Missouri Statute | Act | Code |Corporations, Associations And Partnerships| US Code - US Statute | Chapter 354 Health Services Corporations--health Maintenance Organizations

USA Statutes : missouri
Title : CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS
Chapter : Chapter 354 Health Services Corporations--Health Maintenance Organizations

As used in sections 354.010 to 354.380, unless the context
clearly indicates otherwise, the following terms mean:

(1) "Corporation", a domestic health services corporation subject to the
provisions of sections 354.010 to 354.380;

(2) "Director", the director of the department of insurance of the state
of Missouri;

(3) "Health services", the health care and services provided by
hospitals, or other health care institutions, organizations, associations
or groups, and by doctors of medicine, osteopathy, dentistry,
chiropractic, optometry and podiatry, nursing services, medical
appliances, equipment and supplies, drugs, medicines, ambulance services,
and other therapeutic services and supplies;

(4) "Health services corporation", any not-for-profit corporation
heretofore or hereafter organized or operating for the purposes of
establishing and operating a nonprofit plan or plans under which prepaid
hospital care, medical-surgical care and other health care and services,
or reimbursement therefor, may be furnished to a member or beneficiary;

(5) "Member" or "beneficiary", a natural person who is entitled to
receive health services, or reimbursement therefor, pursuant to a
contract made by a health services corporation with or for the benefit of
such person;

(6) "Membership contract", any agreement, contract or certificate by
which a health services corporation describes the health services or
benefits to be provided thereunder to its members or beneficiaries;

(7) "Not-for-profit corporation", a nonprofit domestic corporation
organized under or accepting the provisions of chapter 355, RSMo, or
incorporated under chapter 352, RSMo. (L. 1973 S.B. 3 § 1, A.L. 1983 H.B.
127)

All health services corporations heretofore or hereafter
organized shall be subject to the provisions of sections 354.010 to
354.380, to the provisions of the other laws of this state which are
specifically designated in sections 354.010 to 354.380, and to the
provisions of any other laws of this state relating to insurance which
specifically state they shall apply to health services corporations. The
provisions of this act* shall not apply to any labor organization's
health plan providing services established and maintained solely for its
members and their dependents, and facilities of not-for-profit
corporations in existence on October 1, 1980, subject either to the
provisions and regulations of section 302 of the Labor-Management
Relations Act, 29 U.S.C. 186 or the Labor-Management Reporting and
Disclosure Act, 29 U.S.C. 401-538. (L. 1973 S.B. 3 § 2, A.L. 1981 S.B.
185, A.L. 1983 H.B. 127)

*"This act" (H.B. 127, 1983) contained numerous sections. Consult
Disposition of Sections table for a definitive listing.

(1985) The provisions of this section which are in irreconcilable
conflict with the provisions of section 375.947, RSMo, are held to be
impliedly repealed. The health services corporation may not refuse
reimbursement for treatment of a covered illness or injury merely because
the health care provider was a chiropractor. Klinginsmith v. Mo. Dept. of
Consumer Affairs (A.), 693 S.W.2d 226.

1. Any health services corporation heretofore organized under
the provisions of either chapter 352 or chapter 355, RSMo, shall amend
its articles of incorporation to comply with the provisions of sections
354.010 to 354.380 for organization, and for issuance of a certificate of
incorporation and of a certificate for authority to do business.

2. After completion of the actions provided in subsection 1 and the
issuance of the required certificates, the corporation shall be a
corporation organized under sections 354.010 to 354.380 and shall be
entitled to all the rights, privileges and benefits and shall be subject
to all the obligations, duties and liabilities provided in sections
354.010 to 354.380. (L. 1973 S.B. 3 § 3, A.L. 1983 H.B. 127)

A health services corporation may be organized for the purposes
of establishing and operating a voluntary, nonprofit plan or plans under
which hospital care, medical-surgical care, and other health care and
services, or reimbursement therefor, may be furnished to persons who
become members or beneficiaries; of acting as agent or intermediary for
other health services corporations, for any governmental body or agency,
or for other corporations, associations, partnerships or individuals in
the field of health care and services; and of research, education or
related activity to further objects within the purview of sections
354.010 to 354.380. (L. 1973 S.B. 3 § 4, A.L. 1983 H.B. 127)

A health services corporation which provides its members or
beneficiaries with coverage for certain services, or reimbursement
therefor, shall provide such coverage or reimbursement in all situations
in which the covered service is performed by a person duly licensed to
perform such service. No health services corporation may discriminate in
its coverage or reimbursement amounts for covered services among persons
duly licensed to provide such covered services. The provisions of this
section shall not apply to any federally qualified health maintenance
organization. This section shall apply to all contracts issued or renewed
on or after January 1, 1984. This section shall apply only to persons
duly licensed as physicians, surgeons, optometrists, chiropractors,
dentists, psychologists, pharmacists, pharmacies, or podiatrists, as
defined by and in accordance with the statutes of the state of Missouri.
(L. 1983 H.B. 127, A.L. 1993 H.B. 709)

No group, association or organization created for or engaged in
business or activity for profit, provision for the incorporation of which
is made by any of the corporation laws of this state, shall be organized
or operate, directly or indirectly, as a health services corporation
under sections 354.010 to 354.380. (L. 1973 S.B. 3 § 5, A.L. 1983 H.B.
127)

A health services corporation may be organized in the manner
provided for the organization of a general not-for-profit corporation in
chapter 355, RSMo, by filing articles of incorporation in triplicate in
the office of the secretary of state. One copy of the articles of
incorporation shall be forwarded by the secretary of state to the
director. If the secretary of state finds that the purposes stated in the
articles of incorporation are within the purview of, and limited to the
purposes authorized by, section 354.025, and that such articles otherwise
conform to law, he shall, when all fees and charges have been paid, file
one of such triplicate originals in his office and issue a certificate of
incorporation to which he shall affix the other triplicate original. The
certificate of incorporation and copy of articles of incorporation shall
be delivered by the secretary of state to the incorporators. (L. 1973
S.B. 3 § 6, A.L. 1983 H.B. 127)

In addition to the contents required or permitted by chapter
355, RSMo, the articles of incorporation of a health services corporation
shall comply with the following:

(1) The name of the corporation shall not include the words "insurance",
"casualty", "surety", "mutual", or any other words descriptive of the
insurance, casualty or surety business;

(2) The corporate name of any corporation to be formed under sections
354.010 to 354.380 shall not be the same as, or deceptively similar to,
the name of any other corporation authorized to do business in this state;

(3) The statement of purposes shall be in conformity with the provisions
of sections 354.010 to 354.380;

(4) Any such corporation organized prior to September 28, 1973, whose
existing articles of incorporation shall not be in substantial conformity
with sections 354.010 to 354.380, shall adopt and file, as provided in
sections 354.010 to 354.380, such amendments to its articles as are
necessary to effect substantial compliance with sections 354.010 to
354.380. (L. 1973 S.B. 3 § 7, A.L. 1983 H.B. 127)

Upon the issuance of the certificate of incorporation by the
secretary of state, the corporate existence shall begin, and such
certificate of incorporation shall be conclusive evidence, except against
the state, that all conditions precedent required to be performed by the
incorporators have been complied with and that the corporation has been
incorporated under sections 354.010 to 354.380. (L. 1973 S.B. 3 § 8, A.L.
1983 H.B. 127)

The corporation shall have all the powers, rights and privileges
of a corporation organized under chapter 355, RSMo, except insofar as
such provisions are inconsistent with the provisions of sections 354.010
to 354.380, but it shall not commence its business or operations until it
receives authority to do so from the director of insurance, as provided
in section 354.055. (L. 1973 S.B. 3 § 9, A.L. 1983 H.B. 127)

No corporation subject to the provisions of this chapter shall
commence operations or transact any business in this state unless it
shall first procure from the director of insurance a certificate of
authority stating that the requirements of the laws of this state have
been complied with and authorizing it to do business. The certificate of
authority shall expire on the last day of June in each year, but shall be
extended automatically pending formal renewal by the director, if the
corporation has continued to comply with the provisions of sections
354.010 to 354.380 and of the laws of this state. (L. 1973 S.B. 3 § 10,
A.L. 1983 H.B. 127)

1. The director of the department of insurance shall determine
that all the requirements of sections 354.010 to 354.380 for commencement
of business have been complied with, and upon such determination shall
issue to the corporation a certificate of authority to do business as a
health services corporation under sections 354.010 to 354.380.

2. The director shall not issue or renew his certificate of authority to
any corporation operating or proposing to operate under the provisions of
sections 354.010 to 354.380, unless such corporation shall be in
compliance with all the requirements of sections 354.010 to 354.380. (L.
1973 S.B. 3 § 11, A.L. 1983 H.B. 127)

1. A corporation may amend its articles of incorporation from
time to time in the manner provided in chapter 355, RSMo, and shall file
a duly certified copy of its certificate of amendment with the director
of insurance within twenty days after the issuance of the certificate of
amendment by the secretary of state. Upon the issuance of the certificate
of amendment by the secretary of state, the amendment shall become
effective and the articles of incorporation shall be deemed to be amended
accordingly.

*2. A health services corporation organized as a not-for-profit
corporation pursuant to this chapter may amend its articles in the manner
provided in chapter 355, RSMo, to change its status to that of a
for-profit business corporation and accept the provisions of chapter 351,
RSMo, by:

(1) Adopting a resolution amending its articles of incorporation or
articles of agreement so as:

(a) To eliminate any purpose, power or other provision thereof not
authorized to be set forth in the articles of incorporation of
corporations organized pursuant to chapter 351, RSMo;

(b) To set forth any provision authorized pursuant to chapter 351, RSMo,
to be inserted in the articles of incorporation of corporations organized
pursuant to chapter 351, RSMo, which the corporation chooses to insert
therein and the material and information required to be set forth
pursuant to chapter 351, RSMo, in the original articles of incorporation
of corporations organized pursuant to chapter 351, RSMo;

(2) Adopting a resolution accepting all of the provisions of chapter 351,
RSMo, and providing that such corporation shall for all purposes be
thenceforth deemed to be a corporation organized pursuant to chapter 351,
RSMo;

(3) By filing with the secretary of state a certificate of acceptance of
chapter 351, RSMo;

(4) By complying with the provisions of sections 355.616 and 355.621,
RSMo, to the extent those sections would apply if such health services
corporation were merging with a domestic business corporation with the
proposed amended articles of incorporation serving as the proposed plan
of merger.

3. The provisions of subsection 2 of this section shall expire and have
no force and effect on and after August 31, 2001. (L. 1973 S.B. 3 § 12,
A.L. 1998 S.B. 680, A.L. 1999 S.B. 1, et al., A.L. 2000 S.B. 896)

*Subsection 2 expires 8-31-01

When the annual statement of a corporation subject to the
provisions of sections 354.010 to 354.380 is filed and all fees due from
the corporation are tendered, the corporation's certificate of authority
to do business in this state shall automatically be extended pending
formal renewal by the director, or until such time as he should refuse to
renew the certificate. (L. 1973 S.B. 3 § 13, A.L. 1983 H.B. 127)

No corporation subject to the provisions of sections 354.010 to
354.380 shall be permitted to do business in this state unless it shall
have a paid-in capital or guaranty fund of not less than one hundred and
fifty thousand dollars, in addition to the reserves required in sections
354.010 to 354.380. The surplus and guaranty fund shall be placed and
held on joint deposit with the director for the protection of all
subscribers, members and beneficiaries. (L. 1973 S.B. 3 § 14, A.L. 1983
H.B. 127)

The corporation shall maintain at all times reserves adequate to
provide the hospital, medical-surgical and other health services made
available to its members and beneficiaries and to meet all its costs and
expenses. The reserves shall not be less than an amount equal to two
months of benefit payments and administrative expenses, based on an
average of the preceding twelve months, or if the reserves are not equal
to such average, they must have been increased during the preceding
twelve months by an amount equal to one percent of the gross dues income
during such period. The determination of minimum reserves hereunder shall
be subject, as to amounts payable to participating providers of the
health services, to any right of the corporation to prorate the amounts
under the terms of its health service contracts with providers. The
director may decrease or suspend the requirements of this section if he
finds that such action would be in the best interest of the members of
the corporation. (L. 1973 S.B. 3 § 15)

No corporation subject to the provisions of sections 354.010 to
354.380 shall deliver or issue for delivery in this state a form of
membership contract, or any endorsement or rider thereto, until a copy of
the form shall have been approved by the director. The director shall not
approve any policy forms which are not in compliance with the provisions
of sections 354.010 to 354.380 of this state, or which contain any
provision which is deceptive, ambiguous or misleading, or which do not
contain such words, phraseology, conditions and provisions which are
specific, certain and reasonably adequate to meet needed requirements for
the protection of those insured. If a policy form is disapproved, the
reasons therefor shall be stated in writing; a hearing shall be granted
upon such disapproval, if so requested; provided, however, that such
hearing shall be held no sooner than fifteen days following the request.
The failure of the director of insurance to take action approving or
disapproving a submitted policy form within forty-five days from the date
of filing shall be deemed an approval thereof. The director shall not
disapprove any deemed policy form for a period of twelve months
thereafter. If at any time during that twelve- month period the director
determines that any provision of the deemed policy form is contrary to
state law, the director shall notify the health services corporation of
the specific provision that is contrary to state law, and any specific
statute to which the provision is contrary to, and request that the
health services corporation file, within thirty days of receipt of the
request, an amendment form that modifies the provision to conform to
state law. Upon approval of the amendment form by the director, the
health services corporation shall issue a copy of the amendment to each
individual and entity to which the deemed policy form was previously
issued and shall attach a copy of the amendment to the deemed policy form
when it is subsequently issued. Such amendment shall have the force and
effect as if the amendment was in the original filing or policy. The
director of insurance shall have authority to make such reasonable rules
and regulations concerning the filing and submission of such policy forms
as are necessary, proper or advisable. (L. 1973 S.B. 3 § 16, A.L. 1983
H.B. 127, A.L. 2003 H.B. 121)

1. A corporation subject to the provisions of sections 354.010
to 354.380 may enter into contracts for the rendering of hospital
services, medical-surgical services and other health services on behalf
of its members or beneficiaries with hospitals maintained by any
governmental body or agency, or maintained by a nonprofit corporation
organized for hospital purposes, or with other corporations,
organizations, associations, partnerships or individuals furnishing
hospital services, medical-surgical services, or other health services.
Any health services corporation may enter into agreements or contracts
with other organizations or corporations licensed to do business in this
state or in any other state for the transfer of members or beneficiaries,
for the reciprocal joint provisions of benefits to the members or
beneficiaries of the corporation and of such other organizations or
corporations, or for such other joint undertakings as the corporation's
board of directors may approve.

2. In lieu of direct payment from an insured for goods or services
furnished, a pharmacist may take an assignment of such insured's right to
reimbursement for those goods or services provided to a member of a
health services corporation. No health services corporation may refuse to
pay the pharmacist any payment due the insured under the terms of the
policy or contract. (L. 1973 S.B. 3 § 17, A.L. 1983 H.B. 127)

1. A corporation subject to the provisions of sections 354.010
to 354.380 may, in the discretion of its board of directors, limit or
define the classes of persons who shall be eligible to become members or
beneficiaries, limit and define the benefits which it will furnish, and
may define such benefits as it undertakes to furnish into classes or
kinds. It may make available to its members or beneficiaries such health
services, or reimbursement therefor, as the board of directors of any
such corporation may approve; if maternity benefits are provided to any
members of any plan, then maternity benefits shall be provided to any
member of such plan without discrimination as to whether the member is
married or unmarried, and if maternity benefits are provided to a
beneficiary of any plan, then maternity benefits shall be provided to
such beneficiary of such plan without discrimination as to whether the
beneficiary is married or unmarried.

2. If an ambulatory surgical facility as defined by subdivision (1) of
section 197.200, RSMo, has received a certificate of need as provided in
chapter 197, RSMo, a health services corporation shall provide benefits
to the facility on the same basis as it does to all other health care
facilities, whether contracting members or noncontracting members. A
health services corporation shall use the same standards that are applied
to any other health care facility within the same health services area in
defining the benefits that the corporation will furnish to the ambulatory
surgical facility, the classes to which such benefits will be furnished,
and the amount of reimbursement. (L. 1973 S.B. 3 § 18, A.L. 1981 S.B.
185, A.L. 1983 H.B. 127)

All corporations subject to the provisions of sections 354.010
to 354.380 shall make and file annually with the director on or before
the first day of March of each year a report under oath upon a form to be
prescribed by the director setting forth:

(1) The name of the corporation;

(2) The address of its registered office in this state and the name of
its registered agent at such address;

(3) The names and addresses of its directors and officers;

(4) A brief statement of the character of the affairs which the
corporation is actually conducting;

(5) The amount of all dues or fees collected in this state or from
residents thereof with respect to members or beneficiaries in the last
calendar year, the amounts actually paid during such year for health
services for the members or beneficiaries, and the amounts placed in
reserves;

(6) A financial report for the most recent fiscal year of the
corporation, prepared by an officer of the corporation or by a certified
public accountant;

(7) A statement of any other facts or information concerning the affairs
of the health services corporation which may be required reasonably by
the director. (L. 1973 S.B. 3 § 20, A.L. 1983 H.B. 127)

Any individual member of a corporation subject to the provisions
of sections 354.010 to 354.380 who believes himself to be aggrieved by
any act or omission of such corporation or its officers, directors, or
employees may file a statement in writing of his grievance in the office
of the director, and the director may make such investigation of such
grievance as he deems appropriate. No such investigation by the director
shall act as a bar to any suit in a court of competent jurisdiction
instituted by any such member, or as a bar to any defense thereto by the
corporation involved. (L. 1973 S.B. 3 § 22, A.L. 1983 H.B. 127)

The director may promulgate such reasonable rules and
regulations not inconsistent with the provisions of sections 354.010 to
354.380 as he shall deem necessary for its proper administration,
pursuant to the provisions of this section and chapter 536, RSMo. No rule
or portion of a rule promulgated under the authority of this chapter
shall become effective unless it has been promulgated pursuant to the
provisions of section 536.024, RSMo. (L. 1973 S.B. 3 § 23, A.L. 1983 H.B.
127, A.L. 1993 S.B. 52, A.L. 1995 S.B. 3)

A health services corporation shall not be liable for injuries
resulting from neglect, misfeasance, malfeasance or malpractice on the
part of any person, organization, agency or corporation rendering health
services to the health services corporation's members and beneficiaries.
(L. 1973 S.B. 3 § 24)

Every health services corporation shall be exempt from all taxes
with respect to its membership dues or fees and other income, and shall
be exempt from all franchise taxes and license fees except as otherwise
specified in sections 354.010 to 354.380. (L. 1973 S.B. 3 § 25, A.L. 1983
H.B. 127)

Any dissolution, liquidation, or rehabilitation of a corporation
subject to the provisions of sections 354.010 to 354.380 shall be
instituted and carried out pursuant to the provisions of chapter 355,
RSMo, to the extent that the same are not inconsistent with the
provisions of sections 354.010 to 354.380. (L. 1973 S.B. 3 § 27, A.L.
1983 H.B. 127)

Every final administrative action or decision of the director
under sections 354.010 to 354.380 shall be subject to judicial review
under and in accordance with the administrative procedure and review law
of this state, chapter 536, RSMo. (L. 1973 S.B. 3 § 28, A.L. 1983 H.B.
127)

Every health services corporation subject to the provisions of
sections 354.010 to 354.380 shall pay the following fees to the director
of insurance for enforcement of the provisions of this chapter: Issuance
of certificate of authority ................... $150.00 Filing articles
of amendment ........................... $ 20.00 Filing each annual
statement ........................... $100.00 Filing articles of
acceptance and issuing a

certificate of acceptance .......................... $ 20.00 Filing any
other statement or report .................... $ 1.00 For a certified
copy of any document or

other paper filed in the office of the director,

per page .............................................. $.35 For the
certificate and for affixing the seal

thereto ............................................ $ 10.00 For filing
statement and pertinent admission

papers required of a foreign health

services corporation ............................... $200.00 For copies
of papers, records and documents filed

in the office of the director, an amount not

to exceed, at the director's discretion ............. $ 1.00

per page For each service of process upon the director, on

behalf of the health services corporation ...........$ 10.00 (L. 1973
S.B. 3 § 29, A.L. 1983 H.B. 127, A.L. 1993 H.B. 709)

Premiums, dues or fees made by each corporation shall be subject
to the following provisions:

(1) Premiums, dues or fees shall not be excessive or inadequate, as
herein defined, nor shall they be unfairly discriminatory;

(2) No premiums, dues or fees shall be held to be excessive unless such
premiums, dues or fees are unreasonably high relative to the
corporation's loss experience under policies, plans or contracts with
respect to the territory or classification to which such premiums, dues
or fees are applicable;

(3) No premiums, dues or fees shall be held to be inadequate unless such
premiums, dues or fees are unreasonably low for the coverage provided and
the continued use of such premiums, dues or fees endangers the solvency
of the corporation using the same;

(4) If the director of the department of insurance has reason to believe
that any premiums, dues or fees do not meet the standards of this
section, he shall hold a public hearing in connection therewith,
provided* that within a reasonable period of time, which shall be not
less than ten days before the date of such hearing, he shall mail written
notice specifying the matters to be considered at such hearing to any
corporation believed by him not to be in compliance with the provisions
of this section;

(5) If the director, after such hearings, for good cause finds that such
premiums, dues or fees do not meet the provisions of this section, he
shall issue an order specifying in what respects any such premiums, dues
or fees fails to meet the provisions of this section and stating when,
within a reasonable period of time thereafter, the further use of such
premiums, dues or fees by the corporation which is the subject of the
examination shall be prohibited and a copy of such order shall be sent to
such corporation. (L. 1979 S.B. 93)

*Word "providing" appears in original rolls.

