ENGROSSED SENATE
BILL NO. 1616 	By:	Crain of the Senate

			and

		Cox of the House

[ insurance - State Insurance Commissioner Revolving Fund - creating fund - defining terms - authorizing penalties – codification - effective date -		emergency ]

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 7101 of Title 36, unless there is created a duplication in numbering, reads as follows:
A.  The Legislature finds that a mechanism to provide long-term funding is necessary to reduce the negative effects of uninsured Oklahomans on the economy and the state.  This mechanism will stabilize the insurance market by providing improved access to health insurance for lower income, uninsured Oklahomans.
B.  There is hereby created a mechanism of funding through health carrier access payments, as defined in Section 2 of this act, in order to establish a long-term source of funding to provide access to health insurance for uninsured Oklahomans.
C.  There is hereby created in the State Treasury a revolving fund for the Insurance Department called the “Health Carrier Access Payment Revolving Fund”.  The revolving fund shall be used to fund the principal state program aiming to provide access to health insurance to uninsured Oklahomans and to maximize the ability of the state to secure all possible federal funds, grants or matching funds.
1.  The revolving fund shall consist of funds that are collected and received by health carriers pursuant to Section 3 of this act, which shall be deposited by the Insurance Commissioner into the revolving fund.
2.  The revolving fund shall be a continuing fund, not subject to fiscal year limitations.  Expenditures from the revolving fund shall be made pursuant to the laws of this state and the statutes relating to the principal state program aiming to provide access to health insurance to uninsured Oklahomans.  Warrants for expenditures from the revolving fund shall be drawn by the State Treasurer, based on claims signed by an authorized employee or employees of the Insurance Department and filed with the Director of State Finance.
D.  All funds collected by the Insurance Commissioner shall be paid into the State Treasury weekly.
E.  All monies collected by the Oklahoma Insurance Commissioner pursuant to this act shall be used and expended by the Insurance Commissioner for the sole purpose of providing access to certified and affordable health insurance for uninsured Oklahomans either as individuals or employees of small employers.
F.  Expenditures of funds collected from health carrier access payments shall be made only upon written orders issued by the Insurance Commissioner.  The funds shall be used to provide grants to maximize the ability of the state to secure any or all federal matching funds and grants to provide access to affordable health insurance to individuals or employees of small employers.  No monies collected from health carriers as access payments shall be expended for any wage or salary of any employee of any state agency and shall not provide any general or administrative funding for the state or any of its agencies, except for reasonable expenses incurred for the express purposes and administration of the fund.
G.  The Insurance Commissioner shall post monthly on the website of the Insurance Department a report detailing the expenditures from the Health Carrier Access Revolving Fund.  The report may include, but not be limited to:
1.  An accounting of the monthly revenues and expenditures;
2.  The amount of grants or federal matching dollars received;
3.  The number of Oklahomans that have acquired health insurance through the state program; and
4.  The number of Oklahomans that maintain health insurance through the state program.
H.  The Insurance Commissioner shall annually account to the State Auditor and Inspector for all monies or property received or expended pursuant to this section.
SECTION 2.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 7102 of Title 36, unless there is created a duplication in numbering, reads as follows:
As used in this act:
1.  “Access payments” means an amount paid to the Insurance Commissioner based upon a percentage of claims paid by a health carrier to be used for the purpose of providing a continuous funding source to provide access to health insurance for uninsured Oklahomans.
2.  “Claims paid” means all payments made by a health carrier for health and medical services for residents of this state.  “Claims paid” shall not include:
a.	claims-related expenses and general administrative expenses,
b.	payments made to qualifying providers under a “pay for performance” or other incentive compensation arrangement if the payments are not reflected in the processing of claims submitted for services rendered to specific covered individuals,
