, S. 3.)

      History: P.A. 07-200 effective January 1, 2008.

      Sec. 38a-479ddd. Hearing on denial of certificate. Subsequent application. (a) Upon refusal to issue or renew a certificate, the commissioner shall notify the applicant of the denial and of the applicant's right to request a hearing within ten days from the date of receipt of the notice of denial.

      (b) If the applicant requests a hearing within such ten days, the commissioner shall give notice of the grounds for the commissioner's refusal and shall conduct a hearing concerning such refusal in accordance with the provisions of chapter 54 concerning contested cases.

      (c) If the commissioner's denial of a certificate is sustained after such hearing, an applicant may make a new application not less than one year after the date on which such denial was sustained.

      (P.A. 07-200, S. 4.)

      History: P.A. 07-200 effective January 1, 2008.

      Sec. 38a-479eee. Investigations and hearings. Powers of commissioner. The commissioner may conduct investigations and hold hearings on any matter under the provisions of sections 38a-479aaa to 38a-479hhh, inclusive. The commissioner may issue subpoenas, administer oaths, compel testimony and order the production of books, records and documents. If any person refuses to appear, to testify or to produce any book, record, paper or document when so ordered, upon application of the commissioner, a judge of the Superior Court may make such order as may be appropriate to aid in the enforcement of this section.

      (P.A. 07-200, S. 5.)

      History: P.A. 07-200 effective January 1, 2008.

      Sec. 38a-479fff. Expiration of certificates of registration. Renewal. Fees. (a) All certificates of registration issued under section 38a-479ccc shall expire annually on December thirty-first.

      (b) Any person seeking to renew a certificate of registration shall apply to the commissioner, in writing, on a form provided by the commissioner. The application for renewal shall be in such form as the commissioner prescribes. Such application shall be accompanied by a nonrefundable fee of fifty dollars. Any late payment of such fee shall include a penalty fee of fifty dollars.

      (P.A. 07-200, S. 6.)

      History: P.A. 07-200 effective January 1, 2008.

      Sec. 38a-479ggg. Regulations. The commissioner shall adopt regulations, in accordance with chapter 54, to implement the provisions of sections 38a-479aaa to 38a-479hhh, inclusive. Such regulations shall specify the contents of the application form and any other form or report required under the provisions of said sections.

      (P.A. 07-200, S. 7.)

      History: P.A. 07-200 effective January 1, 2008.

      Sec. 38a-479hhh. Appeals. Any person aggrieved by an order or decision of the commissioner under sections 38a-479aaa to 38a-479hhh, inclusive, may appeal therefrom in accordance with the provisions of section 4-183.

      (P.A. 07-200, S. 8.)

      History: P.A. 07-200 effective January 1, 2008.

PART II
INDIVIDUAL HEALTH INSURANCE

      Sec. 38a-482. (Formerly Sec. 38-166). Form of policy. No individual health insurance policy shall be delivered or issued for delivery to any person in this state unless: (1) The entire money and other considerations therefor are expressed therein; (2) the time at which the insurance takes effect and terminates is expressed therein; (3) such policy purports to insure only one person, except that a policy may insure, originally or by subsequent amendment, upon the application of an adult member of a family, who shall be deemed the policyholder, any two or more eligible members of such family, including husband, wife, dependent children or any children as specified in section 38a-497, and any other person dependent upon the policyholder; (4) the style, arrangement and overall appearance of the policy give no undue prominence to any portion of the text, and every printed portion of the text of the policy and of any endorsements or attached papers is plainly printed in light-faced type of a style in general use, the size of which shall be uniform and not less than ten-point with a lowercase unspaced alphabet length not less than one hundred and twenty-point, the word "text" as herein used including all printed matter except the name and address of the insurer, name or title of the policy, the brief description, if any, and captions and subcaptions; (5) the exceptions and reductions of indemnity are set forth in the policy and, except as provided in section 38a-483, are printed, at the insurer's option, either included with the benefit provision to which they apply, or under an appropriate caption such as "EXCEPTIONS" or "EXCEPTIONS AND REDUCTIONS", provided, if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies; (6) each such form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page thereof; and (7) such policy contains no provision purporting to make any portion of the charter, rules, constitution or bylaws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the commissioner.

      (1949 Rev., S. 6178; 1951, S. 2836d; 1972, P.A. 127, S. 63; P.A. 90-243, S. 73; P.A. 07-185, S. 15.)