Nothing contained in sections 354.010 to 354.380 shall affect
the right to organize a corporation under chapter 352 or chapter 355,
RSMo, or the powers or rights of corporations organized pursuant thereto
which are not health services corporations. (L. 1973 S.B. 3 § 30, A.L.
1983 H.B. 127)

The provisions of sections 354.010 to 354.380 or of any law
relating to insurance shall not apply to any labor organization's health
plan providing services established and maintained solely for its members
and their immediate families, or to any health plan or services
established and maintained by a trust in which a labor organization is
interested as that term is defined in, and which trust is subject to the
provisions and regulations of, the Federal Labor-Management Reporting and
Disclosure Act, 29 U.S.C. 401-531. The administrator of any other plan or
program to provide health service or benefits, or to pay or indemnify for
the payment of their cost, which is maintained by any employer or jointly
by any employer and employees and/or labor organizations exclusively for
employees and their families, hereinafter referred to as "plan or
program", shall make and file annually with the director on or before the
first day of March of each year a report under oath, upon a form to be
prescribed by the director, setting out the income and expenses of the
plan or program for the preceding year and its financial condition as of
the end of that year. In lieu of filing such prescribed form the
administrator of any such plan or program may file with the director a
duplicate set of documents, records, reports, booklets and other
instruments as may have been filed by it within the preceding twelve
months pursuant to the Federal Welfare and Pension Plans Disclosure Act,
29 U.S.C. 301-309, the Federal Labor-Management Reporting and Disclosure
Act, 29 U.S.C. 151-168, 401-531 or the Labor Management Relations Act, 29
U.S.C. 186. Any labor organization member or any employee claiming to be
aggrieved under the terms of any such plan or program may file a
complaint with respect thereto with the director. The authority of the
director under the insurance laws of this state and sections 354.010 to
354.380 to prohibit or regulate such a plan or program shall be limited
to the following:

(1) Compelling the filing of the annual reports referred to above;

(2) Investigating the complaints of members or employees;

(3) Examining the financial conditions, affairs and management of the
plan or program;

(4) Instituting judicial proceedings to enjoin the continuation of any
act or practices which he believes to be unfair and deceptive with
respect to such members. This section shall not be construed as exempting
from regulation by the department of insurance any insurance contract or
health services contract which provides for the payment of benefits or
the supplying of health services under the labor organization,
union-employer-employee or employer-employee plans referred to in this
section which are purchased from insurance companies or health-services
corporations subject to regulation by the department of insurance. (L.
1973 S.B. 3 § 32, A.L. 1983 H.B. 127)

Provisions of sections 354.010 to 354.380 or of any law relating
to insurance shall not apply to any employer's plan to insure the
continued payment of wages or like compensation to employees during
periods of sickness or disability. (L. 1973 S.B. 3 § 34, A.L. 1983 H.B.
127)

1. (1) The director may issue cease and desist orders whenever
it appears to him upon competent and substantial evidence that any person
is acting in violation of any law, rule or regulation relating to
corporations subject to the provisions of sections 354.010 to 354.380, or
whenever the director has reason to believe that any health services
corporation is in such financial condition that the assumption of
additional obligations would be hazardous to its members or the general
public. Before any cease and desist order shall be issued, a copy of the
proposed order together with an order to show cause why such cease and
desist order should not be issued shall be served either personally or by
certified mail on any person named therein.

(2) (a) Upon issuing any order to show cause, the director shall notify
the person named therein that the person is entitled to a public hearing
before the director if a request for a hearing is made in writing to the
director within fifteen days from the day of the service of the order to
show cause why the cease and desist order should not be issued.

(b) The cease and desist order shall be issued fifteen days after the
service of the order to show cause if no request for a public hearing is
made as above provided.

(c) Upon receipt of a request for a hearing, the director shall set a
time and place for the hearing which shall not be less than ten days or
more than fifteen days from the receipt of the request or as otherwise
agreed upon by the parties. Notice of the time and place shall be given
by the director not less than five days before the hearing.

(d) At the hearing the person may be represented by counsel and shall be
entitled to be advised of the nature and source of any adverse evidence
procured by the director and shall be given the opportunity to submit any
relevant written or oral evidence in his behalf to show cause why the
cease and desist order should not be issued.

(e) At the hearing the director shall have such powers as are conferred
upon him in section 354.190.

(f) At the conclusion of the hearing, or within ten days thereafter, the
director shall issue the cease and desist order as proposed or as
subsequently modified or notify the person or corporation subject to the
provisions of sections 354.010 to 354.380 that no order shall be issued,
provided that where the director finds that the corporation is in such
financial condition that the assumption of additional obligations would
be hazardous to its members or the general public, he may order the
corporation to cease and desist from making contracts for new members or
for the provision of new benefits until the corporation's financial
condition is no longer hazardous.

(g) The circuit court of Cole County shall have jurisdiction to review
any cease and desist order of the director under the provisions of
sections 536.100 to 536.150, RSMo; and, if any person against whom an
order is issued fails to request judicial review, or if, after judicial
review, the director's cease and desist order is upheld, the order shall
become final.

2. (1) Any person willfully violating any provision of any cease and
desist order of the director after it becomes final, while the same is in
force, upon conviction thereof shall be guilty of a class A misdemeanor,
punishable as provided by law.

(2) In addition to any other penalty provided, violation of any cease and
desist order shall subject the violator to suspension or revocation of
any certificate of authority or license as may be applicable under the
laws of this state relating to corporations subject to the provisions of
sections 354.010 to 354.380.

3. (1) When it appears to the director that there is a violation of the
law, rule or regulation relating to corporations subject to the
provisions of sections 354.010 to 354.380, and that the continuance of
the acts or actions of any person as herein defined would produce injury
to the public or to any other person in this state, or when it appears
that a person is doing or threatening to do some act in violation of the
laws of this state relating to corporations subject to the provisions of
sections 354.010 to 354.380, the director may file a petition for
injunction in the circuit court of Cole County, Missouri, in which he may
ask for a temporary injunction or restraining order as well as a
permanent injunction to restrain the act or threatened act. In the event
the temporary injunction or restraining order or a permanent injunction
is issued by the circuit court of Cole County, Missouri, no person
against whom the temporary injunction or restraining order or permanent
injunction is granted shall do or continue to do any of the acts or
actions complained of in the petition for injunction, unless and until
the temporary injunction or restraining order or permanent injunction is
vacated, dismissed or otherwise terminated.

(2) Any writ of injunction issued under this law may be served and
enforced as provided by law in injunctions issued in other cases, but the
director of the insurance department shall not be required to give any
bond as preliminary to or in the course of any proceedings to which he is
a party as director.

4. The term "person" as used in this section shall include any
individual, partnership, corporation, association or trust, or any other
legal entity. (L. 1983 H.B. 127)

1. The director shall examine and inquire into all violations of
the laws of the state applicable to corporations subject to the
provisions of sections 354.010 to 354.380, and examine the financial
condition, affairs and management of any corporation subject to the
provisions of sections 354.010 to 354.380 incorporated by or doing
business in this state, and inquire into and investigate the business
transacted in this state by any corporation subject to the provisions of
sections 354.010 to 354.380 or such corporation's enrollment
representatives.

2. He or any of his duly appointed agents may compel the attendance
before him, and may examine, under oath, the directors, officers,
employees, enrollment representatives, attorneys or any other person, in
reference to the condition, affairs, management of the business, or any
matters relating thereto. He may administer oaths or affirmations, and
shall have power to summon and compel the attendance of witnesses, and to
require and compel the production of records, books, papers, contracts or
other documents, if necessary.

3. The director may make and conduct the examination in person, or he may
appoint one or more persons to make and conduct the same for him. If made
by one other than the director in person, the person duly appointed by
the director shall have the same powers as above granted to the director.
A certificate of appointment, under the official seal of the director,
shall be sufficient authority and evidence thereof for the person or
persons to act. For the purpose of making the examinations, or having the
same made, the director may employ the necessary clerical, actuarial and
other assistance.

4. The director may accept, in lieu of an examination by himself, or by
his authority, a certificate of an examination, accompanied by a
statement of all the facts in the case made by the insurance commissioner
or superintendent of another state, of a health services corporation
organized under the laws of such state. (L. 1983 H.B. 127)

Said director shall keep and preserve in a permanent form a full
record of his proceedings, including a concise statement of the condition
of every corporation subject to the provisions of sections 354.010 to
354.380 whose affairs he shall have examined. (L. 1983 H.B. 127)

1. Any person testifying falsely in reference to any matter
material to the investigation, examination or inquiry shall, upon
conviction thereof, be deemed guilty of a class A misdemeanor, punishable
as provided by law.

2. Any person who shall refuse to give such director full and truthful
information, and answer in writing to any inquiry or question made in
writing by the director, in regard to the business * relating to any
corporation subject to the provisions of sections 354.010 to 354.380
carried on by such person, or to appear and testify under oath before the
director in regard to the same, shall, upon conviction thereof, be deemed
guilty of a class B misdemeanor, punishable as provided by law.

3. Any director, officer, manager, enrollment representative, or employee
of any corporation subject to the provisions of sections 354.010 to
354.380, or any other person, who shall make any false certificate or
entry or memorandum upon any of the books or papers of any such
corporation, or upon any statement or exhibit offered, filed or offered
to be filed in the insurance department, or used in the course of any
examination, inquiry or investigation, with intent to deceive the
director or any person employed or appointed by him to make any
examination, inquiry or investigation, shall, upon conviction thereof, be
guilty of a class A misdemeanor, punishable as provided by law. (L. 1983
H.B. 127)

*Word "of" appears here in original rolls.

1. The expenses of any proceedings concerning, or examinations
of, a corporation subject to the provisions of sections 354.010 to
354.380, conducted by the department of insurance, shall be assessed by
the director upon the corporation proceeded against or examined, or whose
policies have been valued, and shall be in the first instance paid by
such corporation, on the order of the director, directly to the person or
persons rendering the service.

2. If the corporation subject to the provisions of sections 354.010 to
354.380 has been or shall be adjudged insolvent, or shall neglect, fail
or refuse to pay the director may approve the payment of the expenses, in
whole or in part, which shall be paid in like manner as other expenses of
the insurance department; and the amount so paid, together with cost,
charges and fees for collecting the same, shall be a first lien upon all
the assets and property of such corporation, and may be recovered by the
director of revenue in any court of competent jurisdiction; or if such
corporation be in liquidation, or process of being wound up, the cost and
expenses of settling its affairs shall be allowed and taxed as costs
against said corporation, and shall be a first lien upon and payable out
of its assets. The director of revenue shall deposit such sums in the
state treasury to reimburse the insurance fund.

3. Before any costs of any examination or valuation shall be paid,
vouchers for the same shall be submitted to and approved by the
commissioner of administration.

4. When any examination or valuation is made by the director in person or
by any salaried employee of the department of insurance, the cost of
making the same shall be certified to the director of revenue for
collection. (L. 1983 H.B. 127)

1. A health services corporation shall allow enrollees to seek a
second medical opinion or consultation from a willing second physician at
no additional cost to the enrollee beyond what the enrollee would
otherwise pay for an initial medical opinion or consultation from that
second physician.

2. If an enrollee chooses to seek a second medical opinion, and if the
health services corporation does not employ or contract with another
physician with the expertise necessary to provide a second medical
opinion, then the health services corporation shall arrange for a
referral to another physician with the necessary expertise to provide a
second opinion or consultation and ensure that the enrollee obtains the
covered benefit at no greater cost to the enrollee than if the benefit
were obtained from participating physicians.

3. The second opinions required in this section and section 354.546 shall
be covered only in the event that the original diagnosis requires major
surgery or other treatment necessitating general anesthesia or other
serious illness involving loss of bodily part or function or other
debilitating disease. (L. 1998 S.B. 754 § 354.207, § 1)

1. Notwithstanding any other provisions of chapter 354, the
director may, after a hearing, order as* a forfeiture to the state of
Missouri a sum not to exceed one hundred dollars for each violation by
any person or corporation willfully violating any provision of sections
354.010 to 354.380 for which no specific punishment is provided, or order
of the director made in accordance with such sections. Such forfeiture
may be recovered by a civil action brought by and in the name of the
director of insurance. The civil action may be brought in the county
which has venue of an action against the person or corporation under
other provisions of law.

2. Nothing contained in this section shall be construed to prohibit the
director and the corporation or its enrollment representative from
agreeing to a voluntary forfeiture of the sum mentioned herein without
civil proceedings being instituted. Any sum so agreed upon shall be paid
into the school fund as provided by law for other fines and penalties.
(L. 1983 H.B. 127)

*Word "as" does not appear in original rolls.

The provisions of sections 374.261 to 374.269, RSMo, which
relate to the insurance examiner's sick leave fund, shall apply to health
services corporations certified to operate in this state in the same
manner as these sections now apply to those domestic insurers which pay a
premium tax and are engaged in the business of insurance within this
state. The provisions of sections 374.261 to 374.269, RSMo, shall also
apply to examiners of the department of insurance conducting examinations
under section 354.190 in the same manner as these sections now apply to
examiners of the department of insurance conducting examinations under
section 374.190, RSMo. (L. 1983 H.B. 127)

1. The director may bring suit to recover any fees or other sums
which he is authorized by law to demand or collect.

2. Any corporation subject to the provisions of sections 354.010 to
354.380 or person liable for any fees or assessments who shall neglect or
refuse to pay the same within ten days after written demand by the
director shall be liable to pay double the amount of such fees or
assessments; and any judgment recovered in such case shall be for double
such amount and costs. (L. 1983 H.B. 127)

1. Any employee of a corporation subject to the provisions of
sections 354.010 to 354.380 who, for compensation, solicits membership in
a prepayment health services plan offered by such corporation, or offers
or assumes to act in negotiation thereof, shall be an "enrollment
representative" of such corporation. Every corporation subject to
sections 354.010 to 354.380 shall furnish the director annually, at the
time of filing its annual report, the name, title and address of such
person employed by it as the corporation's enrollment representative.

2. Any person who, for compensation, solicits membership in a prepayment
health services plan offered by a corporation subject to the provisions
of sections 354.010 to 354.380, who is not an employee of such
corporation, shall be an insurance agent or broker licensed to transact
such business in the state of Missouri.

3. Enrollment representatives, agents and brokers soliciting,
negotiating, procuring or making membership agreements for a corporation
subject to the provisions of sections 354.010 to 354.380 shall be subject
to all the insurance laws of this state applicable to agents and brokers
authorized to solicit, negotiate, procure or make health insurance
coverage in this state, including those provisions of chapter 375, RSMo,
relating to the education, licensing, appointment, termination and
discipline of agents and brokers. (L. 1983 H.B. 127, A.L. 1993 H.B. 709)

No person shall act in this state as an enrollment
representative unless he is licensed by the director as provided in this
chapter. (L. 1983 H.B. 127)

1. The director shall issue a license to any natural person who
is at least eighteen years of age, and has complied with the requirements
of sections 354.010 to 354.380, authorizing the licensee to act as an
enrollment representative on behalf of any corporation subject to the
provisions of sections 354.010 to 354.380.

2. Any license issued shall authorize only the licensee named in the
license to act individually as an enrollment representative thereunder.
(L. 1983 H.B. 127, A.L. 1993 S.B. 709)

1. A person not a legal resident of this state may be licensed
to act in this state as an enrollment representative upon compliance with
the provisions of this chapter provided that the state in which the
person resides will accord the same privilege to a resident of this
state. The director is authorized to enter into reciprocal agreements
with the appropriate official of any other state waiving the written
examination of any applicant residing in the other state; provided, the
director deems the applicant fully qualified and competent; and

(1) That a written examination is required of applicants for similar
licenses in the other state; and

(2) That the appropriate official in that state certifies that the
applicant holds a currently valid license of similar type in that state
and either passed a written examination or was the holder of such license
prior to the time a written examination was required.

2. In the event that the applicant is a resident of a state which does
not require a written examination, then the director shall subject him to
a written examination under terms and conditions to be prescribed by the
director of insurance.