c.	claims paid by health carriers with respect to accidental injury, specified disease, hospital indemnity, dental, vision, disability income, long-term care, Medicare supplement or other limited benefit health insurance, except claims paid for dental services covered under a medical policy,
d.	claims paid for services rendered to nonresidents of this state,
e.	claims paid under retiree health benefit plans that are separate from and not included within benefit plans for existing employees,
f.	claims paid by an employee benefit excess insurance carrier that have been counted by a third-party administrator for determining an access payment,
g.	claims paid for services rendered to a person covered under a benefit plan for federal employees,
h.	claims paid for services rendered outside of this state to a person who is a resident of this state, and
i.	claims paid pursuant to Medicare or Medicaid;
3.  “Claims-related expenses” means:
a.	payments for utilization review, care management, disease management, risk assessment and similar administrative services intended to reduce the claims paid for health and medical services rendered to cover individuals for the purposes of attempting to ensure that needed services are delivered in an efficacious manner or by helping to maintain or improve the health of a covered individual, and
b.	payments made to or by organized groups of providers of health and medical services in accordance with managed care risk arrangements or network access agreements that are unrelated to the provision of services to specific covered individuals;
4.  “Health and medical services” means, but is not limited to:
a.	any services included in the furnishing of medical care,
b.	dental care to the extent covered under a medical insurance policy,
c.	pharmaceutical benefits or hospitalization, including, but not limited to, services provided in a hospital or other medical facility,
d.	ancillary services, including, but not limited to, ambulatory services,
e.	physician and other practitioner services, including, but not limited to, services provided by an assistant to a physician, nurse practitioner or midwife, and
f.	behavioral health services, including, but not limited to, mental health and substance abuse services;
5.  “Health carrier” means any entity or insurer authorized to provide health insurance or health benefits pursuant to the laws of this state and any entity or person engaged in the business of making contracts of accident or health insurance.  “Health carrier” includes, but is not limited to:
a.	third-party administrators as provided for in Sections 1441 through 1452 of Title 36 of the Oklahoma Statutes,
b.	health maintenance organizations as provided for in Sections 6901 through 6936 of Title 36 of the Oklahoma Statutes,
c.	self-insured employer welfare arrangements,
d.	excess carriers,
e.	stop loss carriers,
f.	multiple employer welfare arrangements (MEWA) as provided for in Sections 633 through 650 of Title 36 of the Oklahoma Statutes,
g.	professional employer organizations (PEO), and
h.	the Oklahoma State and Education Employees Group Insurance Board (OSEEGIB); and
6.  “Insurance Commissioner” or “Commissioner” means the Oklahoma Insurance Commissioner.
SECTION 3.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 7103 of Title 36, unless there is created a duplication in numbering, reads as follows:
A.  All health carriers shall pay to the Insurance Commissioner an access payment of one-half of one percent (0.5%) on all claims paid in addition to the requirements provided for in subsection B of this section.
B.  Each time the Insurance Commissioner certifies that the enrollment in the principal state program aiming to provide access to insurance for uninsured Oklahomans has reached seventy-five percent (75%) of the total possible enrollment of eligible persons in the program at that point in time, the access payment paid by all health carriers pursuant to this act shall increase one-half of one percent (0.5%).  The maximum health carrier access payment shall not exceed four percent (4.0%).
C.  If a health carrier is contractually entitled to withhold certain amounts from payments due to providers of health and medical services for the purpose of ensuring that providers fulfill any financial obligations under a managed care risk arrangement, the full amounts due to the providers before the application of the contractual withholdings shall be reflected in the calculation of claims paid.
SECTION 4.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 7104 of Title 36, unless there is created a duplication in numbering, reads as follows:
A.  Except as provided in Subsection B of this section, the access payments required to be paid by health carriers in Section 3 of this act shall be due and reported to the Insurance Commissioner on claims paid and incurred beginning the month after the first annual report is to be filed by the health carrier with the Insurance Commissioner after the effective date of this act.