      History: 1972 act changed maximum insurable age of children in Subsec. (a)(3) from 19 to 18, reflecting changed age of majority; P.A. 90-243 added reference to "individual health insurance" and deleted former Subsec. (b); Sec. 38-166 transferred to Sec. 38a-482 in 1991; P.A. 07-185 amended Subdiv. (3) re age of children who may be insured under adult family member's individual health insurance policy by replacing provision re specified age not to exceed 18 years with reference to Sec. 38a-497, effective July 1, 2007.

      Sec. 38a-482a. Individual health insurance policy to contain definition of "medically necessary" or "medical necessity". (a) No insurer, health care center, hospital and medical service corporation or other entity delivering, issuing for delivery, renewing, continuing or amending any individual health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (6), (10), (11) and (12) of section 38a-469 in this state on or after January 1, 2008, shall deliver or issue for delivery in this state any such policy unless such policy contains a definition of "medically necessary" or "medical necessity" as follows: "Medically necessary" or "medical necessity" means health care services that a physician, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing or treating an illness, injury, disease or its symptoms, and that are: (1) In accordance with generally accepted standards of medical practice; (2) clinically appropriate, in terms of type, frequency, extent, site and duration and considered effective for the patient's illness, injury or disease; and (3) not primarily for the convenience of the patient, physician or other health care provider and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury or disease. For the purposes of this subsection, "generally accepted standards of medical practice" means standards that are based on credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community or otherwise consistent with the standards set forth in policy issues involving clinical judgment.

      (b) The provisions of subsection (a) of this section shall not apply to any insurer, health care center, hospital and medical service corporation or other entity that has entered into any national settlement agreement until the expiration of any such agreement.

      (P.A. 07-75, S. 1.)

      History: P.A. 07-75 effective January 1, 2008.

      See Sec. 38a-513c for similar provisions re group policies.

      Sec. 38a-482b. Individual health insurance policy providing limited coverage to include disclosure. (a) Each individual health insurance policy, subscriber contract or certificate of coverage delivered or issued for delivery in this state on or after January 1, 2008, that provides limited coverage, and any marketing material, application for coverage and enrollment material relative to such policy, contract or certificate, shall include the following statement printed in capital letters in not less than twelve-point bold face type and located in a conspicuous manner on such document:

      "THIS LIMITED HEALTH BENEFITS PLAN DOES NOT PROVIDE COMPREHENSIVE MEDICAL COVERAGE. IT IS A BASIC OR LIMITED BENEFITS POLICY AND IS NOT INTENDED TO COVER ALL MEDICAL EXPENSES. THIS PLAN IS NOT DESIGNED TO COVER THE COSTS OF SERIOUS OR CHRONIC ILLNESS. IT CONTAINS SPECIFIC DOLLAR LIMITS THAT WILL BE PAID FOR MEDICAL SERVICES WHICH MAY NOT BE EXCEEDED. IF THE COST OF SERVICES EXCEEDS THOSE LIMITS, THE BENEFICIARY AND NOT THE INSURER IS RESPONSIBLE FOR PAYMENT OF THE EXCESS AMOUNTS. THE SPECIFIC DOLLAR LIMITS ARE AS FOLLOWS: (INSURER TO SPECIFY SUCH AMOUNTS)."

      (b) For the purposes of this section, "limited coverage" means an insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 that contains an annual maximum benefit of less than one hundred thousand dollars or a per service or per condition benefit limit of less than twenty thousand dollars.

      (P.A. 07-96, S. 1.)

      History: P.A. 07-96 effective July 1, 2007.

      Sec. 38a-488a. Mandatory coverage for the diagnosis and treatment of mental or nervous conditions. Exceptions. Benefits payable re type of provider or facility. State's claim against proceeds. (a) Each individual health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 delivered, issued for delivery, renewed, amended or continued in this state on or after January 1, 2000, shall provide benefits for the diagnosis and treatment of mental or nervous conditions. For the purposes of this section, "mental or nervous conditions" means mental disorders, as defined in the most recent edition of the American Psychiatric Association's "Diagnostic and Statistical Manual of Mental Disorders". "Mental or nervous conditions" does not include (1) mental retardation, (2) learning disorders, (3) motor skills disorders, (4) communication disorders, (5) caffeine-related disorders, (6) relational problems, and (7) additional conditions that may be a focus of clinical attention, that are not otherwise defined as mental disorders in the most recent edition of the American Psychiatric Association's "Diagnostic and Statistical Manual of Mental Disorders".