3. In the event that the applicant is a resident of another state in
which the appropriate insurance official, as a general policy, has
refused to permit legal residents of Missouri to become licensed as
enrollment representatives and to transact the business of a health
services corporation in such state, then the director shall not license
any applicant from that state. (L. 1983 H.B. 127)

A nonrenewable temporary license may be issued for a period not
to exceed ninety days in cases where an applicant has theretofore filed a
completed application for a license, has secured an appointment by a
corporation subject to the provisions of sections 354.010 to 354.380, has
paid the applicable fees and where the director is satisfied as to the
applicant's business reputation. (L. 1983 H.B. 127)

Any person willfully violating any of the provisions of sections
354.225 to 354.270 is guilty of a class A misdemeanor and on conviction
thereof, if the offender holds a license under these sections, the court
imposing sentence shall order the director of the department of insurance
to revoke the license. (L. 1983 H.B. 127)

The director shall not grant or continue authority to transact
insurance in this state as to any corporation subject to the provisions
of sections 354.010 to 354.380, one or more of the managing officers of
which is found by him, after hearing, to be of known bad character or to
be so incompetent or untrustworthy as to make the proposed operation
hazardous to the health services corporation's current or potential
members; or which he has good reason to believe is affiliated directly or
indirectly through ownership, control, reinsurance transactions or other
insurance or business relations with any person or persons whose business
operations are or have been detrimental to policyholders, stockholders,
investors, creditors, members or the public by illegal or fraudulent
manipulation or dissipation of assets or accounts, or of reinsurance of
any insurance company or companies, or by similar injurious actions. (L.
1983 H.B. 127)

1. All agreements or contracts under which any person,
organization or corporation enjoys in fact the exclusive or dominant
right to manage or control any corporation subject to the provisions of
sections 354.010 to 354.380 to the substantial exclusion of the board of
directors, officers, attorney in fact or other lawful management shall be
filed with the director on his request.

2. The director, for the purpose of ascertaining the assets, conditions
and affairs of any corporation subject to the provisions of sections
354.010 to 354.380, may examine the books, records, documents and assets
of any person having a contract or agreement as provided in subsection 1
to the extent necessary to determine the financial condition of such
corporation. The failure or refusal of any such person to submit his
books, papers, accounts, records or affairs to the reasonable inspection
or examination of the director shall be grounds for the suspension or
revocation of the certificate of authority of the corporation to do
business in this state.

3. No agreement or contract as provided in subsection 1 shall operate to
the financial detriment of the corporation in such manner as to endanger
its financial stability or otherwise be hazardous to the members and
creditors of the corporation.

4. On examination of any agreement or contract, if the director finds it
violates the provisions of this section, he shall proceed in accordance
with the provisions of section 354.180.

5. Any person, organization or corporation having a management contract
as provided in subsection 1 hereof shall within five days of execution of
such contract provide notice of such contract to the director of
insurance. (L. 1983 H.B. 127)

1. Every examiner shall make a full and true report of every
examination made by him, verified by his oath, which examination shall
comprise only facts appearing upon the books, papers, records or
documents of the corporation subject to the provisions of sections
354.010 to 354.380, or ascertained from the testimony sworn to by its
officers or agents or other persons examined under oath, concerning its
affairs and such conclusions and recommendations as may reasonably be
warranted from the facts so disclosed.

2. The director shall grant a hearing to the corporation examined before
filing any report and may withhold any report from public inspection for
such time as he deems proper, and may, if he deem it for the interest of
the public to do so, publish any report or the result of any examination
as contained therein in one or more newspapers of the state. (L. 1983
H.B. 127)

The director shall not approve any declaration of organization
or articles of incorporation or issue a certificate of authority to any
company until he has found that there is no good reason to believe that
the incorporators, directors and proposed officers are affiliated,
directly or indirectly, through ownership, control, management,
reinsurance transactions or other insurance or business relations with
any person or persons known to have been involved in the improper
manipulation of assets, accounts or reinsurance. (L. 1983 H.B. 127)

Other provisions of law notwithstanding, the director may
suspend or revoke, after a hearing, the certificate of authority or
license of any corporation subject to the provisions of sections 354.010
to 354.380 for the same reasons and upon the same grounds as set forth in
section 354.355. (L. 1983 H.B. 127)

1. Whenever any corporation subject to the provisions of
sections 354.010 to 354.380 doing business in this state advertises its
assets, either in any newspaper or periodical, or by any sign, circular,
card, policy of insurance or certificate of renewal thereof, it shall, in
the same connection, equally conspicuously advertise its liabilities, the
same to be determined in the manner required in making statement to the
insurance division, and all advertisements purporting to show the amount
of capital of the company shall show only the amount of capital actually
paid up in cash.

2. Any corporation subject to the provisions of sections 354.010 to
354.380 or enrollment representative violating the provisions of this
section shall, upon conviction thereof, be guilty of a class B
misdemeanor, punishable as provided by law. (L. 1983 H.B. 127)

Notwithstanding any prohibitions or restrictions contained in
the statutes, any corporation subject to the provisions of sections
354.010 to 354.380 may acquire by purchase electronic or mechanical
machines constituting a data processing system, and thereafter may hold
the system as an admitted asset for use in connection with the business
of the company if

(1) The system shall have an aggregate cost of not less than twenty-five
thousand dollars and its aggregate cost shall not exceed five percent of
the admitted assets of the company;

(2) The cost of the component machines constituting the system shall be
fully amortized over a period not to exceed ten calendar years. If a data
processing system consists of separate component machines which are
acquired at different times, then the cost of each component shall be
fully amortized over a period not to exceed ten calendar years commencing
with the date of acquisition of each component. (L. 1983 H.B. 127)

No officer, enrollment representative or employee of any
corporation subject to the provisions of sections 354.010 to 354.380,
formed under the laws of this state, or doing business herein, shall,
directly or indirectly, use or employ, or permit others to use or employ,
any of the money, funds or securities of such corporation for private
profit or gain, except for reasonable compensation for services performed
and reimbursement for expenses incurred, and any such use shall, upon
conviction thereof, be a class D felony. (L. 1983 H.B. 127)

1. The director of insurance shall, as often as he may deem
proper, make careful inquiry and investigation as to the manner in which
the money, funds or securities of corporations subject to the provisions
of sections 354.010 to 354.380, doing business in this state, are
invested or employed, and record the result of such inquiry or
investigation in records kept in his office for the inspection of members
and public officials.

2. In the event of a violation of this section or of section 354.320, the
prosecuting attorney of the proper county, or in the city of St. Louis,
the circuit attorney, shall proceed at once by information or indictment
against the offenders. (L. 1983 H.B. 127)

Any public official failing, neglecting or refusing to comply
with any of the provisions of sections 354.320 and 354.325 shall be
deemed guilty of a misdemeanor, and, upon conviction, shall be fined not
less than five hundred dollars and forfeit his office. (L. 1983 H.B. 127)

In any action against any corporation subject to the provisions
of sections 354.010 to 354.380 to recover the amount of any loss under a
policy of health insurance, if it appears from the evidence that such
corporation has refused to pay such loss without reasonable cause or
excuse, the court or jury may, in addition to the amount thereof and
interest, allow the plaintiff damages not to exceed twenty percent of the
first fifteen hundred dollars of the loss, and ten percent of the amount
of the loss in excess of fifteen hundred dollars and a reasonable
attorney's fee; and the court shall enter judgment for the aggregate sum
found in the verdict. (L. 1983 H.B. 127)

Whenever any judgment shall be obtained in any of the courts of
this state against any corporation subject to the provisions of sections
354.010 to 354.380 doing business in this state, and said judgment shall
remain unsatisfied for fifteen days after execution shall have been
lawfully issued thereon, the certificate of authority or license to do
business issued or granted to such corporation shall immediately be
suspended or revoked by the director of the insurance department, upon
said director being notified thereof, and such insurance company shall,
after such suspension or revocation, be prohibited from transacting any
business in this state until such judgment shall be satisfied. (L. 1983
H.B. 127)

Any person, who has heretofore obtained or may hereafter obtain,
in any of the courts of this state, a decree against any corporation
subject to the provisions of sections 354.010 to 354.380 doing business
in this state, commanding or directing said corporation to specifically
perform a membership contract, may, if the corporation against which said
decree is obtained, fails, for a period of fifteen days after the
rendition of said decree, to comply with the same, obtain a copy of said
decree, certified to under the hand and seal of the clerk of the court in
which said decree was rendered, and transmit the same, together with the
certificate of said clerk, reciting therein the failure of such
corporation to comply with said decree, and transmit the same to the
director of the insurance department of the state of Missouri, and
immediately upon receipt thereof, the said director of insurance shall
cause such corporation to be notified of the fact of the filing of such
certified copy of said decree and certificate, and if such corporation
fails for a period of thirty days thereafter to comply with said decree,
the certificate of authority or license to do business issued or granted
to such corporation shall immediately be suspended or revoked by the
director of the insurance department, until such decree shall be
satisfied; provided, however, the foregoing shall not be applicable while
an appeal is pending if a supersedeas bond shall have been given. (L.
1983 H.B. 127)

1. When upon investigation the director finds that any
corporation subject to the provisions of sections 354.010 to 354.380
transacting business in this state has conducted its business
fraudulently, is not carrying out its contracts in good faith, or is
habitually and as a matter of business practice compelling claimants
under policies or liability judgment creditors of its members to either
accept less than the amount due under the terms of the policy or resort
to litigation against the corporation to secure payment of the amount
due, and that a proceeding in respect thereto would be in the interest of
the public, he shall issue and serve upon the corporation a statement of
the charges in that respect and a notice of a hearing thereon.

2. If after the hearing the director shall determine that the corporation
subject to the provisions of sections 354.010 to 354.380 has fraudulently
conducted its business as defined in this section, he shall order the
corporation to cease and desist from the fraudulent practice and may
suspend the corporation's certificate of authority for a period not to
exceed thirty days and may in addition order a forfeiture to the state of
Missouri of a sum not to exceed one thousand dollars, which forfeiture
may be recovered by a civil action brought by and in the name of the
director of insurance. The civil action may be brought in the circuit
court of Cole County or, at the option of the director of insurance, in
another county which has venue of an action against the corporation under
other provisions of law. The director of insurance may also suspend or
revoke the license of a corporation subject to the provisions of sections
354.010 to 354.380 or enrollment representative for any such willful
violation. (L. 1983 H.B. 127)

Whenever it shall appear to the director of the insurance
department, from any examination made by himself, or from the report of a
person or persons appointed by him, or from the statements of the
corporation subject to the provisions of sections 354.010 to 354.380, or
from any knowledge or information in his possession

(1) That the corporation has refused to submit its books, papers,
accounts or affairs to the reasonable inspection of the director or his
deputy or his examiner; or

(2) That the corporation has, by contract of reinsurance or otherwise,
transferred or attempted to transfer substantially its entire property or
business, or entered into any transaction, the effect of which is to
merge substantially its entire property or business in the property or
business of any other corporation, association, society, order,
partnership or individual without first having obtained the written
approval of the director of insurance as provided by law; or

(3) That the corporation is found, after an examination, to be in such
condition that its further transaction of business will be hazardous to
its policyholders or to its creditors or to the public; or

(4) That the corporation has an officer who has refused to be examined
under oath touching its affairs; or

(5) That the corporation has ceased to transact the business of insurance
for a period of one year;

the director may institute a suit or proceedings in the circuit court in
the county or city in which the corporation was organized or in which it
has or last had its principal or chief office or place of business or in
the county of Cole, to enjoin the corporation from further prosecution of
its business, either temporarily or perpetually, or for a judgment
dissolving the corporation or for both; and after the entry of the decree
or judgment, the court upon the motion of the director of the insurance
department may order the liquidation, settlement and winding up of the
affairs of such corporation or the rehabilitation of the corporation as
provided in section 354.140 together with such other decrees and orders
in connection therewith as the court shall deem advisable. (L. 1983 H.B.
127 § 354.355 subsec. 1)

1. Whenever the director institutes proceedings under section
354.355, he may also institute proceedings in the same case for
receivership for any organization or corporation having the exclusive or
dominant right to manage or control the corporation subject to the
provisions of sections 354.010 to 354.380 which is the subject of the
main case, when it appears that a receiver is necessary for the
preservation of the assets of the corporation or that a receiver is
necessary to determine the assets of the corporation held by the
organization or corporation. The duration of the receivership and the
duties of the receiver shall be in the discretion of the court.

2. The director may apply to the circuit court of Cole County, Missouri,
for an order appointing him as receiver or ancillary receiver, and
directing him to conserve the assets within this state of any foreign or
alien corporation subject to the provisions of sections 354.010 to
354.380 upon any of the following grounds:

(1) Upon any of the grounds specified in section 354.355; or

(2) That the corporation has been placed in conservatorship or
receivership in its domiciliary state or sovereignty or elsewhere.

The institution of and the operation of the receivership shall be in
accordance with chapter 355, RSMo. (L. 1983 H.B. 127 § 354.355 subsecs.
2, 3)

The provisions of section 376.406, RSMo, shall apply to all
health services corporations subject to the provisions of sections
354.010 to 354.380. (L. 1983 H.B. 127)

The provisions of sections 375.936 and 376.770 to 376.800, RSMo,
shall apply to all health services corporations subject to the provisions
of sections 354.010 to 354.380. (L. 1983 H.B. 127)

As used in sections 354.400 to 354.535, the following terms
shall mean:

(1) "Basic health care services", health care services which an enrolled
population might reasonably require in order to be maintained in good
health, including, as a minimum, emergency care, inpatient hospital and
physician care, and outpatient medical services;

(2) "Community-based health maintenance organization", a health
maintenance organization which:

(a) Is wholly owned and operated by hospitals, hospital systems,
physicians, or other health care providers or a combination thereof who
provide health care treatment services in the service area described in
the application for a certificate of authority from the department of
insurance;

(b) Is operated to provide a means for such health care providers to
market their services directly to consumers in the service area of the
health maintenance organization;

(c) Is governed by a board of directors that exercises fiduciary
responsibility over the operations of the health maintenance organization
and of which a majority of the directors consist of equal numbers of the
following:

a. Physicians licensed pursuant to chapter 334, RSMo;

b. Purchasers of health care services who live in the health maintenance
organization's service area;

c. Enrollees of the health maintenance organization elected by the
enrollees of such organization; and

d. Hospital executives, if a hospital is involved in the corporate
ownership of the health maintenance organization;

(d) Provides for utilization review, as defined in section 374.500, RSMo,
under the auspices of a physician medical director who practices medicine
in the service area of the health maintenance organization, using review
standards developed in consultation with physicians who treat the health
maintenance organization's enrollees;

(e) Is actively involved in attempting to improve performance on
indicators of health status in the community or communities in which the
health maintenance organization is operating, including the health status
of those not enrolled in the health maintenance organization;

(f) Is accountable to the public for the cost, quality and access of
health care treatment services and for the effect such services have on
the health of the community or communities in which the health
maintenance organization is operating on a whole;

(g) Establishes an advisory group or groups comprised of enrollees and
representatives of community interests in the service area to make
recommendations to the health maintenance organization regarding the
policies and procedures of the health maintenance organization;

(h) Enrolls fewer than fifty thousand covered lives;

(3) "Covered benefit" or "benefit", a health care service to which an
enrollee is entitled under the terms of a health benefit plan;

(4) "Director", the director of the department of insurance;

(5) "Emergency medical condition", the sudden and, at the time,
unexpected onset of a health condition that manifests itself by symptoms
of sufficient severity that would lead a prudent lay person, possessing
an average knowledge of health and medicine, to believe that immediate
medical care is required, which may include, but shall not be limited to:

(a) Placing the person's health in significant jeopardy;

(b) Serious impairment to a bodily function;

(c) Serious dysfunction of any bodily organ or part;

(d) Inadequately controlled pain; or

(e) With respect to a pregnant woman who is having contractions:

a. That there is inadequate time to effect a safe transfer to another
hospital before delivery; or

b. That transfer to another hospital may pose a threat to the health or
safety of the woman or unborn child;

(6) "Emergency services", health care items and services furnished or
required to screen and stabilize an emergency medical condition, which
may include, but shall not be limited to, health care services that are
provided in a licensed hospital's emergency facility by an appropriate
provider;

(7) "Enrollee", a policyholder, subscriber, covered person or other
individual participating in a health benefit plan;

(8) "Evidence of coverage", any certificate, agreement, or contract
issued to an enrollee setting out the coverage to which the enrollee is
entitled;

(9) "Health care services", any services included in the furnishing to
any individual of medical or dental care or hospitalization, or incident
to the furnishing of such care or hospitalization, as well as the
furnishing to any person of any and all other services for the purpose of
preventing, alleviating, curing, or healing human illness, injury, or
physical disability;

(10) "Health maintenance organization", any person which undertakes to
provide or arrange for basic and supplemental health care services to
enrollees on a prepaid basis, or which meets the requirements of section
1301 of the United States Public Health Service Act;

(11) "Health maintenance organization plan", any arrangement whereby any
person undertakes to provide, arrange for, pay for, or reimburse any part
of the cost of any health care services and at least part of such
arrangement consists of providing and assuring the availability of basic
health care services to enrollees, as distinguished from mere
indemnification against the cost of such services, on a prepaid basis
through insurance or otherwise, and as distinguished from the mere
provision of service benefits under health service corporation programs;

(12) "Individual practice association", a partnership, corporation,
association, or other legal entity which delivers or arranges for the
delivery of health care services and which has entered into a services
arrangement with persons who are licensed to practice medicine,
osteopathy, dentistry, chiropractic, pharmacy, podiatry, optometry, or
any other health profession and a majority of whom are licensed to
practice medicine or osteopathy. Such an arrangement shall provide:

(a) That such persons shall provide their professional services in
accordance with a compensation arrangement established by the entity; and

(b) To the extent feasible for the sharing by such persons of medical and
other records, equipment, and professional, technical, and administrative
staff;

(13) "Medical group/staff model", a partnership, association, or other
group:

(a) Which is composed of health professionals licensed to practice
medicine or osteopathy and of such other licensed health professionals
(including dentists, chiropractors, pharmacists, optometrists, and
podiatrists) as are necessary for the provisions of health services for
which the group is responsible;

(b) A majority of the members of which are licensed to practice medicine
or osteopathy; and

(c) The members of which (i) as their principal professional activity
over fifty percent individually and as a group responsibility engaged in
the coordinated practice of their profession for a health maintenance
organization; (ii) pool their income from practice as members of the
group and distribute it among themselves according to a prearranged
salary or drawing account or other plan, or are salaried employees of the
health maintenance organization; (iii) share medical and other records
and substantial portions of major equipment and of professional,
technical, and administrative staff; (iv) establish an arrangement
whereby an enrollee's enrollment status is not known to the member of the
group who provides health services to the enrollee;

(14) "Person", any partnership, association, or corporation;

(15) "Provider", any physician, hospital, or other person which is
licensed or otherwise authorized in this state to furnish health care
services;

(16) "Uncovered expenditures", the costs of health care services that are
covered by a health maintenance organization, but that are not
guaranteed, insured, or assumed by a person or organization other than
the health maintenance organization, or those costs which a provider has
not agreed to forgive enrollees if the provider is not paid by the health
maintenance organization. (L. 1983 H.B. 127, A.L. 1997 H.B. 335)

1. Notwithstanding any law of this state to the contrary, any
person may apply to the director for a certificate of authority to
establish and operate a health maintenance organization in compliance
with this act. No person shall establish or operate a health maintenance
organization in this state without obtaining a certificate of authority
pursuant to sections 354.400 to 354.636. A foreign corporation may
qualify pursuant to sections 354.400 to 354.636, subject to its
registration to do business in this state as a foreign corporation
pursuant to chapter 351, RSMo, and compliance with the provisions of
sections 354.400 to 354.636.