B.  The access payments required in Section 3 of this act by a health carrier that is a third-party administrator or a self-insured employer shall be reported and paid on the basis of claims incurred and paid as of the first annual filing of the third-party administrator or self-insured employer with the Insurance Commissioner after the effective date of this act.
C.  Access payments shall be made monthly to the Insurance Commissioner and are due thirty (30) days after the end of each month, except that access payments for third-party administrators for groups of fifty (50) or fewer members may be made annually not less than sixty (60) days after the close of the plan year.
D.  The Insurance Commissioner may refuse to renew, suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any health carrier failing to pay an access payment.  In addition to failing to renew, suspension or revocation of the certificate of authority, the Insurance Commissioner may assess civil penalties in accordance with Section 619 of Title 36 of the Oklahoma Statutes against any health carrier failing to pay an access payment or may take any other enforcement action authorized by the Oklahoma Insurance Code to collect any unpaid access payments.
E.  Reasonable attorney fees shall be awarded to the Insurance Commissioner if judicial action is necessary for the enforcement of this act.  Fees shall be based upon those prevailing in the community.  Fees collected by the Insurance Commissioner without the assistance of the Attorney General shall be credited to the Health Carrier Access Revolving Fund.
F.  The Insurance Commissioner shall promulgate rules necessary for the implementation and administration of this act.
SECTION 5.     AMENDATORY     Section 1, Chapter 432, O.S.L. 2009 (36 O.S. Supp. 2009, Section 307.3), is amended to read as follows:
Section 307.3  A.  Effective July 1, 2009, there is hereby created in the State Treasury a revolving fund for the Insurance Commissioner called the State Insurance Commissioner Revolving Fund.  The revolving fund shall be used to fund the operations of the Office of the Insurance Commissioner.
1.  Notwithstanding any other law to the contrary, the revolving fund shall consist of and consolidate all funds that are or have been paid or collected by the Insurance Commissioner pursuant to the laws of this state and the rules of the Insurance Department except that the revolving fund shall not include:
a.	premium taxes,
b.	monies transferred to the Attorney General’s Insurance Fraud Unit Revolving Fund pursuant to Section 362 of this title, and
c.	funds paid to and collected pursuant to the Oklahoma Certified Real Estate Appraisers Act, Section 858-700 et seq. through 858-732 of Title 36 59 of the Oklahoma Statutes; and
d.	health carrier access payments paid to and collected by the Insurance Commissioner and deposited into the Health Carrier Access Payment Revolving Fund.
2.  The revolving fund shall be a continuing fund, not subject to fiscal year limitations.  Expenditures from the revolving fund shall be made pursuant to the laws of this state and the statutes relating to the Insurance Department.  Warrants for expenditures from the revolving fund shall be drawn by the State Treasurer, based on claims signed by an authorized employee or employees of the Insurance Department and filed with the Director of State Finance.
B.  All funds collected by the Insurance Commissioner shall be paid into the State Treasury weekly.
C.  The After the effective date of this act, the State Treasury is authorized and directed to deduct from the funds paid into or collected by the Insurance Commissioner Revolving Fund after the effective date of this section a sum equal to seventy-six and one half percent (76.5%) of such payment and place the same to the credit of the General Revenue Fund of the state.  The State Treasurer shall place to the credit of the State Insurance Commissioner Revolving Fund the remainder of said the funds so paid and or collected shall by the State Treasurer be placed to the credit of the State Insurance Commissioner Revolving Fund by the Insurance Commissioner.
SECTION 6.  This act shall become effective July 1, 2010.
SECTION 7.  It being immediately necessary for the preservation of the public peace, health and safety, an emergency is hereby declared to exist, by reason whereof this act shall take effect and be in full force from and after its passage and approval.
Passed the Senate the 1st day of March, 2010.

	
Presiding Officer 	of the Senate

Passed the House of Representatives the ____ day of __________, 2010.

	
Presiding Officer	of the House
	of Representatives