      (b) No such policy shall establish any terms, conditions or benefits that place a greater financial burden on an insured for access to diagnosis or treatment of mental or nervous conditions than for diagnosis or treatment of medical, surgical or other physical health conditions.

      (c) In the case of benefits payable for the services of a licensed physician, such benefits shall be payable for the same services when such services are lawfully rendered by a psychologist licensed under the provisions of chapter 383 or by such a licensed psychologist in a licensed hospital or clinic.

      (d) In the case of benefits payable for the services of a licensed physician or psychologist, such benefits shall be payable for the same services when such services are rendered by:

      (1) A clinical social worker who is licensed under the provisions of chapter 383b and who has passed the clinical examination of the American Association of State Social Work Boards and has completed at least two thousand hours of post-master's social work experience in a nonprofit agency qualifying as a tax-exempt organization under Section 501(c) of the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, in a municipal, state or federal agency or in an institution licensed by the Department of Public Health under section 19a-490;

      (2) A social worker who was certified as an independent social worker under the provisions of chapter 383b prior to October 1, 1990;

      (3) A licensed marital and family therapist who has completed at least two thousand hours of post-master's marriage and family therapy work experience in a nonprofit agency qualifying as a tax-exempt organization under Section 501(c) of the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, in a municipal, state or federal agency or in an institution licensed by the Department of Public Health under section 19a-490;

      (4) A marital and family therapist who was certified under the provisions of chapter 383a prior to October 1, 1992;

      (5) A licensed alcohol and drug counselor, as defined in section 20-74s, or a certified alcohol and drug counselor, as defined in section 20-74s; or

      (6) A licensed professional counselor.

      (e) For purposes of this section, the term "covered expenses" means the usual, customary and reasonable charges for treatment deemed necessary under generally accepted medical standards, except that in the case of a managed care plan, as defined in section 38a-478, "covered expenses" means the payments agreed upon in the contract between a managed care organization, as defined in section 38a-478, and a provider, as defined in section 38a-478.

      (f) (1) In the case of benefits payable for the services of a licensed physician, such benefits shall be payable for (A) services rendered in a child guidance clinic or residential treatment facility by a person with a master's degree in social work or by a person with a master's degree in marriage and family therapy under the supervision of a psychiatrist, physician, licensed marital and family therapist, or licensed clinical social worker who is eligible for reimbursement under subdivisions (1) to (4), inclusive, of subsection (d) of this section; (B) services rendered in a residential treatment facility by a licensed or certified alcohol and drug counselor who is eligible for reimbursement under subdivision (5) of subsection (d) of this section; or (C) services rendered in a residential treatment facility by a licensed professional counselor who is eligible for reimbursement under subdivision (6) of subsection (d) of this section.

      (2) In the case of benefits payable for the services of a licensed psychologist under subsection (d) of this section, such benefits shall be payable for (A) services rendered in a child guidance clinic or residential treatment facility by a person with a master's degree in social work or by a person with a master's degree in marriage and family therapy under the supervision of such licensed psychologist, licensed marital and family therapist, or licensed clinical social worker who is eligible for reimbursement under subdivisions (1) to (4), inclusive, of subsection (d) of this section; (B) services rendered in a residential treatment facility by a licensed or certified alcohol and drug counselor who is eligible for reimbursement under subdivision (5) of subsection (d) of this section; or (C) services rendered in a residential treatment facility by a licensed professional counselor who is eligible for reimbursement under subdivision (6) of subsection (d) of this section.

      (g) In the case of benefits payable for the service of a licensed physician practicing as a psychiatrist or a licensed psychologist, under subsection (d) of this section, such benefits shall be payable for outpatient services rendered (1) in a nonprofit community mental health center, as defined by the Department of Mental Health and Addiction Services, in a nonprofit licensed adult psychiatric clinic operated by an accredited hospital or in a residential treatment facility; (2) under the supervision of a licensed physician practicing as a psychiatrist, a licensed psychologist, a licensed marital and family therapist, a licensed clinical social worker, a licensed or certified alcohol and drug counselor or a licensed professional counselor who is eligible for reimbursement under subdivisions (1) to (6), inclusive, of subsection (d) of this section; and (3) within the scope of the license issued to the center or clinic by the Department of Public Health or to the residential treatment facility by the Department of Children and Families.