2. Every health maintenance organization doing business in this state on
September 28, 1983, shall submit an application for a certificate of
authority pursuant to subsection 3 of this section within one hundred
twenty days of September 28, 1983. Each such applicant may continue to
operate until the director acts upon the application. In the event that
an application is not submitted or is denied pursuant to section 354.410,
the applicant shall henceforth be treated as a health maintenance
organization whose certificate of authority has been revoked. Any health
maintenance organization licensed by the department of insurance prior to
September 28, 1983, and complying with the paid-in capital or guarantee
fund requirements of section 354.410 shall be issued a certificate of
authority upon filing an amended certificate of authority and an amended
articles of incorporation that conform with sections 354.400 to 354.636.
When the annual statement of a health maintenance organization subject to
the provisions of sections 354.400 to 354.636 is filed and all fees due
from the health maintenance organization are tendered, the health
maintenance organization's certificate of authority to do business in
this state shall automatically be extended pending formal renewal by the
director, or until such time as the director should refuse to renew the
certificate.

3. Each application for a certificate of authority shall be verified by
an officer or authorized representative of the applicant, shall be in a
form prescribed by the director, and shall set forth or be accompanied by
the following:

(1) A copy of the organizational documents of the applicant such as the
articles of incorporation, articles of association, partnership
agreement, trust agreement, or other applicable documents, and all
amendments thereto;

(2) A copy of the bylaws, rules and regulations, or similar document, if
any, regulating the conduct of the internal affairs of the applicant;

(3) A list of the names, addresses, and official positions of the persons
who are to be responsible for the conduct of the affairs of the
applicant, including all members of the board of directors, board of
trustees, executive committee, or other governing board or committee, the
principal officers if the applicant is a corporation, and the partners or
members if the applicant is a partnership or association;

(4) A copy of any contract made or to be made between any providers and
persons listed in subdivision (3) of this subsection and the applicant;

(5) A copy of the form of evidence of coverage to be issued to the
enrollees;

(6) A copy of the form of the group contract, if any, which is to be
issued to employers, unions, trustees, or other organizations;

(7) Financial statements showing the applicant's assets, liabilities, and
sources of financial support. If the applicant's financial affairs are
audited by independent certified public accountants, a copy of the
applicant's most recent certified financial statement shall be deemed to
satisfy this requirement unless the director directs that additional or
more recent financial information is required for the proper
administration of sections 354.400 to 354.636;

(8) A description of the proposed method of marketing the plan, a
financial plan which includes a three-year projection of operating
results anticipated, and a statement as to the sources of working capital
as well as any other sources of funding;

(9) If the applicant is not domiciled in this state, a power of attorney
duly executed by such applicant appointing the director, the director's
successors in office, and duly authorized deputies, as the true and
lawful attorney of such applicant in and for this state upon whom all
lawful process in any legal action or proceeding against the health
maintenance organization on a cause of action arising in this state may
be served;

(10) A statement reasonably describing the geographic area or areas to be
served;

(11) A description of the complaints procedures to be utilized as
required by section 354.445;

(12) A description of the mechanism by which enrollees will be afforded
an opportunity to participate in matters of policy and operation;

(13) Evidence demonstrating that the health maintenance organization has
provided its enrollees with adequate access to health care providers; and

(14) Such other information as the director may require to make the
determinations required in section 354.410.

4. Every health maintenance organization shall file with the director
notice of its intention to modify any of the procedures or information
described in and required to be filed by this section. Such changes shall
be filed with the director prior to the actual modification. If the
director does not disapprove the modification within forty-five days of
filing, citing specific reasons for noncompliance, such modification
shall be deemed approved. If a filing that is deemed approved is a
document described in subdivision (4), (5) or (6) of subsection 3 of this
section, the director shall not disapprove the deemed filing for a period
of twelve months thereafter. If at any time during that twelve-month
period the director determines that any provision of the deemed filing is
contrary to state law, the director shall notify the health maintenance
organization of the specific provision that is contrary to state law, and
any specific statute to which the provision is contrary to, and request
that the health maintenance organization file, within thirty days of
receipt of the request, an amendment form that modifies the provision to
conform to the state law. Upon approval of the amendment form by the
director, the health maintenance organization shall issue a copy of the
amendment to each individual and entity to which the deemed filing was
previously issued and shall attach a copy of the amendment to the deemed
filing when it is subsequently issued. Such amendment shall have the
force and effect as if the amendment was in the original filing or policy.

5. A health maintenance organization shall file all contracts of
reinsurance. Any agreement between the organization and an insurer shall
be subject to the laws of this state regarding reinsurance. All
reinsurance agreements and any modifications thereto shall be filed and
approved.

6. When the director deems it appropriate, the director may exempt any
item from the filing requirements of this section. (L. 1983 H.B. 127,
A.L. 1997 H.B. 335, A.L. 2003 H.B. 121)

Notwithstanding the provisions of section 354.405 to the
contrary, a program for all-inclusive care for the elderly (PACE) project
sponsored by a religious or charitable organization that is itself or is
controlled by an entity organized under Section 501(c)(3) of the Internal
Revenue Code and which has had its application for the operation of a
PACE program approved by the Center for Medicare and Medicaid Services of
the federal Department of Health and Human Services and is operating
under such approval shall not be deemed to be engaged in any business
required to be licensed pursuant to section 354.405. Such exemption shall
apply only to business conducted pursuant to the approved PACE contract
and not to any other business that such organization may conduct. (L.
2002 S.B. 1094)

1. The director shall issue or deny a certificate of authority
to any person filing an application pursuant to section 354.405. Issuance
of a certificate of authority may then be granted upon payment of the
application fee prescribed in section 354.500 if the director is
satisfied that the following conditions are met:

(1) The persons responsible for the conduct of the affairs of the
applicant are competent, trustworthy, and possess good reputations;

(2) The health care organization constitutes an appropriate mechanism
whereby the health maintenance organization will effectively provide or
arrange for the provision of basic health care services on a prepaid
basis through insurance or otherwise, except to the extent of reasonable
requirements for co-payments;

(3) The health maintenance organization is financially responsible and
may reasonably be expected to meet its obligations to enrollees and
prospective enrollees. In making this determination, the director may
consider:

(a) The financial soundness of the arrangements for health care services
and the schedule of charges used in connection therewith;

(b) The adequacy of working capital;

(c) Any agreement with an insurer, a government, or any other
organization for insuring the payment of the cost of health care services
or the provision for automatic applicability of an alternative coverage
in the event of discontinuance of the health maintenance organization;

(d) Any agreement with providers for the provision of health care
services; and

(e) Any deposit of cash or securities submitted in accordance with
subsection 2;

(4) The health maintenance organization's arrangements for health care
services and the schedule of charges used in connection therewith are
financially sound;

(5) The working capital be adequate;

(6) Any agreement with an insurer, a health service corporation, a
government, or any other organization for insuring the payment of the
cost of health care services contain a provision for the automatic
applicability of alternative coverage in the event of discontinuance of
the health maintenance organization;

(7) There be an agreement with providers for the provision of health care
services;

(8) The enrollees shall be afforded an opportunity to participate in
matters of policy and operation pursuant to section 354.420;

(9) Nothing in the proposed method of operation, as shown by the
information submitted pursuant to section 354.405 or by independent
investigation, is contrary to the public interest;

(10) The health maintenance organization is able to provide its enrollees
with adequate access to health care providers.

2. Unless otherwise provided below, each health maintenance organization
shall deposit with the director, or with any organization or trustee
acceptable to the director through which a custodial or controlled
account is utilized, cash, securities, or any combination of these or
other measures that is acceptable to the director in the amount set forth
in this subsection:

(1) The amount for an organization that is beginning operation shall be
the greater of: (a) five percent of its estimated expenditures for health
care services for its first year of operation, (b) twice its estimated
average monthly uncovered expenditures for its first year of operation,
or (c) one hundred fifty thousand dollars for a medical group/staff
model, or three hundred thousand dollars for an individual practice
association. At the beginning of each succeeding year, unless not
applicable, the organization shall deposit with the director, or
organization or trustee, cash, securities, or any combination of these or
other measures acceptable to the director, in an amount equal to four
percent of its estimated annual uncovered expenditures for that year.

(2) Unless not applicable, an organization that is in operation on
September 28, 1983, shall make a deposit equal to the larger of: (a) one
percent of the preceding twelve months' uncovered expenditures, or (b)
one hundred fifty thousand dollars for a medical group/staff model, or
three hundred thousand dollars for an individual practice association on
the first day of the first calendar year beginning six months or more
after September 28, 1983. In the second calendar year, if applicable, the
amount of the additional deposit shall be equal to two percent of its
estimated annual uncovered expenditures. In the third calendar year, if
applicable, the additional deposit shall be equal to three percent of its
estimated annual uncovered expenditures for that year, and in the fourth
calendar year and subsequent years, if applicable, the additional deposit
shall be equal to four percent of its estimated annual uncovered
expenditures for each year. Each year's estimate, after the first year of
operation, shall reasonably reflect the prior years' operating experience
and delivery arrangements. The director may waive any of the deposit
requirements set forth in subdivisions (1) and (2) above, whenever
satisfied that the organization has sufficient net worth and an adequate
history of generating net income to assure its financial viability for
the next year, or its performance and obligations are guaranteed by an
organization with sufficient net worth and an adequate history of
generating net income, or the assets of the organization or its contracts
with insurers, hospital or medical service corporations, governments, or
other organizations are sufficient to reasonably assure the performance
of its obligations.

3. When an organization has achieved a net worth not including land,
buildings, and equipment, of at least one million dollars or has achieved
a net worth including organization-related land, buildings, and equipment
of at least five million dollars, the annual deposit requirements shall
not apply. The annual deposit requirement shall not apply to an
organization if the total amount of the deposit is equal to twenty-five
percent of its estimated annual uncovered expenditures for the next
calendar year, or the capital and surplus requirements for the formation
or admittance of an accident and health insurer in this state, whichever
is less. If the organization has a guaranteeing organization which has
been in operation for at least five years and has a net worth not
including land, buildings, and equipment of at least one million dollars
or which has been in operation for at least ten years and has a net worth
including organization-related land, buildings, and equipment of at least
five million dollars, the annual deposit requirement shall not apply;
provided, however, that if the guaranteeing organization is sponsoring
more than one organization, the net worth requirement shall be increased
by a multiple equal to the number of such organizations. This requirement
to maintain a deposit in excess of the deposit required of an accident
and health insurer shall not apply during any time that the guaranteeing
organization maintains a net worth at least equal to the capital and
surplus requirements for an accident and health insurer for each
organization it sponsors.

4. All income from deposits shall belong to the depositing organization
and shall be paid to it as it becomes available. A health maintenance
organization that has made a securities deposit may withdraw the
securities deposit or any part thereof, first having deposited, in lieu
thereof, a deposit of cash, securities, or any combination of these or
other measures of equal amount and value to that withdrawn. Any
securities shall be approved by the director before being substituted.

5. In any year in which an annual deposit is not required of an
organization, at its request the director shall reduce the required
deposit by one hundred thousand dollars for each two hundred fifty
thousand dollars of net worth in excess of the amount that allows it not
to make an annual deposit. If the amount of net worth no longer supports
a reduction of its required deposit, the organization shall immediately
redeposit one hundred thousand dollars for each two hundred fifty
thousand dollars of reduction in net worth, provided that its total
deposit shall not exceed the maximum required under this section.
Notwithstanding any provisions of sections 354.400 to 354.636, the
deposit held by the director shall in no case be less than one hundred
fifty thousand dollars for a group staff/model or three hundred thousand
dollars for an individual practice association model.

6. Each health maintenance organization that obtains a certificate of
authority after September 28, 1983, shall have and maintain a capital
account of at least one hundred fifty thousand dollars for a medical
group/staff model, or three hundred thousand dollars for an individual
practice association in addition to any deposit requirements under this
section. The capital account shall be net of any accrued liabilities and
be in the form of cash, securities or any combination of these or other
measures acceptable to the director.

7. A certificate of authority shall be denied only after compliance with
the requirements of section 354.490. (L. 1983 H.B. 127, A.L. 1997 H.B.
335)

1. The powers of a health maintenance organization include, but
are not limited to, the power to:

(1) Purchase, lease, construct, renovate, operate, and maintain
hospitals, medical facilities, or both, and their ancillary equipment,
and such property as may reasonably be required for the organization's
principal office or for such other purposes as may be necessary in the
transaction of the business of the organization;

(2) Make loans to a medical group under contract with it in furtherance
of its program, or to make loans to any corporation under its control for
the purpose of acquiring or constructing medical facilities and hospitals
or in the furtherance of a program providing health care services to
enrollees;

(3) Furnish health care services through providers which are under
contract with, or employed by, the health maintenance organization;

(4) Contract with any person for the performance, on the organization's
behalf, of certain functions such as marketing, enrollment, and
administration;

(5) Contract with an insurance company licensed in this state, or with a
health services corporation authorized to do business in this state, for
the provision of insurance, indemnity, or reimbursement against the cost
of health care services provided by the health maintenance organization;

(6) Offer, in addition to basic health care services:

(a) Additional health care services;

(b) Indemnity benefits covering out-of-area or emergency services; and

(c) Indemnity benefits, in addition to those relating to out-of-area and
emergency services, provided through insurers or health services
corporations.

2. Prior to the exercise of any power granted in subdivision (1) or (2)
of subsection 1 of this section, involving an amount in excess of five
hundred thousand dollars, a health maintenance organization shall file
notice, with adequate supporting information, with the director. The
director shall disapprove such exercise of power if, in his opinion, it
would substantially and adversely affect the financial soundness of the
health maintenance organization and endanger its ability to meet its
obligations. If the director does not disapprove such exercise of power
within sixty days of the filing, it shall be deemed approved.

3. The director may exempt from the filing requirement of subsection 2 of
this section those activities having minimal effect. (L. 1983 H.B. 127)

The governing body of each health maintenance organization shall
establish a mechanism to afford the enrollees an opportunity to
participate in matters of policy and operation through the establishment
of advisory panels, the use of advisory referenda on major policy
decisions, or the use of other mechanisms. (L. 1983 H.B. 127)

Any director, officer or partner of a health maintenance
organization who receives, collects, disburses, or invests funds in
connection with the activities of such organization shall be fiduciaries
of such funds. Every health maintenance organization shall maintain in
force a surety bond on such officers and employees in an amount of not
less than one hundred thousand dollars, or such other sum as may be
prescribed by the director. All such bonds shall be written with at least
a one-year discovery period and, if written with less than a three-year
discovery period, shall contain a provision that no cancellation or
termination of the bond, whether by or at the request of the insured or
by the underwriter, shall take effect prior to the expiration of ninety
days after written notice of such cancellation or termination has been
filed with the director, unless an earlier date of such cancellation or
termination is approved by the director. (L. 1983 H.B. 127)

1. Every enrollee residing in this state is entitled to evidence
of coverage. If the enrollee obtains coverage through an insurance policy
or a contract issued by a health services corporation, whether by option
or otherwise, the insurer or the health services corporation shall issue
the evidence of coverage. Otherwise the health maintenance organization
shall issue the evidence of coverage.

2. No evidence of coverage, or amendment thereto, shall be issued or
delivered to any person in this state until a copy of the form of the
evidence of coverage, or amendment thereto, has been filed with the
director.

3. An evidence of coverage shall contain:

(1) No provisions or statements which are unjust, unfair, inequitable,
misleading, or deceptive, or which encourage misrepresentation, or which
are untrue, misleading, or deceptive as defined in subsection 1 of
section 354.460; and

(2) A clear and complete statement, if a contract, or a reasonably
complete summary, if a certificate, of:

(a) The health care services and the insurance or other benefits, if any,
to which the enrollee is entitled;

(b) Any limitations on the services, kind of services, benefits or kinds
of benefits to be provided, including any deductible or co-payment
feature;

(c) Where and in what manner information is available as to how services
may be obtained;

(d) The total amount of payment for health care services and the
indemnity or service benefits, if any, which the enrollee is obligated to
pay with respect to individual contracts; and

(e) A clear and understandable description of the health maintenance
organization's method for resolving enrollee complaints, including the
health maintenance organization's toll-free customer service number and
the department of insurance's consumer complaint hot line number.

4. Any subsequent change in an evidence of coverage may be made in a
separate document issued to the enrollee.

5. A copy of the form of the evidence of coverage to be used in this
state, and any amendment thereto, shall be subject to the filing of
subsection 2 of this section unless it is subject to the jurisdiction of
the director under the laws governing health insurance or health services
corporations, in which event the filing provisions of those laws shall
apply. (L. 1983 H.B. 127, A.L. 1997 H.B. 335)

1. Every health maintenance organization shall annually, on or
before March first, file a report, verified by at least two principal
officers, with the director, covering its preceding calendar year.

