Bill Text: OR SB634 | 2011 | Regular Session | Enrolled
Bill Title: Relating to provider contracts for health care services; and declaring an emergency.
Sponsorship: Committee Bill
Status: (Passed) 2011-06-30 - Effective date, June 28, 2011. [SB634 Detail]
Download: Oregon-2011-SB634-Enrolled.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
Enrolled
Senate Bill 634
Sponsored by COMMITTEE ON HEALTH CARE, HUMAN SERVICES AND RURAL
HEALTH POLICY (at the request of Oregon Medical Association)
CHAPTER ................
AN ACT
Relating to provider contracts for health care services; and
declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in this section and sections 3 to 5 of
this 2011 Act:
(1)(a) 'Contracting entity' means any person that contracts
directly with a provider for the delivery of health care services
or contracts with a third party for the purpose of selling or
making available to the third party the provider's health care
services or discounted rates or the services or rates of a
provider panel under a provider network contract.
(b) 'Contracting entity' includes a person under common
ownership and control of a contracting entity.
(c) 'Contracting entity' does not include:
(A) A managed care organization that is certified under ORS
656.260;
(B) A discount medical plan organization as defined in ORS
742.420;
(C) The state medical assistance program;
(D) An independent practice association; or
(E) A self-funded, employer-sponsored health insurance plan
regulated under the Employee Retirement Income Security Act of
1974, as codified and amended at 29 U.S.C. 1001, et seq., or any
person that provides only administrative services to the
self-funded employer-sponsored health insurance plan.
(2) 'Health care services' means the treatment of humans for
bodily injury, disablement or death by accidental means or as a
result of sickness or childbirth, or in prevention of sickness,
but does not include treatment for bodily injury, disablement or
occupational diseases incurred as a result of employment.
(3) 'Independent practice association' has the meaning given
that term in ORS 743.801.
(4) 'Person' has the meaning given that term in ORS 731.116.
(5)(a) 'Provider' includes:
(A) A physician as defined in ORS 677.010.
(B) A physician group, independent practice association,
physician-controlled organization, hospital organization or other
provider organization that contracts with a provider for the
purpose of facilitating the provider's participation in a
provider network contract.
Enrolled Senate Bill 634 (SB 634-A) Page 1
(C) A person licensed, certified or otherwise authorized or
permitted by the laws of this state to administer medical
services or mental health services in the ordinary course of
business or practice of a profession.
(b) 'Provider' does not include a contracting entity.
(6) 'Provider network contract' means a contract between a
provider and a contracting entity for the provision of health
care services to patients other than Medicare enrollees or
medical assistance recipients.
(7)(a) 'Third party' means a person that enters into a contract
with a contracting entity or with another party, other than a
provider, for the right to exercise the rights of the contracting
entity under a provider network contract.
(b) 'Third party' includes any of the following:
(A) A payer that directly reimburses the cost of the delivery
of health care services;
(B) A third party administrator or other entity that
administers or processes claims on behalf of a payer;
(C) A preferred provider organization or network;
(D) A physician-controlled organization or a hospital
organization; or
(E) An entity that is engaged in the electronic transmission of
claims between a contracting entity and a payer and does not
provide to another party access to the health care services and
discounted rates of a provider.
(c) 'Third party' does not include:
(A) Entities offering health care services under the same brand
pursuant to a brand licensing agreement with the same licenser;
or
(B) A self-funded, employer-sponsored health insurance plan
regulated under the Employee Retirement Income Security Act of
1974, as codified and amended at 29 U.S.C. 1001, et seq., or any
person that provides only administrative services to the
self-funded employer-sponsored health insurance plan. + }
SECTION 2. { + Section 3 of this 2011 Act is added to and made
a part of the Insurance Code. + }
SECTION 3. { + (1) A contracting entity that does not have a
certificate of authority shall register with the Department of
Consumer and Business Services as a contracting entity by
submitting the following information to the department in written
or electronic form as prescribed by the department along with any
fee prescribed by the department:
(a) The official name of the entity and any secondary,
alternative or substitute designations.
(b) The mailing address and telephone number of the
headquarters of the entity.
(c) The name and telephone number of a representative of the
entity who shall serve as the primary contact for the department.
(2) The requirements of this section do not apply to a
contracting entity that is under common ownership and control of
a contracting entity that is licensed by or has a certificate of
authority from the department. + }
SECTION 4. { + (1) A contracting entity or a third party may
not contract with another third party to provide access to the
health care services and discounted rates of a provider under a
provider network contract unless:
(a) The third party contract is specifically authorized by the
provider network contract; and
Enrolled Senate Bill 634 (SB 634-A) Page 2
(b) The third party contract obligates the third party to
comply with all applicable terms, limitations and conditions of
the provider network contract.