      (h) Except in the case of emergency services or in the case of services for which an individual has been referred by a physician affiliated with a health care center, nothing in this section shall be construed to require a health care center to provide benefits under this section through facilities that are not affiliated with the health care center.

      (i) In the case of any person admitted to a state institution or facility administered by the Department of Mental Health and Addiction Services, Department of Public Health, Department of Children and Families or the Department of Developmental Services, the state shall have a lien upon the proceeds of any coverage available to such person or a legally liable relative of such person under the terms of this section, to the extent of the per capita cost of such person's care. Except in the case of emergency services, the provisions of this subsection shall not apply to coverage provided under a managed care plan, as defined in section 38a-478.

      (June 18 Sp. Sess. P.A. 97-8, S. 63, 88; P.A. 99-284, S. 27, 60; P.A. 00-135, S. 10, 21; P.A. 02-24, S. 6; P.A. 07-73, S. 2(a).)

      History: June 18 Sp. Sess. P.A. 97-8 effective July 1, 1997; P.A. 99-284 rewrote Subsec. (a) and referenced Subdivs. (1), (2), (4), (11) and (12) of Sec. 38a-469, deleted reference to biologically-based mental or nervous conditions and definition thereof and replaced with provision for coverage of the diagnosis and treatment of mental or nervous conditions, and defined "mental or nervous conditions", added new Subsec. (b) re prohibition on terms, conditions or benefits that place a greater financial burden on insured re mental or nervous conditions than for other conditions, added new Subsec. (c) re benefits payable when rendered by a psychologist, added new Subsec. (d) re benefits payable for enumerated providers, added new Subsec. (e) to define "covered expenses", added new Subsec. (f) re benefits payable for services rendered in certain facilities, added new Subsec. (g) re certain outpatient benefits, added new Subsec. (h) re benefits provided by a health care center, and added new Subsec. (i) re state liens against certain coverage proceeds, effective January 1, 2000; P.A. 00-135 reorganized section and added provisions re licensed professional counselors, effective May 26, 2000; P.A. 02-24 deleted "the" re "post-master's social work experience" in Subsec. (d)(1) and (3); pursuant to P.A. 07-73 "Department of Mental Retardation" was changed editorially by the Revisors to "Department of Developmental Services", effective October 1, 2007.

      Sec. 38a-490d*. Mandatory coverage for blood lead screening and risk assessment. Each individual health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 delivered, issued for delivery, amended, renewed or continued in this state on or after January 1, 2009, shall provide coverage for blood lead screening and risk assessments ordered by a primary care provider pursuant to section 19a-111g.

      (June Sp. Sess. P.A. 07-2, S. 51.)

      *Note: This section is effective January 1, 2009.

      History: June Sp. Sess. P.A. 07-2 effective January 1, 2009.

      Sec. 38a-492c. Coverage for low protein modified food products, amino acid modified preparations and specialized formulas. (a) For purposes of this section:

      (1) "Inherited metabolic disease" includes (A) a disease for which newborn screening is required under section 19a-55; and (B) cystic fibrosis.

      (2) "Low protein modified food product" means a product formulated to have less than one gram of protein per serving and intended for the dietary treatment of an inherited metabolic disease under the direction of a physician.

      (3) "Amino acid modified preparation" means a product intended for the dietary treatment of an inherited metabolic disease under the direction of a physician.

      (4) "Specialized formula" means a nutritional formula for children up to age twelve that is exempt from the general requirements for nutritional labeling under the statutory and regulatory guidelines of the federal Food and Drug Administration and is intended for use solely under medical supervision in the dietary management of specific diseases.

      (b) Each individual health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (6), (11) and (12) of section 38a-469 delivered, issued for delivery or renewed in this state on or after October 1, 1997, shall provide coverage for amino acid modified preparations and low protein modified food products for the treatment of inherited metabolic diseases if the amino acid modified preparations or low protein modified food products are prescribed for the therapeutic treatment of inherited metabolic diseases and are administered under the direction of a physician.

      (c) Each individual health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (6), (11) and (12) of section 38a-469 delivered, issued for delivery or renewed in this state on or after October 1, 2007, shall provide coverage for specialized formulas when such specialized formulas are medically necessary for the treatment of a disease or condition and are administered under the direction of a physician.

      (d) Such policy shall provide coverage for such preparations, food products and formulas on the same basis as outpatient prescription drugs.

      (P.A. 97-167, S. 1; P.A. 01-101, S. 1; P.A. 04-173, S. 1: P.A. 07-197, S. 1.)