2. Such report shall be on forms prescribed by the director and shall
include:

(1) A financial statement of the organization, including its balance
sheet for the preceding calendar year;

(2) Any material changes in the information submitted pursuant to
subsection 3 of section 354.405;

(3) The number of persons enrolled during the year, the number of
enrollees, as of the end of the year, and the number of enrollments
terminated during the year;

(4) A statement setting forth the amount of uncovered and covered
expenses that are payable and are more than ninety days past due for the
period of August first through December thirty-first of the preceding
year;

(5) Such other information relating to the performance of the
organization as is necessary to enable the director to carry out his
duties under sections 354.400 to 354.550. (L. 1983 H.B. 127)

CROSS REFERENCE: Forms approval required, RSMo 37.340; failure to obtain,
personal liability, RSMo 37.390

Every health maintenance organization shall make available to
its enrollees:

(1) The most recent annual statement of financial condition, including a
balance sheet and summary of receipts and disbursements;

(2) A description of the organizational structure and operation of the
health care plan and a summary of any material changes since the issuance
of the last report;

(3) A description of services and information as to where and how to
secure them; and

(4) A clear and understandable description of the health maintenance
organization's method for resolving enrollee complaints. (L. 1983 H.B.
127)

No health maintenance organization plan, medical group/staff
model, independent practice association or any other entity shall
prohibit or restrict any provider from disclosing to any subscriber,
enrollee or member any information that such provider deems appropriate
regarding the nature of treatment, risks or alternatives thereto, the
availability of other therapy, consultation or test, the decision of any
plan to authorize or deny services, or the process that the plan or any
person contracting with the plan uses or proposes to use, to authorize or
deny health care services or benefits. Any such prohibition or
restriction contained in a contract with a provider entered into after
August 28, 1997, shall be void and unenforceable. (L. 1997 H.B. 335)

1. Each enrollee, and upon request each prospective enrollee
prior to enrollment, shall be supplied with written disclosure
information. In the event of any inconsistency between any separate
written disclosure statement and the enrollee contract or evidence of
coverage, the terms of the enrollee contract or evidence of coverage
shall be controlling. The information to be disclosed in writing shall
include at a minimum the following:

(1) A description of coverage provisions, health care benefits, benefit
maximums, including benefit limitations;

(2) A description of any exclusions of coverage, including the definition
of medical necessity used in determining whether benefits will be covered;

(3) A description of all prior authorization or other requirements for
treatments and services;

(4) A description of utilization review policies and procedures used by
the health maintenance organization, including:

(a) The circumstances under which utilization review shall be undertaken;

(b) The toll-free telephone number of the utilization review agent;

(c) The time frames under which utilization review decisions shall be
made for prospective, retrospective and concurrent decisions;

(d) The right to reconsideration;

(e) The right to an appeal, including the expedited and standard appeals
processes and the time frames for such appeals;

(f) The right to designate a representative;

(g) A notice that all denials of claims shall be made by qualified
clinical personnel and that all notices of denial shall include
information about the basis of the decision; and

(h) Further appeal rights, if any;

(5) An explanation of an enrollee's financial responsibility for payment
of premiums, coinsurance, co-payments, deductibles and any other charge,
annual limits on an enrollee's financial responsibility, caps on payments
for covered services and financial responsibility for noncovered health
care procedures, treatments or services provided within the health
maintenance organization;

(6) An explanation of an enrollee's financial responsibility for payment
when services are provided by a health care provider who is not part of
the health maintenance organization's network or by any provider without
required authorization, or when a procedure, treatment or service is not
a covered health care benefit;

(7) A description of the grievance procedures to be used to resolve
disputes between a health maintenance organization and an enrollee,
including:

(a) The right to file a grievance regarding any dispute between an
enrollee and a health maintenance organization;

(b) The right to file a grievance when the dispute is about referrals or
covered benefits;

(c) The toll-free telephone number which enrollees may use to file a
grievance;

(d) The department of insurance's toll-free consumer complaint hot line
number;

(e) The time frames and circumstances for expedited and standard
grievances;

(f) The right to appeal a grievance determination and the procedures for
filing such an appeal;

(g) The time frames and circumstances for expedited and standard appeals;

(h) The right to designate a representative;

(i) A notice that all disputes involving clinical decisions shall be made
by qualified clinical personnel; and

(j) All notices of determination shall include information about the
basis of the decision and further appeal rights, if any;

(8) A description of a procedure for providing care and coverage
twenty-four hours a day, seven days a week, for emergency services. Such
description shall include the definition of emergency services and
emergency medical condition, notice that emergency services are not
subject to prior approval, and shall describe the enrollee's financial
and other responsibilities regarding obtaining such services, including
when such services are received outside the health maintenance
organization's service area;

(9) A description of procedures for enrollees to select and access the
health maintenance organization's primary and specialty care providers,
including notice of how to determine whether a participating provider is
accepting new patients;

(10) A description of the procedures for changing primary and specialty
care providers within the health maintenance organization;

(11) Notice that an enrollee may obtain a referral for covered services
to a health care provider outside of the health maintenance
organization's network or panel when the health maintenance organization
does not have a health care provider with appropriate training and
experience in the network or panel to meet the particular health care
needs of the enrollee and the procedure by which the enrollee may obtain
such referral;

(12) A description of the mechanisms by which enrollees may participate
in the development of the policies of the health maintenance organization;

(13) Notice of all appropriate mailing addresses and telephone numbers to
be utilized by enrollees seeking information or authorization;

(14) A listing by specialty, which may be in a separate document that is
updated annually, of the names, addresses and telephone numbers of all
participating providers, including facilities, and in addition in the
case of physicians, board certification; and

(15) The director of the department of insurance shall develop a standard
credentialing form which shall be used by all health carriers when
credentialing health care professionals in a managed care plan. If the
health carrier demonstrates a need for additional information, the
director of the department of insurance may approve a supplement to the
standard credentialing form. All forms and supplements shall meet all
requirements as defined by the National Committee of Quality Assurance.

2. Each health maintenance organization shall, upon request of an
enrollee or prospective enrollee, provide the following:

(1) A list of the names, business addresses and official positions of the
membership of the board of directors, officers, controlling persons,
owners or partners of the health maintenance organization;

(2) A copy of the most recent annual certified financial statement of the
health maintenance organization, including a balance sheet and summary of
receipts and disbursements prepared by a certified public accountant;

(3) A copy of the most recent individual, direct pay enrollee contracts;

(4) Information relating to consumer complaints compiled annually by the
department of insurance;

(5) The procedures for protecting the confidentiality of medical records
and other enrollee information;

(6) An opportunity to inspect drug formularies used by such health
maintenance organization and any financial interest in a pharmacy
provider utilized by such organization. The health maintenance
organization shall also disclose the process by which an enrollee or his
representative may seek to have an excluded drug covered as a benefit;

(7) A written description of the organizational arrangements and ongoing
procedures of the health maintenance organization's quality assurance
program;

(8) A description of the procedures followed by the health maintenance
organization in making decisions about the experimental or
investigational nature of individual drugs, medical devices or treatments
in clinical trials;

(9) Individual health practitioner affiliations with participating
hospitals, if any;

(10) Upon written request, written clinical review criteria relating to
conditions or diseases and, where appropriate, other clinical information
which the organization may consider in its utilization review. The health
maintenance organization may include with the information a description
of how such information will be used in the utilization review process;

(11) The written application procedures and minimum qualification
requirements for health care providers to be considered by the health
maintenance organization;

(12) A description of the procedures followed by the health maintenance
organization in making decisions about which drugs to include in the
health maintenance organization's drug formulary.

3. Nothing in this section shall prevent a health maintenance
organization from changing or updating the materials that are made
available to enrollees. (L. 1997 H.B. 335)

1. A health maintenance organization shall disclose to the
department of insurance all financial arrangements, financial interest
in, or contractual provisions with utilization review companies or any
other health care provider that would encourage or limit the type,
amount, duration and scope of services offered, restrict or limit
referral or treatment to patients, including but not limited to financial
incentives to limit, restrict or deny access to or delivery of medical or
other services prior to the delivery of such services. Capitation
arrangements between health maintenance organizations and health care
providers shall not be considered an inducement to limit, restrict or
deny access to medical services. The director shall review all financial
arrangements filed with the department of insurance to determine if such
arrangements offer an inducement to a provider to provide less than
medically necessary services to an enrollee.

2. The capitation rate to be paid from the health maintenance
organization to the health care provider is not required to be included
with the financial arrangements to be filed with the department of
insurance pursuant to subsection 1 of this section. (L. 1997 H.B. 335)

1. Notwithstanding any other provisions of chapter 354, the
director may, after a hearing, order a forfeiture to the state of
Missouri a sum not to exceed one hundred dollars for each violation by
any person knowingly violating any provision of sections 354.400 to
354.636 for which no specific punishment is provided, or order a specific
punishment in accordance with such sections. Such forfeiture may be
recovered by a civil action brought by and in the name of the department
of insurance. The civil action may be brought in the county which has
venue for an action against the person or corporation.

2. Nothing contained in this section shall be construed to prohibit the
director and the corporation or its enrollment representative from
agreeing to a voluntary forfeiture of the sum mentioned herein without
civil proceedings being instituted. Any payment under this section shall
be paid into the school fund as provided by article IX, section 7 of the
Missouri Constitution for fines and penalties. (L. 1997 H.B. 335)

Every health maintenance organization shall establish and
maintain a complaint system which provides reasonable procedures for the
resolution of written complaints initiated by enrollees. (L. 1983 H.B.
127)

With the exception of investments made in accordance with
subdivisions (1) and (2) of subsection 1 of section 354.415 and
subsection 2 of section 354.415, the investable funds of a health
maintenance organization shall be invested only in securities or other
investments permitted by the laws of this state for the investment of
assets constituting the legal reserves of life insurance companies, or
such other securities or investments as the director may permit. (L. 1983
H.B. 127)

Unless otherwise provided in sections 354.400 to 354.550, each
health maintenance organization shall deposit with the director, or with
any organization or trustee acceptable to him through which a custodial
or controlled account is utilized, cash, securities, or any combination
of these or other measures acceptable to him, in the amount set forth in
section 354.410. (L. 1983 H.B. 127)

No health maintenance organization, or representative thereof,
may cause or knowingly permit the use of advertising which is untrue or
misleading, solicitation which is untrue or misleading, or any form of
evidence of coverage which is deceptive. For purposes of sections 354.400
to 354.550:

(1) A statement or item of information shall be deemed to be untrue if it
does not conform to fact in any respect which is or may be significant to
an enrollee of, or person considering enrollment with, a health
maintenance organization;

(2) A statement or item of information shall be deemed to be misleading,
whether or not it may be literally untrue, if, in the total context in
which such statement is made or such item of information is communicated,
such statement or item of information may be reasonably understood by a
reasonable person, not possessing special knowledge regarding health care
coverage, as indicating any benefit or advantage or the absence of any
exclusion, limitation, or disadvantage of possible significance to an
enrollee of, or person considering enrollment in, a health maintenance
organization plan, if such benefit, advantage, or absence of limitation,
exclusion, or disadvantage does not, in fact, exist;

(3) An evidence of coverage shall be deemed to be deceptive if the
evidence of coverage, taken as a whole, is misleading. (L. 1983 H.B. 127
§ 354.460 subsec. 1)

An enrollee may not be disenrolled nor denied renewal except for
the failure to pay the charge for such coverage, for fraudulent misuse of
the system, for abusive conduct, for failure to establish a proper
patient-physician relationship, or for such other reasons as may be
allowed in rules promulgated by the director. (L. 1983 H.B. 127 § 354.460
subsec. 2)

No health maintenance organization, unless licensed as an
insurer, may use in its name, contracts, or literature any of the words
"insurance", "casualty", "surety", "mutual", or any other words
descriptive of the insurance, casualty, or surety business or deceptively
similar to the name or description of any insurance or surety corporation
doing business in this state when such words are deceptive or misleading.
No person, if not in possession of a valid certificate of authority
issued pursuant to sections 354.400 to 354.550, may use the phrase
"health maintenance organization" or "HMO" in the course of its
operation. (L. 1983 H.B. 127 § 354.460 subsec. 3)

1. The director, or any duly appointed representative, may make
an examination of the affairs of any health maintenance organization as
often as he deems it necessary for the protection of the interests of the
people of this state, but not less frequently than once every three years.

2. All costs incurred by the state as a result of making examinations
under this section shall be paid by the organization being examined and
remitted directly to the examiner or examiners conducting the examination
on billings approved by the director. (L. 1983 H.B. 127)

1. The director may suspend, revoke or place conditions or
restrictions on any certificate of authority issued to a health
maintenance organization pursuant to sections 354.400 to 354.636 if the
director finds that any of the following conditions exist:

(1) The health maintenance organization is operating significantly in
contravention of its basic organizational document or in a manner
contrary to that described in any other information submitted pursuant to
section 354.405, unless amendments to such submissions have been filed
with and approved by the director;

(2) The health maintenance organization issues evidence of coverage or
uses a schedule of charges for health care services which do not comply
with the requirements of section 354.430;

(3) The health maintenance organization does not provide nor arrange for
basic health care services;

(4) The health maintenance organization is no longer financially
responsible and may reasonably be expected to be unable to meet its
obligations to enrollees or prospective enrollees;

(5) The health maintenance organization has failed to implement a
mechanism affording the enrollees an opportunity to participate in
matters of policy and operation as required pursuant to section 354.420;

(6) The health maintenance organization has failed to implement the
complaint system required by section 354.450 in a manner designed to
reasonably resolve valid complaints;

(7) The health maintenance organization has advertised or merchandised
its services in an untrue, misrepresentative, misleading, deceptive, or
unfair manner;

(8) The continued operation of the health maintenance organization would
be hazardous to its enrollees;

(9) The person operating the health maintenance organization is in
violation of the provisions of sections 375.930 to 375.948, RSMo, except
to the extent that the director has determined that the nature of health
maintenance organizations renders the application of such sections
clearly inappropriate; notwithstanding the foregoing, paragraph (b) of
subdivision (11) of section 375.936, RSMo, shall not apply to health
maintenance organizations;

(10) The health maintenance organization has otherwise failed to
substantially comply with sections 354.400 to 354.636.

2. A certificate of authority shall be suspended, revoked, or be subject
to conditions or restrictions only after compliance with the requirements
of section 354.490.

3. When the certificate of authority of a health maintenance organization
is suspended, the health maintenance organization shall not, during the
period of such suspension, enroll any additional enrollees except newborn
children or other newly acquired dependents of existing enrollees, and
shall not engage in any advertising or solicitation whatsoever.

4. When the certificate of authority of a health maintenance organization
is revoked, such health maintenance organization shall proceed,
immediately following the effective date of the order of revocation, to
wind up its affairs, and shall conduct no further business except as may
be essential to the orderly conclusion of the affairs of such
organization. It shall engage in no further advertising or solicitation
whatsoever. The director may, by written order, permit such further
operation of the health maintenance organization as the director may find
to be in the best interest of enrollees, to the end that enrollees will
be afforded the greatest practical opportunity to obtain continuing
health care coverage. (L. 1983 H.B. 127, A.L. 1997 H.B. 335)

1. An insurance company licensed in this state, or a health
services corporation authorized to do business in this state, may
directly or through a subsidiary or affiliate, organize and operate a
health maintenance organization under the provisions of sections 354.400
to 354.550 so long as they comply with the provisions of section 354.410
as applicable thereto. Notwithstanding any other law to the contrary, any
two or more such insurance companies, health services corporations, or
subsidiaries or affiliates thereof, may jointly organize and operate a
health maintenance organization.

2. Notwithstanding any other provision of law pertaining to insurance and
health services corporations to the contrary, an insurer or a health
services corporation may contract with a health maintenance organization
to provide insurance or similar protection against the cost of care
provided through health maintenance organizations and to provide coverage
in the event of the failure of the health maintenance organization to
meet its obligations. The enrollees of a health maintenance organization
shall be deemed to constitute a permissible group under such laws. Among
other things, under such contracts, the insurer or health services
corporation may make benefit payments to health maintenance organizations
for health care services rendered by providers. (L. 1983 H.B. 127)

1. Any rehabilitation, liquidation, or conservation of a health
maintenance organization shall be deemed to be the rehabilitation,
liquidation, or conservation of an insurance company and shall be
conducted under the supervision of the director pursuant to the laws
governing the rehabilitation, liquidation, or conservation of an
insurance company. The director may apply for an order directing him to
rehabilitate, liquidate, or conserve a health maintenance organization
upon any one or more grounds set out in section* 354.355, or section
375.560, RSMo, or when, in his opinion, the continued operation of the
health maintenance organization would be hazardous either to the
enrollees or to the people of this state. Enrollees shall have the same
priority in the event of liquidation or rehabilitation granted the
policyholders of an insurer.

2. A claim by a health care provider for any uncovered expenditures has
priority over claims of other health care providers, provided such
provider of services agrees not to assert such claim against any enrollee
of the health maintenance organization. (L. 1983 H.B. 127)

*Word "chapter" appears in original rolls.

The director may promulgate such reasonable rules and
regulations in accordance with chapter 536, RSMo, as are necessary or
proper to carry out the provisions of sections 354.400 to 354.550. (L.
1983 H.B. 127)

1. When the director has cause to believe that grounds for the
denial of an application for a certificate of authority exist, that
grounds for the suspension or revocation of a certificate of authority
exist, or that grounds for the imposition of restrictions or conditions
on a certificate of authority exist, the director shall notify the health
maintenance organization in writing, specifically stating the grounds for
denial, suspension, revocation, or conditions or restrictions and fixing
a time of at least twenty days thereafter for a hearing on the matter.

2. After such hearing, or upon the failure of the health maintenance
organization to appear at such hearing, the director shall take action as
is deemed advisable, on the basis of written findings, which shall be
mailed to the health maintenance organization. The action of the director
shall be subject to review by the circuit court having jurisdiction. The
court may, in disposing of the issue before it, modify, affirm, or
reverse the order of the director in whole or in part.

3. The provisions of chapter 536, RSMo, shall apply to proceedings
pursuant to this section to the extent they are not in conflict with
subsections 1 and 2 of this section. (L. 1983 H.B. 127, A.L. 1997 H.B.
335)

Every health maintenance organization subject to sections
354.400 to 354.550 shall pay to the director the following fees:

(1) Issuance or renewal of certificate of

authority .................................... $150.00

(2) Filing of articles of amendment .............. 1.00

(3) Filing each annual statement ................. 100.00

(4) Filing articles of acceptance and issuing

a certificate of acceptance .................. 20.00

(5) Filing any other statement or report ......... 20.00

(6) For the certification of any document, and

affixing the seal thereto .................... 10.00

(7) For filing statement and pertinent admission

papers required of a foreign health

maintenance organization ..................... 200.00

(8) For each appointment of an agent by the

health maintenance organization .............. 5.00

(9) For copies of papers, records and documents

filed in the office of the director, an

amount not to exceed, at the director's

discretion ................................... 1.00

per page

(10) For each service of process upon the

director, on behalf of the health

maintenance organization .................... 10.00 (L. 1983 H.B. 127)

1. If the director shall for any reason have cause to believe
that any violation of sections 354.400 to 354.550 has occurred or is
about to occur, the director may give notice to the health maintenance
organization and to the representatives, or other persons who appear to
be involved in such suspected violation, to arrange a conference with the
alleged violators, or potential violators, or their authorized
representatives, for the purpose of attempting to ascertain the facts
relating to such suspected or potential violation, and, in the event it
appears that any violation has occurred or is about to occur, to arrive
at an adequate and effective means of correcting or preventing such
violation. Proceedings under this subsection shall not be governed by any
formal procedural requirements, and may be conducted in such manner as
the director may deem appropriate under the circumstances.

2. The director may issue an order directing a health maintenance
organization, or a representative of a health maintenance organization,
to cease and desist from engaging in any act or practice in violation of
the provisions of sections 354.400 to 354.550. Within twenty days after
service of the order to cease and desist, the respondent may request a
hearing on the question of whether acts or practices in violation of
sections 354.400 to 354.550 have occurred. Such hearing shall be
conducted, and judicial review shall be available, as provided in chapter
536, RSMo.

3. In the case of noncompliance with a cease and desist order issued
pursuant to subsection 2 of this section, the director may institute a
proceeding to obtain injunctive or other appropriate relief, in the
circuit court. (L. 1983 H.B. 127)

1. Provisions of the insurance law and provisions of health
services corporation laws shall not be applicable to any health
maintenance organization granted a certificate of authority under
sections 354.400 to 354.636 unless made specifically applicable by
statute. This provision shall not apply to an insurer or health services
corporation licensed and regulated pursuant to the insurance laws of the
health services corporation laws of this state except with respect to its
health maintenance organization activities authorized and regulated
pursuant to sections 354.400 to 354.636.

2. Solicitation of enrollees by a health maintenance organization granted
a certificate of authority, or its duly authorized representatives, shall
not be construed to violate any provision of law relating to solicitation
or advertising by health professionals. (L. 1983 H.B. 127, A.L. 1997 H.B.
335)

All applications, filings, and reports required under sections
354.400 to 354.550 shall be treated as public documents. (L. 1983 H.B.
127)

1. Any data or information pertaining to the diagnosis,
treatment, or health of any enrollee or applicant obtained from such
person, or from any provider, by any health maintenance organization
shall be held in confidence and shall not be disclosed to any person
except as follows:

(1) To the extent that it may be necessary to carry out the purposes of
sections 354.400 to 354.636;

(2) Upon the express consent of the enrollee or applicant;

(3) Pursuant to statute or court order for the production of evidence or
the discovery thereof;

(4) In the event of a claim or litigation between such person and the
health maintenance organization wherein such data or information is
pertinent. A health maintenance organization shall be entitled to claim
any statutory privileges against such disclosure which the provider who
furnishes such information to the health maintenance organization is
entitled to claim, but no such claim or privilege against disclosure may
be made against the director by such health maintenance organization.