(2) A contracting entity that provides access to the health
care services and discounted rates of a provider under a provider
network contract shall:
(a) Give to the provider in writing or electronically, at the
time a provider network contract is entered into, a list of all
third parties known by the contracting entity at the time to
which the contracting entity has or will provide access to the
health care services and discounted rates of a provider under the
provider network contract;
(b) Maintain an Internet website, toll-free telephone number or
other readily available mechanism through which a provider may
obtain a list, updated at least every 90 days, of all third
parties that have access to the provider's health care services
and discounted rates under the provider network contract;
(c) Provide each third party listed under paragraph (a) or (b)
of this subsection with information necessary to enable the third
party to comply with all relevant terms, limitations and
conditions of the provider network contract;
(d) Require a third party to identify on each remittance or
explanation of payment sent to a provider the source of any
contractual discount in rates taken by the third party under the
provider network contract; and
(e)(A) Notify each third party listed under paragraph (a) or
(b) of this subsection of the termination of the provider network
contract no later than 30 days prior to the effective date of the
termination; and
(B) Require third parties to cease claiming entitlement to
discounted rates or other rights under a provider network
contract after the termination of the contract.
(3) The notice required under subsection (2)(e)(A) of this
section can be provided by any reasonable means, including but
not limited to written notice, electronic communication or an
update to an electronic database.
(4) Subject to any applicable continuity of care requirements,
agreements or contractual provisions:
(a) A third party's right to access a provider's health care
services and discounted rates under a provider network contract
shall terminate on the date the provider network contract is
terminated;
(b) Claims for health care services performed after the
termination date of the provider network contract are not
eligible for processing and payment in accordance with the
provider network contract; and
(c) Claims for health care services performed before the
termination date of the provider network contract, but processed
after the termination date, are eligible for processing and
payment in accordance with the provider network contract.
(5)(a) All information made available to a provider in
accordance with the requirements of this section and section 5 of
this 2011 Act shall be confidential and may not be disclosed to
any person not involved in the provider's practice or the
administration thereof without the prior written consent of the
contracting entity.
(b) This section and section 5 of this 2011 Act may not be
construed to prohibit a contracting entity from requiring a
provider to execute a reasonable confidentiality agreement to
ensure that confidential or proprietary information disclosed by
Enrolled Senate Bill 634 (SB 634-A) Page 3
the contracting entity is not used for any purpose other than the
provider's direct practice management or billing activities. + }
SECTION 5. { + (1) A contract between a third party and a
contracting entity or between two third parties with respect to a
provider network contract must comply with this section and
section 4 of this 2011 Act.
(2)(a) A third party shall inform the contracting entity and
providers under a contracting entity's provider network contract
of a website, toll-free number or other readily available
mechanism to identify the names of all third parties to which the
third party provides access to the health care services and
discounted rates of a provider under the provider network
contract.
(b) The third party shall update the website described in
paragraph (a) of this subsection at least every 90 days to
reflect all third parties currently provided access. Upon
request, the third party shall make the information available to
a provider via telephone or through direct notification.
(3) A provider may refuse to accept as payment in full a
discounted payment made by a third party under the terms of a
provider network contract if there is no valid contractual basis
for the discount or the discount is taken in violation of this
section or section 4 of this 2011 Act. + }
SECTION 6. { + Sections 1 to 5 of this 2011 Act become
operative January 1, 2012, and apply to contracts entered into or
renewed on or after January 1, 2012. + }
SECTION 7. { + The Department of Consumer and Business
Services may take any action prior to the operative date
specified in section 6 of this 2011 Act that is necessary to
allow the department to carry out the provisions of sections 1 to
5 of this 2011 Act on and after the operative date specified in
section 6 of this 2011 Act. + }
SECTION 8. { + This 2011 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2011 Act takes effect on its
passage. + }
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Passed by Senate May 19, 2011
.............................................................
Robert Taylor, Secretary of Senate
.............................................................
Peter Courtney, President of Senate
Passed by House June 17, 2011
.............................................................
Bruce Hanna, Speaker of House
.............................................................
Arnie Roblan, Speaker of House
Enrolled Senate Bill 634 (SB 634-A) Page 4
Received by Governor:
......M.,............., 2011
Approved:
......M.,............., 2011
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2011
.............................................................
Kate Brown, Secretary of State
Enrolled Senate Bill 634 (SB 634-A) Page 5