      History: P.A. 01-101 defined, in new Subsec. (a)(4), and added coverage, in new Subsec. (c), for specialized formula; P.A. 04-173 amended Subsec. (a)(1) and (4) to redefine "inherited metabolic disease" to include cystic fibrosis and redefine "specialized formula" to include formula for children up to age 8, instead of age 3, and added Subsec. (d) to require coverage on the same basis as for outpatient prescription drugs; P.A. 07-197 amended Subsec. (a)(4) to redefine "specialized formula" to include formula for children up to age 12, instead of age 8, and amended Subsec. (c) to require coverage to be applicable to policies delivered, issued for delivery or renewed in this state on or after October 1, 2007.

      Sec. 38a-495d. Refund of prepaid premium for Medicare supplement policies. Each insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity which delivers or issues for delivery, continues or renews in this state any Medicare supplement policy or certificate, as defined in sections 38a-495, 38a-495a and 38a-522, shall refund any prepaid premium made by a policyholder or certificate holder for coverage under such policy or certificate who subsequently elects to cancel his or her policy prior to the expiration of the coverage period.

      (P.A. 07-48, S. 1.)

      Sec. 38a-497. (Formerly Sec. 38-174r). *(See end of section for amended version and effective date.) Termination of coverage of children in individual policies. Every individual health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (6), (10), (11) and (12) of section 38a-469 delivered, issued for delivery, amended or renewed in this state on or after October 1, 1982, shall provide that coverage of a child shall terminate no earlier than the policy anniversary date on or after whichever of the following occurs first, the date on which the child marries, ceases to be a dependent of the policyholder, attains the age of nineteen if the child is not a full-time student at an accredited institution, or attains the age of twenty-three if the child is a full-time student at an accredited institution.

      (P.A. 82-143; P.A. 90-243, S. 87.)

      *Note: On and after January 1, 2009, this section, as amended by section 16 of public act 07-185 and sections 64 and 69 of public act 07-2 of the June special session, is to read as follows:

      "Sec. 38a-497. (Formerly Sec. 38-174r). Termination of coverage of children in individual policies. Every individual health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (6), (10), (11) and (12) of section 38a-469 delivered, issued for delivery, amended or renewed in this state on or after January 1, 2009, shall provide that coverage of a child shall terminate no earlier than the policy anniversary date on or after whichever of the following occurs first, the date on which the child marries, or attains the age of twenty-six as long as the child is a resident of the state except for full-time attendance at an out-of-state accredited institution of higher education or resides out of state with a custodial parent pursuant to a child custody determination, as defined in section 46b-115a."

      (P.A. 82-143; P.A. 90-243, S. 87; P.A. 07-185, S. 16; June Sp. Sess. P.A. 07-2, S. 64, 69.)

      History: P.A. 90-243 substituted reference to health insurance policies for reference to hospital or medical expense policies and contracts and specified applicability solely to individual policies; Sec. 38-174r transferred to Sec. 38a-497 in 1991; P.A. 07-185 prohibited termination of coverage of a child prior to the policy anniversary date on or after the earliest of the date on which the child marries, ceases to be a resident of the state or attains the age of 26, for any policy delivered, issued for delivery, amended or renewed on or after October 1, 2007, effective July 1, 2007; June Sp. Sess. P.A. 07-2 changed effective date of P.A. 07-185, S. 16 to January 1, 2009, effective June 26, 2007, and applied provisions to policies delivered, issued for delivery, amended or renewed in this state on or after January 1, 2009, and made provisions allowing children to maintain coverage until age 26 contingent upon children remaining state residents, except for full-time attendance at an out-of-state accredited institution of higher education or residency with a custodial parent pursuant to a child custody determination, effective January 1, 2009.

      Sec. 38a-497a. Group coverage and benefits of a noncustodial parent. National Medical Support Notice. Notification of new employer by IV-D agency. Notification to parent. Enrollment of child. (a) As used in this section (1) "insurer" shall have the same meaning as "insurer", as defined in 42 USC S 1396g-l(b), as including a group health plan, as defined in 29 USC S 1167(1), an employee welfare benefit plan providing medical care to participants or beneficiaries directly or through insurance reimbursement, or otherwise, a health maintenance organization and an entity offering a service benefit plan, and (2) "NMSN" means a National Medical Support Notice issued in a Title IV-D support case pursuant to section 46b-88.

      (b) If a child has health insurance coverage through an insurer of a noncustodial parent, s