2. Every health maintenance organization shall establish and maintain
procedures to ensure that all mental health records of enrollees remain
confidential. Such procedures and any subsequent amendments thereto shall
be filed annually with the director. (L. 1983 H.B. 127, A.L. 1997 H.B.
335)

No person may take a tender for, or a request or invitation for
tenders of, or enter into an agreement to exchange securities for, or
acquire in the open market or otherwise, any voting security of a health
maintenance organization, nor enter into any other agreement which if,
after the consummation thereof, that person would, directly or
indirectly, or by conversion or by exercise of any right to acquire, be
in control of the health maintenance organization. No person may enter
into an agreement to merge or consolidate with, or to otherwise acquire
control of a health maintenance organization, unless, at the time any
offer, request, or invitation is made, or any agreement is entered into,
or prior to the acquisition of the securities if no offer or agreement is
involved, the person has filed with the director, and has sent to the
health maintenance organization, information required by chapter 382,
RSMo, and the offer, request, invitation, agreement, or acquisition has
been approved by the director. Such approval by the director shall be
governed by the provisions of chapter 382, RSMo. (L. 1983 H.B. 127)

No employer in this state shall be required to pay more for
health benefits as a result of the application of this section than would
otherwise be required by any prevailing collective bargaining agreement,
or other contract, for the provision of health benefits to its employees;
provided, that the employer or benefits fund shall pay to the health
maintenance organization chosen by each employee or member an amount
equal to the lesser of (a) the amount paid on behalf of its other
employees or members for health benefits; or (b) the health maintenance
organization's charge for coverage approved by the director pursuant to
section 354.435. (L. 1983 H.B. 127)

If any section, term, or provision of sections 354.400 to
354.550 shall be adjudged invalid for any reason, such judgment shall not
affect, impair, or invalidate any other section, term, or provision of
sections 354.400 to 354.550, but the remaining sections, terms, and
provisions shall be and remain in full force and effect. (L. 1983 H.B.
127)

1. If a pharmacy, operated by or contracted with by a health
maintenance organization, is closed or is unable to provide health care
services to an enrollee in an emergency, a pharmacist may take an
assignment of such enrollee's right to reimbursement, if the policy or
contract provides for such reimbursement, for those goods or services
provided to an enrollee of a health maintenance organization. No health
maintenance organization shall refuse to pay the pharmacist any payment
due the enrollee under the terms of the policy or contract.

2. No health maintenance organization, conducting business in the state
of Missouri, shall contract with a pharmacy, pharmacy distributor or
wholesale drug distributor, nonresident or otherwise, unless such
pharmacy or distributor has been granted a permit or license from the
Missouri board of pharmacy to operate in this state.

3. Every health maintenance organization shall apply the same
coinsurance, co-payment and deductible factors to all drug prescriptions
filled by a pharmacy provider who participates in the health maintenance
organization's network if the provider meets the contract's explicit
product cost determination. If any such contract is rejected by any
pharmacy provider, the health maintenance organization may offer other
contracts necessary to comply with any network adequacy provisions of
this act*. However, nothing in this section shall be construed to
prohibit the health maintenance organization from applying different
coinsurance, co-payment and deductible factors between generic and brand
name drugs.

4. Health maintenance organizations shall not set a limit on the quantity
of drugs which an enrollee may obtain at any one time with a
prescription, unless such limit is applied uniformly to all pharmacy
providers in the health maintenance organization's network.

5. Health maintenance organizations shall not insist or mandate any
physician or other licensed health care practitioner to change an
enrollee's maintenance drug unless the provider and enrollee agree to
such change. For the purposes of this provision, a maintenance drug shall
mean a drug prescribed by a practitioner who is licensed to prescribe
drugs, used to treat a medical condition for a period greater than thirty
days. Violations of this provision shall be subject to the penalties
provided in section 354.444. Notwithstanding other provisions of law to
the contrary, health maintenance organizations that change an enrollee's
maintenance drug without the consent of the provider and enrollee shall
be liable for any damages resulting from such change. Nothing in this
subsection, however, shall apply to the dispensing of generically
equivalent products for prescribed brand name maintenance drugs as set
forth in section 338.056, RSMo. (L. 1983 H.B. 127, A.L. 1997 H.B. 335,
A.L. 1998 H.B. 1302)

*"This act" in 1997 referred to H.B. 335, 1997, which contained numerous
sections. "This act" now also includes H.B. 1302, 1998. Consult
Disposition of Sections tables for both years for definitive listings.

(2000) Section is not preempted by Employee Retirement Income Security
Act (ERISA). Express Scripts, Inc. v. Wenzel, 102 F.Supp.2d 1135
(W.D.Mo.).

(2001) Section falls within savings clause of Employee Retirement Income
Security Act (ERISA) as a regulation of insurance. Express Scripts, Inc.
v. Wenzel, 262 F.3d 829 (8th Cir.).

A health maintenance organization approved and regulated under
the laws of another bordering state may be admitted to do business in
this state by satisfying the director that it is fully and legally
organized under the laws of its state, and that it complies with all
requirements for health maintenance organizations organized within
Missouri. The director may waive or modify the provisions of sections
354.400 to 354.550 if he determines that the same are not appropriate or
necessary to a* particular health maintenance organization of another
state. (L. 1983 H.B. 127)

*Word "a" does not appear in original rolls.

The provisions of sections 354.400 to 354.550 shall not apply to
any labor organization's health plan providing services established and
maintained solely for its members and their dependents, and facilities of
not-for-profit corporations in existence on October 1, 1980, subject
either to the provisions and regulations of section 302 of the
Labor-Management Relations Act, 29 U.S.C. 186 or the Labor-Management
Reporting and Disclosure Act, 29 U.S.C. 401-538. (L. 1983 H.B. 127)

1. A health maintenance organization shall allow enrollees to
seek a second medical opinion or consultation from the health maintenance
organization's choice of other primary care physicians and specialty
physicians at no additional cost to the enrollee beyond what the enrollee
would otherwise pay for an initial medical opinion or consultation.

2. If an enrollee chooses to seek a second medical opinion, and if the
health maintenance organization does not employ or contract with another
physician with the expertise necessary to provide a second medical
opinion, then the health maintenance organization shall arrange for a
referral to a physician with the necessary expertise to provide a second
opinion or consultation and ensure that the enrollee obtains the covered
benefit at no greater cost to the enrollee than if the benefit were
obtained from participating physicians. (L. 1998 S.B. 754)

CROSS REFERENCE: Second medical opinions covered, when, RSMo 354.207

The provisions of sections 354.400 to 354.550 shall not apply to
community health corporations as defined by Public Law 94-63 so long as
such corporations limit their activities to those described in Public Law
94-63. (L. 1983 H.B. 127)

1. Missouri licensed health maintenance organizations shall be
permitted to offer point of service riders (POS) to their approved health
plan products, without being required to obtain a separate license as a
health insurer pursuant to chapter 376, RSMo, so long as medical and
hospital expenses incurred under the POS rider do* not exceed ten percent
of total medical and hospital expenses incurred for all health plan
products sold.

2. Health maintenance organizations which have been licensed for at least
one calendar year, who choose to insure the POS rider, shall maintain a
net worth of the greater of:

(1) One million two hundred thousand dollars; or

(2) Two percent of total premium revenue for the immediately preceding
twelve months plus fifty percent of uncovered liabilities as reported in
the immediately preceding calendar quarter.

3. Health maintenance organizations which have been licensed for less
than one calendar year, who choose to insure the POS rider, shall
maintain a net worth of the greater of:

(1) One million two hundred thousand dollars; or

(2) Ten percent of the yearly average of the three-year annual premium
plus fifty percent of its average annual uncovered liabilities as
projected in its application for a certificate of authority.

4. The department of insurance may modify the net worth requirements for
a health maintenance organization which has been licensed for less than
one calendar year if its actual results deviate materially from its
projections. In addition to any other deposit required of a licensed
health maintenance organization pursuant to section 354.410, any health
maintenance organization which chooses to issue a POS rider shall deposit
an additional six hundred thousand dollars** with the director of the
department of insurance. Any health maintenance organization which issues
a POS rider whose medical and hospital expenses incurred under the POS
rider exceed*** ten percent of total medical and hospital expenses
incurred for all health plan products sold shall either cease insuring
new POS riders until it comes into compliance with the ten percent
limitation of this section or meet the minimum net worth requirements and
all other statutory and regulatory requirements of a Missouri domestic
life insurance company. (L. 1997 H.B. 335 § 11)

*Word "does" appears in original rolls.

**Word "dollars" does not appear in original rolls.

***Word "exceeds" appears in original rolls.

1. A community-based health maintenance organization shall have
available and accessible a sufficient number and type of physicians,
specialists, and other providers as needed to:

(1) Provide the benefits covered by the plan;

(2) Meet the medical needs of the health plan's enrolled population;

(3) Provide members with a reasonable choice of primary care physicians
and specialty physicians.

2. If a community-based health maintenance organization does not employ
or contract with a physician with the expertise necessary to provide
medically necessary care covered by the health plan, then the health
maintenance organization shall arrange for a referral to a physician with
the necessary expertise and ensure that the members obtain the covered
benefit at no greater cost to the member than if the benefit were
obtained from participating physicians.

3. A community-based health maintenance organization's physicians,
physician specialists and facilities shall be reasonably available.
Primary health care services shall be in reasonable proximity to a
member's personal residence or business, with due consideration given to
the availability of physicians within the community-based health
maintenance organization's service area. This provision shall not
preclude a community-based health maintenance organization from arranging
for the provision of member care outside the service area for a higher
level of skill or specialty care than is available within the service
area. (L. 1997 H.B. 335 § 1)

Each community-based health maintenance organization shall offer
coverage that allows an enrollee who suffers from a life-threatening
condition or a degenerative, disabling condition requiring a regimen of
specialized medical treatment lasting for six months or more to receive a
standing referral for specialty care case management by a physician or
specialty care center with expertise in treating the condition. Under
such specialty care case management, the provider shall coordinate
primary and specialty care for the enrollee under a treatment plan
approved by the health maintenance organization in consultation with the
enrollee's primary care provider and the specialist physician or
specialty care center. (L. 1997 H.B. 335 § 2)

1. The terms of office of the trustees elected by the enrollees
of the community-based health maintenance organization shall begin
immediately upon their election.

2. If a vacancy occurs in the office of a trustee, the vacancy shall be
filled for the unexpired term in the same manner as the office was
previously filled, except that the board of trustees may appoint a
qualified person to fill the vacancy in the office of an elected enrollee
until the next regular election at which time an enrollee of the
community- based health maintenance organization shall be elected for the
unexpired term.

3. The elections of the enrollee members of the board of trustees shall
be arranged for, managed and conducted by the board of trustees of the
community-based health maintenance organization. (L. 1997 H.B. 335 § 3)

A community-based health maintenance organization shall provide
each prospective purchaser of its services with the following marketing
materials prior to enrollment:

(1) A list of the health care providers who have a contractual agreement
to provide services under the plan of coverage. It shall be a violation
of the unfair trade practices act for a community-based health
maintenance organization to falsely list that a provider has a
contractual agreement to provide services under its plan of coverage;

(2) Information to describe how the community-based health maintenance
organization will use utilization management to promote efficiency in the
delivery of services in accordance with the terms of the contract for
coverage. This information shall explain how the community- based health
maintenance organization will encourage the use of treatment options that
produce the most cost-effective results. The format and content of the
descriptive information disclosed under this subdivision shall be
approved by the department of insurance and shall include information
regarding covered benefits available under the plan;

(3) Disclosure of grievance procedures established in accordance with
regulations promulgated by the department of insurance for
community-based health maintenance organizations. Included in this
information shall be notification of how and when to contact the health
plan and the department of insurance regarding a grievance; and

(4) Notice of the availability of coverage as described in section
354.554. (L. 1997 H.B. 335 § 4)

No community-based health maintenance organization shall
prohibit or restrict any provider from disclosing to any subscriber,
enrollee or member any information that such provider deems appropriate
regarding the nature of treatment, risks or alternatives thereto, the
availability of other therapy, consultation or test, the decision of any
plan to authorize or deny services, or to process the plan or any person
to authorize or deny services, or to process the plan or any person
contracting with the plan uses or proposes to use, to authorize or deny
health care services or benefits. Any such prohibition or restriction
contained in a contract with a provider entered into after August 28,
1997, shall be void and unenforceable. The standards used to determine if
a community-based health maintenance organization has prohibited or
restricted a provider's disclosure in violation of this section shall be
those established by federal regulation of the Health Care Financing
Administration for use in regulating managed care plans serving Medicare
enrollees. (L. 1997 H.B. 335 § 5)

1. The director of the department of insurance shall adopt rules
governing the use of payment arrangements by community-based health
maintenance organizations which use payment withholding arrangements that
place a physician at substantial financial risk. The standards for
determining substantial financial risk and determining which payment
arrangements are subject to rules shall be the same as provided for
health maintenance organizations and competitive medical plans
contracting with the Medicare program, as provided in 42 CFR 417.479, or
its successor regulation.

2. The department of insurance may require that community-based health
maintenance organizations disclose to the department financial
arrangements or contractual provisions that place a physician at
substantial financial risk. Such financial arrangements and contractual
provisions which constitute substantial financial risk for the physician
shall be reviewed by the department and shall be deemed approved if not
disapproved by the director of the department within thirty days from the
date that they are filed with the department.

3. The department of insurance shall promulgate rules governing the
confidentiality of proprietary information disclosed to the department
pursuant to this section. Proprietary information disclosed pursuant to
this section shall not be construed to be a public record as defined in
chapter 610, RSMo. (L. 1997 H.B. 335 § 6)

The director of the department of insurance shall promulgate
rules governing grievance procedures for enrollees of a community-based
health maintenance organization. Such regulations shall be consistent
with and not less or more stringent than federal regulations governing
grievance procedures promulgated by the Health Care Financing
Administration of the United States Department of Health and Human
Services for Medicare enrollees in managed care plans. (L. 1997 H.B. 335
§ 7)

If the Health Care Financing Administration of the United States
Department of Health and Human Services promulgates regulations governing
the practice of utilization review in health maintenance organizations
serving enrollees in the Medicare program, the director of the department
of insurance may issue rules to apply those standards to community-based
health maintenance organizations as defined in subdivision (3) of section
354.400. (L. 1997 H.B. 335 § 8)

The director of the department of insurance shall designate
those health maintenance organizations which meet the criteria
established in subdivision (3) of section 354.400 as community-based
health maintenance organizations. After a community-based health
maintenance organization has been so designated for two years, the
director may revoke such designation at any time thereafter upon finding
that the health maintenance organization has ceased to meet the
established criteria for community- based health maintenance
organizations. (L. 1997 H.B. 335 § 9)

Community-based health maintenance organizations shall be
subject to the same provisions of law as other health maintenance
organizations to the extent they are not inconsistent with the provisions
of sections 354.552 to 354.567. (L. 1997 H.B. 335 § 10)

No rule or portion of a rule promulgated pursuant to sections
192.068, RSMo, 354.603, 376.423, 376.1353, 376.1356, 376.1378, 376.1387,
RSMo, * 354.560, 354.562 and 354.563 shall become effective unless it has
been promulgated in accordance with the provisions of chapter 536, RSMo.
(L. 1997 H.B. 335 § 14)

*"376.1390," appears in original rolls, but was not enacted by H.B. 335,
1997.

For purposes of sections 354.600 to 354.636 the following terms
shall mean:

(1) "Covered benefit" or "benefit", a health care service to which an
enrollee is entitled under the terms of a health benefit plan;

(2) "Director", the director of the department of insurance;

(3) "Emergency medical condition", the sudden and, at the time,
unexpected onset of a health condition that manifests itself by symptoms
of sufficient severity that would lead a prudent lay person, possessing
an average knowledge of medicine and health, to believe that immediate
medical care is required, which may include, but shall not be limited to:

(a) Placing the person's health in significant jeopardy;

(b) Serious impairment to a bodily function;

(c) Serious dysfunction of any bodily organ or part;

(d) Inadequately controlled pain; or

(e) With respect to a pregnant woman who is having contractions:

a. That there is inadequate time to effect a safe transfer to another
hospital before delivery; or

b. That transfer to another hospital may pose a threat to the health or
safety of the woman or unborn child;

(4) "Emergency service", a health care item or service furnished or
required to screen and stabilize an emergency medical condition, which
may include, but shall not be limited to, health care services that are
provided in a licensed hospital's emergency facility by an appropriate
provider;

(5) "Enrollee", a policyholder, subscriber, covered person or other
individual participating in a health benefit plan;

(6) "Facility", an institution providing health care services or a health
care setting, including but not limited to, hospitals and other licensed
inpatient centers, ambulatory surgical or treatment centers, skilled
nursing facilities, residential treatment centers, diagnostic, laboratory
and imaging centers, and rehabilitation and other therapeutic health
settings;

(7) "Health benefit plan", a policy, contract, certificate or agreement
entered into, offered or issued by a health carrier to provide, deliver,
arrange for, pay for or reimburse any of the costs of health care
services;

(8) "Health care professional", a physician or other health care
practitioner licensed, accredited or certified by the state of Missouri
to perform specified health services;

(9) "Health care provider" or "provider", a health care professional or a
facility;

(10) "Health care service", a service for the diagnosis, prevention,
treatment, cure or relief of a health condition, illness, injury or
disease;

(11) "Health carrier", a health maintenance organization established
pursuant to sections 354.400 to 354.636;

(12) "Health indemnity plan", a health benefit plan that is not a managed
care plan;

(13) "Intermediary", a person authorized to negotiate and execute
provider contracts with health carriers on behalf of health care
providers or on behalf of a network;

(14) "Managed care plan", a health benefit plan that either requires an
enrollee to use, or creates incentives, including financial incentives,
for an enrollee to use health care providers managed, owned, under
contract with or employed by the health carrier;

(15) "Network", the group of participating providers providing services
to a managed care plan;

(16) "Participating provider", a provider who, under a contract with the
health carrier or with its contractor or subcontractor, has agreed to
provide health care services to enrollees with an expectation of
receiving payment, other than coinsurance, co-payments or deductibles,
directly or indirectly from the health carrier;

(17) "Person", an individual, a corporation, a partnership, an
association, a joint venture, a joint stock company, a trust, an
unincorporated organization, any similar entity or any combination of the
foregoing; and

(18) "Primary care professional" or "primary care provider", a
participating health care professional designated by the health carrier
to supervise, coordinate or provide initial care or continuing care to an
enrollee, and who may be required by the health carrier to initiate a
referral for specialty care and maintain supervision of health care
services rendered to the enrollee. (L. 1997 H.B. 335)

1. A health carrier shall maintain a network that is sufficient
in number and types of providers to assure that all services to enrollees
shall be accessible without unreasonable delay. In the case of emergency
services, enrollees shall have access twenty-four hours per day, seven
days per week. The health carrier's medical director shall be responsible
for the sufficiency and supervision of the health carrier's network.
Sufficiency shall be determined by the director in accordance with the
requirements of this section and by reference to any reasonable criteria,
including but not limited to provider-enrollee ratios by specialty,
primary care provider-enrollee ratios, geographic accessibility,
reasonable distance accessibility criteria for pharmacy and other
services, waiting times for appointments with participating providers,
hours of operation, and the volume of technological and specialty
services available to serve the needs of enrollees requiring
technologically advanced or specialty care.

(1) In any case where the health carrier has an insufficient number or
type of participating providers to provide a covered benefit, the health
carrier shall ensure that the enrollee obtains the covered benefit at no
greater cost than if the benefit was obtained from a participating
provider, or shall make other arrangements acceptable to the director.

(2) The health carrier shall establish and maintain adequate arrangements
to ensure reasonable proximity of participating providers, including
local pharmacists, to the business or personal residence of enrollees. In
determining whether a health carrier has complied with this provision,
the director shall give due consideration to the relative availability of
health care providers in the service area under, especially rural areas,
consideration.

(3) A health carrier shall monitor, on an ongoing basis, the ability,
clinical capacity, and legal authority of its providers to furnish all
contracted benefits to enrollees. The provisions of this subdivision
shall not be construed to require any health care provider to submit
copies of such health care provider's income tax returns to a health
carrier. A health carrier may require a health care provider to obtain
audited financial statements if such health care provider received ten
percent or more of the total medical expenditures made by the health
carrier.

(4) A health carrier shall make its entire network available to all
enrollees unless a contract holder has agreed in writing to a different
or reduced network.

2. A health carrier shall file with the director, in a manner and form
defined by rule of the department of insurance, an access plan meeting
the requirements of sections 354.600 to 354.636 for each of the managed
care plans that the health carrier offers in this state. The health
carrier may request the director to deem sections of the access plan as
proprietary or competitive information that shall not be made public. For
the purposes of this section, information is proprietary or competitive
if revealing the information will cause the health carrier's competitors
to obtain valuable business information. The health carrier shall provide
such plans, absent any information deemed by the director to be
proprietary, to any interested party upon request. The health carrier
shall prepare an access plan prior to offering a new managed care plan,
and shall update an existing access plan whenever it makes any change as
defined by the director to an existing managed care plan. The director
shall approve or disapprove the access plan, or any subsequent
alterations to the access plan, within sixty days of filing. The access
plan shall describe or contain at a minimum the following:

(1) The health carrier's network;

(2) The health carrier's procedures for making referrals within and
outside its network;

(3) The health carrier's process for monitoring and assuring on an
ongoing basis the sufficiency of the network to meet the health care
needs of enrollees of the managed care plan;

(4) The health carrier's methods for assessing the health care needs of
enrollees and their satisfaction with services;

(5) The health carrier's method of informing enrollees of the plan's
services and features, including but not limited to the plan's grievance
procedures, its process for choosing and changing providers, and its
procedures for providing and approving emergency and specialty care;

(6) The health carrier's system for ensuring the coordination and
continuity of care for enrollees referred to specialty physicians, for
enrollees using ancillary services, including social services and other
community resources, and for ensuring appropriate discharge planning;

(7) The health carrier's process for enabling enrollees to change primary
care professionals;

(8) The health carrier's proposed plan for providing continuity of care
in the event of contract termination between the health carrier and any
of its participating providers, in the event of a reduction in service
area or in the event of the health carrier's insolvency or other
inability to continue operations. The description shall explain how
enrollees shall be notified of the contract termination, reduction in
service area or the health carrier's insolvency or other modification or
cessation of operations, and transferred to other health care
professionals in a timely manner; and

(9) Any other information required by the director to determine
compliance with the provisions of sections 354.600 to 354.636.

3. In reviewing an access plan filed pursuant to subsection 2 of this
section, the director shall deem a managed care plan's network to be
adequate if it meets one or more of the following criteria:

(1) The managed care plan is a Medicare + Choice coordinated care plan
offered by the health carrier pursuant to a contract with the federal
Centers for Medicare and Medicaid Services;

(2) The managed care plan is being offered by a health carrier that has
been accredited by the National Committee for Quality Assurance at a
level of "accredited" or better, and such accreditation is in effect at
the time the access plan is filed;

(3) The managed care plan's network has been accredited by the Joint
Commission on the Accreditation of Health Organizations for Network
Adequacy, and such accreditation is in effect at the time the access plan
is filed. If the accreditation applies to only a portion of the managed
care plan's network, only the accredited portion will be deemed adequate;
or

(4) The managed care plan is being offered by a health carrier that has
been accredited by the Utilization Review Accreditation Commission at a
level of "accredited" or better, and such accreditation is in effect at
the time the access plan is filed. (L. 1997 H.B. 335, A.L. 2001 H.B. 328
& 88, A.L. 2003 H.B. 121)

1. A health carrier shall establish a mechanism by which the
participating provider shall be notified on an ongoing basis of the
specific covered health services for which the provider shall be
responsible, including any limitations or conditions on services.

2. Every contract between a health carrier and a participating provider
shall set forth a hold harmless provision specifying protection for
enrollees. This requirement shall be met by including a provision
substantially similar to the following:

"Provider agrees that in no event, including but not limited to
nonpayment by the health carrier or intermediary, insolvency of the
health carrier or intermediary, or breach of this agreement, shall the
provider bill, charge, collect a deposit from, seek compensation,
remuneration or reimbursement from, or have any recourse against an
enrollee or a person, other than the health carrier or intermediary,
acting on behalf of the enrollee for services provided pursuant to this
agreement. This agreement shall not prohibit the provider from collecting
coinsurance, deductibles or co-payments, as specifically provided in the
evidence of coverage, or fees for uncovered services delivered on a
fee-for-service basis to enrollees. This agreement shall not prohibit a
provider, except for a health care professional who is employed full time
on the staff of a health carrier and has agreed to provide service
exclusively to that health carrier's enrollees and no others, and an
enrollee from agreeing to continue services solely at the expense of the
enrollee, as long as the provider has clearly informed the enrollee that
the health carrier may not cover or continue to cover a specific service
or services. Except as provided herein, this agreement does not prohibit
the provider from pursuing any available legal remedy; including, but not
limited to, collecting from any insurance carrier providing coverage to a
covered person."

3. Every contract between a health carrier and a participating provider
shall set forth that in the event of a health carrier's or intermediary's
insolvency or other cessation of operations, covered services to
enrollees shall continue through the period for which a premium has been
paid to the health carrier on behalf of the enrollee or until the
enrollee's discharge from an inpatient facility, whichever time is
greater.

4. The contract provisions satisfying the requirements of subsections 2
and 3 of this section shall:

(1) Be construed in favor of the enrollee;

(2) Survive the termination of the contract regardless of the reason for
termination, including the insolvency of the health carrier; and

(3) Supersede any oral or written contrary agreement between a provider
and an enrollee or the representative of an enrollee if the contrary
agreement is inconsistent with the hold harmless and continuation of
covered services provisions required by subsections 2 and 3 of this
section.

5. In no event shall a participating provider collect or attempt to
collect from an enrollee any money owed to the provider by the health
carrier nor shall a participating provider collect or attempt to collect
from an enrollee any money in excess of the coinsurance, co-payments or
deductibles. Failure of a health carrier to make timely payment of an
amount owed to a provider in accordance with the provider's contract
shall constitute an unfair claims settlement practice subject to sections
375.1000 to 375.1018, RSMo.

6. (1) A health carrier shall develop selection standards for
participating primary care professionals and each participating health
care professional specialty. Such standards shall be in writing and used
in determining the selection of health care professionals by the health
carrier, its intermediaries and any provider networks with which it
contracts. Selection criteria shall not be established in a manner that
will:

(a) Allow a health carrier to avoid a high-risk population by excluding a
provider because such provider is located in a geographic area that
contains a population presenting a risk of higher than average claims,
losses or health services utilization; or

(b) Exclude a provider because such provider treats or specializes in
treating a population presenting a risk of higher than average claims,
losses or health services utilization.

(2) Paragraphs (a) and (b) of subdivision (1) of this subsection shall
not be construed to prohibit a health carrier from declining to select a
provider who fails to meet the other legitimate selection criteria of the
health carrier developed in compliance with sections 354.600 to 354.636.

(3) The provisions of sections 354.600 to 354.636 shall not require a
health carrier, its intermediaries or the provider networks with which it
contracts, to employ specific providers or types of providers, or to
contract with or retain more providers or types of providers than are
necessary to maintain an adequate network.

7. A health carrier shall file its selection standards for participating
providers with the director. A health carrier shall also file any
subsequent changes to its selection standards with the director. The
selection standards shall be made available to licensed health care
providers.

8. A health carrier shall notify a participating provider of the
provider's responsibilities with respect to the health carrier's
applicable administrative policies and programs, including but not
limited to payment terms, utilization review, quality assessment and
improvement programs, credentialing, grievance procedures, data reporting
requirements, confidentiality requirements and any applicable federal or
state programs.

9. No contract between a health carrier and a provider for the delivery
of health care service, entered into or renewed after August 28, 2001,
shall require the mandatory use of a hospitalist. For purposes of this
subsection, "hospitalist" means a physician who becomes a physician of
record at a hospital for a patient of a participating provider and who
may return the care of the patient to that participating provider at the
end of hospitalization.

10. A health carrier shall not offer an inducement under the managed care
plan to a provider to provide less than medically necessary services to
an enrollee.

11. A health carrier shall not prohibit a participating provider from
advocating in good faith on behalf of enrollees within the utilization
review or grievance processes established by the health carrier or a
person contracting with the health carrier.

12. A health carrier shall require a provider to make health records
available to appropriate state and federal authorities involved in
assessing the quality of care but shall not disclose individual
identities, or investigating the grievances or complaints of enrollees,
and to comply with the applicable state and federal laws related to the
confidentiality of medical or health records.

13. The rights and responsibilities of a provider under a contract
between a health carrier and a participating provider shall not be
assigned or delegated by the provider without the prior written consent
of the health carrier.

14. A health carrier shall be responsible for ensuring that a
participating provider furnishes covered benefits to all enrollees
without regard to the enrollee's enrollment in the plan as a private
purchaser of the plan or as a participant in a publicly financed program
of health care service.

15. A health carrier shall notify the participating providers of their
obligations, if any, to collect applicable coinsurance, co-payments or
deductibles from enrollees pursuant to the evidence of coverage, or of
the providers' obligations, if any, to notify enrollees of their personal
financial obligations for noncovered services.

16. A health carrier shall not penalize a provider because the provider,
in good faith, reports to state or federal authorities any act or
practice by the health carrier that may jeopardize patient health or
welfare.

17. A health carrier shall establish a mechanism by which a participating
provider may determine in a timely manner whether a person is covered by
the carrier.

18. A health carrier shall not discriminate between health care
professionals when selecting such professionals for enrollment in the
network or when referring enrollees for health care services to be
provided by such health care professional who is acting within the scope
of his professional license.

19. A health carrier shall establish procedures for resolution of
administrative, payment or other disputes between providers and the
health carrier.

20. A contract between a health carrier and a provider shall not contain
definitions or other provisions that conflict with the definitions or
provisions contained in the managed care plan or sections 354.600 to
354.636. (L. 1997 H.B. 335, A.L. 2001 H.B. 328 & 88)

1. A health carrier and a participating provider shall provide
at least sixty days written notice to each other before terminating the
contract without cause. The written notice shall include an explanation
of why the contract is being terminated. The health carrier shall provide
written notice within thirty working days of receipt or issuance of a
notice of termination to all enrollees who are patients seen on a regular
basis by the provider whose contract is terminating, irrespective of
whether the termination was for or without cause. Where a contract
termination involves a primary care professional, all enrollees who are
patients of such professional shall be notified. Within fifteen working
days of the date that the provider either gives or receives notice of
termination, the provider shall supply the health carrier with a list of
those patients of the provider that are covered by a plan of the health
carrier.

2. (1) A health carrier shall not terminate a contract with a health care
professional unless the health carrier provides to the health care
professional a written explanation of the reasons for the proposed
contract termination and an opportunity for a review or hearing as
hereinafter provided. This subsection shall not apply in cases involving
imminent harm to patients, a determination of fraud, or a final
disciplinary action by a state licensing board or other governmental
agency.

(2) The notice of the proposed contract termination provided by the
health carrier to the health care professional shall include:

(a) The reasons for the proposed action;

(b) Notice that the health care professional has the right to request a
hearing or review, at the professional's discretion, before a panel
appointed by the health carrier;

(c) A time limit of not less than thirty days within which a health care
professional may request a hearing; and

(d) A time limit for a hearing date which shall be held within thirty
days after the date of receipt of a request for a hearing.

(3) The hearing panel shall be comprised of at least three persons
appointed by the health carrier. At least one person on such panel shall
be a clinical peer in the same discipline and the same or similar
specialty as the health care professional under review. The hearing panel
may consist of more than three persons, provided however that the number
of clinical peers on such panel shall constitute one-third or more of the
total membership of the panel.

(4) The hearing panel shall render a decision on the proposed action
within fifteen days after a hearing. Such decision shall include
reinstatement of the health care professional by the health carrier,
provisional reinstatement subject to conditions set forth by the health
carrier or termination of the health care professional. Such decision
shall be provided in writing to the health care professional.

(5) A decision by the hearing panel to terminate a health care
professional shall be effective not less than thirty days after the
receipt by the health care professional of the hearing panel's decision.

(6) In no event shall termination be effective earlier than sixty days
from the receipt of the notice of termination.

3. Either party to a contract may exercise a right of nonrenewal at the
expiration of the contract period set forth therein or upon sixty days'
notice to the other party; provided, however, that any nonrenewal shall
not constitute a termination for purposes of this section.

4. A health carrier shall develop and implement policies and procedures
to ensure that a health care professional is regularly informed of
information maintained by the health carrier to evaluate the performance
or practice of the health care professional. The health carrier shall
consult with health care professionals in developing methodologies to
collect and analyze health care professional profiling data. The health
carrier shall provide any such information and profiling data and
analysis to the health care professionals. Such information, data or
analysis shall be provided on a periodic basis appropriate to the nature
and amount of data and the volume and scope of services provided. Any
profiling data used to evaluate the performance or practice of a health
care professional shall be measured against stated criteria and an
appropriate group of health care professionals using similar treatment
modalities serving a comparable patient population. Upon presentation of
such information or data, each health care professional shall be given
the opportunity to discuss the unique nature of the health care
professional's patient population which may have a bearing on the health
care professional's profile and to work cooperatively with the health
carrier to improve performance.

5. No health carrier shall terminate a contract or employment solely or
in part because a health care provider in good faith:

(1) Advocates on behalf of an enrollee;

(2) Files a complaint against the health carrier;

(3) Appeals a decision of the health carrier;

(4) Provides information or files a report with the department of
insurance; or

(5) Requests a hearing or review pursuant to this section.

6. A health carrier shall give a provider at least thirty days to review
a managed care contract. (L. 1997 H.B. 335)

1. Contracts between health plans and providers shall include a
provision for the continuation of care to enrollees for a period of up to
ninety days by a provider who terminates or is terminated from a network
where the continuation of care is medically necessary and in accordance
with the dictates of medical prudence, including circumstances such as
disability, pregnancy, or life-threatening illness.

2. Such provision for the continuation of care shall guarantee that the
enrollee shall not be liable to the provider for any amounts owed for
medical care other than deductibles or co-payment amounts specified in
the certificate of coverage or other contract between the enrollee and
the health plan.

3. In the event the terminated provider is authorized to continue
treating the enrollee pursuant to this section, the health plan shall
have an obligation to pay the terminated provider at the previously
contracted rate for services provided to the enrollee. (L. 1997 H.B. 335)

1. If a health carrier determines that it does not have a health
care provider with appropriate training and experience in its panel or
network to meet the particular health care needs of an enrollee, the
health carrier shall make a referral to an appropriate provider, pursuant
to a treatment plan approved by the health carrier in consultation with
the primary care provider, the nonparticipating provider and the enrollee
or enrollee's designee, at no additional cost to the enrollee beyond what
the enrollee would otherwise pay for services received within the network.

2. A health carrier shall have a procedure by which an enrollee who needs
ongoing care from a specialist may receive a standing referral to such
specialist. If the health carrier, or the primary care provider in
consultation with the medical director of the health carrier and an
appropriate specialist, determines that such a standing referral is
warranted, the carrier shall make such a referral to a specialist. In no
event shall a health carrier be required to permit an enrollee to elect
to have a nonparticipating specialist, except pursuant to the provisions
of subsection 1 of this section. Such referral shall be pursuant to a
treatment plan approved by the health carrier in consultation with the
primary care provider, the specialist, and the enrollee or the enrollee's
designee. Such treatment plan may limit the number of visits or the
period during which such visits are authorized and may require the
specialist to provide the primary care provider with regular updates on
the specialty care provided, as well as all necessary medical information.

3. A health carrier shall have a procedure by which a new enrollee upon
enrollment, or an enrollee upon diagnosis, with a life-threatening
condition or disease or a degenerative and disabling condition or
disease, either of which requires specialized medical care over a
prolonged period of time, may receive a referral to a specialist with
expertise in treating the life-threatening or degenerative and disabling
disease or condition who shall be responsible for and capable of
providing and coordinating the enrollee's primary and specialty care. If
the health carrier, or primary care provider in consultation with a
medical director of the health carrier and an appropriate specialist,
determines that the enrollee's care would most appropriately be
coordinated by such a specialist, the health carrier shall refer the
enrollee to such specialist. In no event shall a health carrier be
required to permit an enrollee to elect to have a nonparticipating
specialist, except pursuant to the provisions of subsection 1 of this
section. Such referral shall be pursuant to a treatment plan approved by
the health carrier, in consultation with the primary care provider if
appropriate, the specialist, and the enrollee or the enrollee's designee.
Such specialist shall be permitted to treat the enrollee without a
referral from the enrollee's primary care provider and may authorize such
referrals, procedures, tests and other medical services as the enrollee's
primary care provider would otherwise be permitted to provide or
authorize, subject to the terms of the treatment plan. If a health
carrier refers an enrollee to a nonparticipating provider, services
provided pursuant to the approved treatment plan shall be provided at no
additional cost to the enrollee beyond what the enrollee would otherwise
pay for services received within the network.

4. A health carrier shall have a procedure by which an enrollee with a
life-threatening condition or disease, or a degenerative and disabling
condition or disease, either of which requires specialized medical care
over a prolonged period of time, may receive a referral to a specialty
care center with expertise in treating the life-threatening or
degenerative and disabling disease or condition. If the health carrier,
or the primary care provider or a specialist designated pursuant to this
section, in consultation with a medical director of the health carrier,
determines that the enrollee's care would most appropriately be provided
by such a specialty care center, the health carrier shall refer the
enrollee to such center. In no event shall a health carrier be required
to permit an enrollee to elect to have a nonparticipating specialty care
center, unless the health carrier does not have an appropriate specialty
care center to treat the enrollee's disease or condition within its
network. Such referral shall be pursuant to a treatment plan developed by
the specialty care center and approved by the health carrier, in
consultation with the primary care provider, if any, or a specialist
designated pursuant to subsection 3 of this section, and the enrollee or
the enrollee's designee. If a health carrier refers an enrollee to a
specialty care center that does not participate in the health carrier's
network, services provided pursuant to the approved treatment plan shall
be provided at no additional cost to the enrollee beyond what the
enrollee would otherwise pay for services received within the network.
For purposes of this subsection, a specialty care center shall mean only
such centers as are accredited or designated by an agency of the state or
federal government or by a voluntary national health organization as
having special expertise in treating the life- threatening disease or
condition or degenerative and disabling disease or condition for which it
is accredited or designated. (L. 1997 H.B. 335)

1. A health carrier shall be required to offer as an additional
health plan, an open referral health plan whenever it markets a
gatekeeper group plan as an exclusive or full replacement health plan
offering to a group contract holder:

(1) In the case of group health plans offered to employers of fifty or
fewer employees, the decision to accept or reject the additional open
referral plan offering shall be made by the group contract holder. For
health plans marketed to employers of over fifty employees, the decision
to accept or reject shall be made by the employee;

(2) Contracts currently in existence shall offer the additional open
referral health plan at the next annual renewal after August 28, 1997;
however, multiyear group contracts need not comply until the expiration
of their current multiyear term unless the group contract holder elects
to comply before that time;

(3) If an employer provides more than one health plan to its employees
and at least one is an open referral plan, then all health benefit plans
offered by such employer shall be exempt from the requirements of this
section.

2. For the purposes of this act, the following terms shall mean:

(1) "Open referral plan", a plan in which the enrollee is allowed to
obtain treatment for covered benefits without a referral from a primary
care physician from any person licensed to provide such treatment;

(2) "Gatekeeper group plan", a plan in which the enrollee is required to
obtain a referral from a primary care professional in order to access
specialty care.

3. Any health benefit plan provided pursuant to the Medicaid program
shall be exempt from the requirements of this section.

4. A health carrier shall have a procedure by which a female enrollee may
seek the health care services of an obstetrician/gynecologist at least
once a year without first obtaining prior approval from the enrollee's
primary care provider if the benefits are covered under the enrollee's
health benefit plan, and the obstetrician/gynecologist is a member of the
health carrier's network. In no event shall a health carrier be required
to permit an enrollee to have health care services delivered by a
nonparticipating obstetrician/gynecologist. An obstetrician/gynecologist
who delivers health care services directly to an enrollee shall report
such visit and health care services provided to the enrollee's primary
care provider. A health carrier may require an enrollee to obtain a
referral from the primary care physician, if such enrollee requires more
than one annual visit with an obstetrician/gynecologist.

5. Except for good cause, a health carrier shall be prohibited either
directly, or indirectly through intermediaries, from discriminating
between eye care providers when selecting among providers of health
services for enrollment in the network and when referring enrollees for
health services provided within the scope of those professional licenses
and when reimbursing amounts for covered services among persons duly
licensed to provide such services. For the purposes of this section, an
eye care provider may be either an optometrist licensed pursuant to
chapter 336, RSMo, or a physician who specializes in opthamologic
medicine, licensed pursuant to chapter 334, RSMo.

6. Nothing contained in this section shall be construed as to require a
health carrier to pay for health care services not provided for in the
terms of a health benefit plan.

7. Any health carrier, which is sponsored by a federally qualified health
center and is presently in existence and which has been in existence for
less than three years shall be exempt from this section for a period not
to exceed two years from August 28, 1997.

8. A health carrier shall not be required to offer the direct access
rider for a group contract holder's health benefit plan if the health
benefit plan is being provided pursuant to the terms of a collective
bargaining agreement with a labor union, in accordance with federal law
and the labor union has declined such option on behalf of its members.

9. Nothing in this act shall be construed to preempt the employer's right
to select the health care provider pursuant to section 287.140, RSMo, in
a case where an employee incurs a work-related injury covered by the
provisions of chapter 287, RSMo.

10. Nothing contained in this act shall apply to certified managed care
organizations while providing medical treatment to injured employees
entitled to receive health benefits under chapter 287, RSMo, pursuant to
contractual arrangements with employers, or their insurers, under section
287.135, RSMo. (L. 1997 H.B. 335, A.L. 1999 H.B. 343)

1. Intermediaries and participating providers with whom they
contract shall comply with all the applicable requirements of sections
354.600 to 354.636.

2. A health carrier's statutory responsibility to monitor the offering of
covered benefits to enrollees shall not be delegated or assigned to the
intermediary.

3. If applicable, an intermediary shall transmit utilization
documentation and claims paid documentation to the health carrier. The
carrier shall monitor the timeliness and appropriateness of payments made
to providers and health care services received by enrollees.

4. If applicable, an intermediary shall maintain the books, records,
financial information and documentation of services provided to enrollees
at its principal place of business in the state and preserve them for
five years in a manner that facilitates regulatory review.

5. An intermediary shall allow a health carrier or the director access to
the intermediary's books, records, financial information and any
documentation of services provided to enrollees, as necessary to
determine compliance with sections 354.600 to 354.636.

6. A health carrier shall have the right, in the event of the
intermediary's insolvency, to require the assignment to the health
carrier of the provisions of a provider's contract addressing the
provider's obligation to furnish covered services. (L. 1997 H.B. 335)

1. A health carrier shall file with the director all contract
forms proposed for use with its participating providers and
intermediaries. The forms shall not contain any information on
compensation terms, rates or other payments by the carrier to
participating providers or intermediaries and shall contain information
on any term involving risk-sharing arrangements between the parties.

2. The health carrier shall maintain provider and intermediary contracts
at its principal place of business in the state, or the health carrier
shall have access to all contracts and provide copies to facilitate
regulatory review upon twenty days' prior written notice from the
director or at the time of any examination. (L. 1997 H.B. 335)

1. The executing of a contract by a health carrier shall not
relieve the health carrier of its liability to any person with whom it
has contracted for the provision of services, or of its responsibility
for compliance with the law or applicable regulations.

2. All contracts shall be in writing and may be subject to review by the
department of insurance.

3. All contracts shall comply with applicable requirements of the law and
applicable regulations. (L. 1997 H.B. 335)

All provider and intermediary contracts delivered, issued for
delivery, continued or renewed on or after January 1, 1998, shall comply
with sections 354.600 to 354.636 unless otherwise provided by sections
354.600 to 354.636. (L. 1997 H.B. 335)

As used in sections 354.650 to 354.658, the following terms mean:

(1) "Department", the department of health and senior services;

(2) "Essential community provider", an individual physician, licensed
pursuant to the provisions of chapter 334, RSMo, who meets the
requirements set forth in section 354.652;

(3) "Health care insurer", any health maintenance organization licensed
in the state of Missouri;

(4) "Health professional shortage area", an area designated by the
Secretary of Health and Human Services as such pursuant to the guidelines
established in Section 332(a)(1)(A) of the Public Service Act;

(5) "Medically underserved area", an area designated by the Secretary of
Health and Human Services as such pursuant to the guidelines established
in Section 42 U.S.C. 254c(b)(3);

(6) "Medically underserved population", eligible persons designated by
the Secretary of Health and Human Services as such pursuant to the
guidelines established in 42 U.S.C. 254c(b)(3);

(7) "National committee for quality assurance", a private not-for-profit
organization created to promote improvements in the quality of patient
care provided through managed care plans. The committee's primary
function is to develop and provide oversight processes, performance
measurement and accreditation for health plans, and to provide
information on quality to the public, consumers, purchasers, health plans
and other relevant parties;

(8) "Principal site", the private office of a primary care or specialist
physician located within a medically underserved area or health
professional shortage area in which initial patient care appointments,
routine patient care examinations, routine patient treatments and patient
care follow-up occur. The term "principal site" shall not include
hospitals, laboratories, nursing homes, hospice centers, surgical centers
and federally funded clinics. (L. 1998 H.B. 1302 § 1)

Any physician seeking a designation as an essential community
provider shall:

(1) Apply to the director of the department;

(2) Document to the department that at least forty percent of the
physician's practice is comprised of:

(a) Medicaid or uninsured patients, or both; or

(b) A combination of paragraph (a) and Medicare or underinsured patients,
or both;

(3) Serve a medically underserved area or a health professional shortage
area;

(4) Serve a medically underserved population;

(5) Spend at least twenty hours per week at a principal site;

(6) Be available to a medically underserved population on evenings and
weekends at a principal site;

(7) Hold hospital staff privileges with a participating network hospital
of the health care insurer;

(8) Not be a direct employee of a health care insurer, a for profit or a
not-for-profit hospital or health services corporation; and

(9) Meet the following quality standards in accordance with guidelines
established by the National Committee for Quality Assurance:

(a) A current valid license to practice;

(b) Clinical privileges in good standing at the hospital designated by
the physician as the primary admitting facility;

(c) A valid Drug Enforcement Agency or Controlled Dangerous Substances
certificate, if applicable;

(d) Graduation from medical school, and completion of a residency or
board certification if applicable;

(e) Work history;

(f) Current adequate malpractice insurance according to the managed care
organization's policy; and

(g) Professional liability claims history. (L. 1998 H.B. 1302 § 2)

1. The department of health and senior services shall issue a
letter of designation as an essential community provider to any physician
who makes a written request and application to the department if such
physician meets the qualifications of an essential community provider
pursuant to the provisions of section 354.652.

2. The department shall keep the names and addresses of all essential
community providers on record and shall release such information upon
request.

3. The department shall promulgate rules and regulations for the
administration of this section. Any rule or portion of a rule, as that
term is defined in section 536.010, RSMo, that is promulgated under the
authority of this section, shall become effective only if the agency has
fully complied with all of the requirements of chapter 536, RSMo,
including but not limited to, section 536.028, RSMo, if applicable, after
August 28, 1998. All rulemaking authority delegated prior to August 28,
1998, is of no force and effect and repealed as of August 28, 1998,
however nothing in this act* shall be interpreted to repeal or affect the
validity of any rule adopted and promulgated prior to August 28, 1998. If
the provisions of section 536.028, RSMo, apply, the provisions of this
section are nonseverable and if any of the powers vested with the general
assembly pursuant to section 536.028, RSMo, to review, to delay the
effective date, or to disapprove and annul a rule or portion of a rule
are held unconstitutional or invalid, the purported grant of rulemaking
authority and any rule so proposed and contained in the order of
rulemaking shall be invalid and void, except that nothing in this act*
shall affect the validity of any rule adopted and promulgated prior to
August 28, 1998. (L. 1998 H.B. 1302 § 3)

*"This act" (H.B. 1302, 1998) contains numerous sections. Consult
Disposition of Sections table for definitive listing.

1. Any health care insurer offering or marketing a group policy,
plan or contract for health care services in an area designated pursuant
to subdivision (4) or (5) of section 354.650 shall allow each essential
community provider in such designated area to submit an application to
such health care insurer and provide a copy of the letter of designation
as provided in section 354.654. No health care insurer shall be required
to offer a provider contract to an essential community provider. The
department of health and senior services shall receive any application
submitted and certify, if qualified; except that the department shall
only issue the first one thousand certificates for application to health
maintenance organizations.

2. The name of each essential community provider shall appear in
publications distributed to consumers or enrollees of the policy, plan or
contract of all network model managed care plans if the essential
community provider is a participating primary care physician.

3. Nothing in this section shall be construed to limit the ability of a
health care insurer to terminate the contract of any physician for cause.

4. The requirements of this section shall not apply to a health care
insurer that is a medical group/staff model health maintenance
organization that provides services to its enrollees through facilities
that are owned or operated by the health maintenance organization. (L.
1998 H.B. 1302 § 4)

1. The designation of essential community provider shall not be
transferable to another physician, health care provider or entity.

2. The designation of essential community provider shall be physician and
site specific and shall not be effective at a site that has not been so
designated pursuant to subdivision (8) of section 354.650.

3. The essential community provider shall submit an annual affidavit to
the department stating that such community provider continues to meet the
qualifications for which the provider was certified. The essential
community provider shall notify the department of health and senior
services within thirty days of any changes which may affect the
certification requirements of the essential community provider. (L. 1998
H.B. 1302 § 5)

As used in sections 354.700 to 354.723, the following terms mean:

(1) "Dental care services", services included in the practice of
dentistry as defined in section 332.071, RSMo;

(2) "Director", the director of the department of insurance;

(3) "Enrollee", an individual who is enrolled in a prepaid dental plan as
a principal subscriber together with such individual's dependents who are
entitled to dental care benefits under the plan solely because of their
status as dependents of the principal subscriber;

(4) "Prepaid dental plan", any contractual arrangement to provide, either
directly or through arrangement with others, specified dental benefits to
enrollees on a fixed prepayment basis or as a benefit of such enrollees'
participation or membership in any other contract, agreement, or group or
any corporation, partnership or other entity which undertakes to provide
or arrange specified dental benefits on a prepayment or other basis or to
indemnify for specified dental benefits;

(5) "Prepaid dental plan corporation", a corporation operating a prepaid
dental plan;

(6) "Provider", any person licensed as a dentist pursuant to chapter 332,
RSMo. (L. 1987 S.B. 272 § 1, A.L. 1992 S.B. 698)

*Transferred 1988; formerly 379.900

1. A prepaid dental plan may not be established or operated in
this state, nor may membership be solicited in such a plan unless the
plan is offered by a prepaid dental plan corporation licensed under
sections 354.700 to 354.723. The provisions of sections 354.700 to
354.723 shall not apply to an insurance company, or health services
corporation or health maintenance organization licensed to do business
pursuant to the laws of the state of Missouri.

2. By January 1, 1988, any person or other legal entity that is operating
a prepaid dental plan in this state must submit an application for a
certificate of authority to the director. Each such applicant may
continue to operate until the director acts upon the application.

3. A prepaid dental plan corporation shall not be subject to the laws of
this state relating to insurance or insurance companies except as herein
provided. (L. 1987 S.B. 272 § 2)

*Transferred 1988; formerly 379.902

1. The director of the department of insurance may issue an
order directing any person or entity to cease and desist from engaging in
any act or practice in violation of sections 354.700 to 354.723. Within
twenty days after service of the order to cease and desist, the
respondent may request a hearing on the question of whether acts or
practices in violation of sections 354.700 to 354.723, have occurred.
Such hearing shall be conducted, and judicial review shall be available,
as provided in chapter 536, RSMo.

2. In the case of noncompliance with a cease and desist order issued
pursuant to subsection 1 of this section, the director may institute a
proceeding to obtain injunctive or other appropriate relief in the
circuit court. (L. 1989 S.B. 333)

An application for a certificate of authority to operate a
prepaid dental plan corporation in this state shall be filed with the
director on a form prescribed by the director. Such application shall be
verified by an officer or authorized representative of the applicant and
shall set forth, or be accompanied by, the following:

(1) A duly certified copy of the corporation's articles of incorporation
or articles of association with all amendments;

(2) A copy of the corporation's bylaws or regulations governing the
conduct of the internal affairs of the corporation;

(3) A list of the names, addresses, and official positions of the persons
who are responsible for the conduct of the affairs of the corporation,
including all members of the board of directors;

(4) A copy of any contract made or to be made between any providers and
the applicant;

(5) A statement generally describing the prepaid dental plan to be
offered and the corporation's facilities and personnel;

(6) A copy of contracts and contract certificates to be issued to the
enrollees;

(7) A copy of any group enrollee contract which is to be issued;

(8) Financial statements showing the applicant's assets, liabilities, and
sources of financial support. If the applicant's financial affairs are
audited by independent certified public accountants, a copy of the
applicant's most recent regular certified financial statement shall
satisfy this requirement unless the director determines that additional
or more recent financial information is required;

(9) A description of the proposed method of marketing the prepaid dental
plan, a financial plan which includes a three-year projection of the
initial operating results anticipated, and a statement as to the sources
of funding;

(10) A description of the procedures to provide emergency dental benefits;

(11) A statement reasonably describing the geographic area to be served;

(12) A fee of two hundred dollars for issuance of a certificate of
authority; and

(13) Such other information as the director may require. (L. 1987 S.B.
272 § 3)

*Transferred 1988; formerly 379.904

1. Issuance of a certificate of authority shall be granted by
the director if the director is satisfied that the following conditions
are met:

(1) The financial requirements of sections 354.700 to 354.723 have been
fulfilled;

(2) The prepaid dental plan corporation is financially responsible and
may reasonably be expected to meet its obligations to enrollees and
prospective enrollees;

(3) The persons responsible for conducting the affairs of the prepaid
dental plan corporation are competent and trustworthy and are
professionally capable of providing or arranging for the provision of
services offered;

(4) The arrangement with dentists for the provision of prepaid dental
care services has been deemed sufficient; and

(5) Each officer responsible for conducting the affairs of the prepaid
dental plan corporation has filed with the director, subject to the
director's approval, a fidelity bond in the amount of fifty thousand
dollars.

2. A certificate of authority shall expire at twelve midnight on June
thirtieth next following the date of issuance or renewal. If the prepaid
dental plan corporation remains in compliance with sections 354.700 to
354.723 and has paid a renewal fee of fifty dollars, its certificate
shall be renewed for a period of time to the next June thirtieth. (L.
1987 S.B. 272 § 4)

*Transferred 1988; formerly 379.905

1. No prepaid dental plan corporation may commence or continue
to do business with a capital of less than fifty thousand and a surplus
of less than fifty thousand dollars.

2. No prepaid dental plan corporation may commence or continue to do
business until the company has transferred to and deposited with the
director, for the security of its enrollees, cash, securities, or a bond
in the amount of the minimum capital of fifty thousand dollars. Such
securities or bond shall be of a type approved by the director. The
director shall not receive securities at an amount above their par value
or above their current market value, whichever is less. If the market
value of the securities on deposit falls below the minimum capital amount
of fifty thousand dollars, the company shall deposit additional
securities to equal the minimum amount.

(1) The cash or securities representing the deposit required by this
section shall be deposited with the director who shall give receipts for
all securities so deposited with him to the prepaid dental care
corporation. The director shall upon the receipt of such securities
deposit the same, in the presence of an authorized officer of the
depositing corporation, in a safety deposit box accessible only to the
director or his representative and an authorized employee of the
corporation, or in the vault of any bank, trust company, or safety
deposit company in the state of Missouri to be selected by the director,
and the depositing corporation shall pay the fees for such boxes. So long
as the depositing corporation continues solvent, the director shall
permit such corporation to collect and receive the interest and dividends
on the securities so deposited, and, from time to time, withdraw any such
securities on depositing other acceptable securities in the place of
those so withdrawn. If the director willfully fails, refuses, or neglects
to faithfully keep, deposit, and account for any such securities received
by him, or willfully fails, refuses, or neglects to furnish proper
certificate of securities so held by him, the director shall be
responsible therefor upon his official bond, and suit may be brought upon
such bond by any person damaged by such failure, refusal, or neglect.

(2) An unpaid final judgment arising upon an enrollee contract or
contract certificate shall be a lien on the deposit prescribed by this
subsection, subject to execution after thirty days from the entry of
final judgment. If the deposit is reduced, it shall be replenished within
twenty days by the prepaid dental care corporation.

(3) Upon the liquidation or dissolution of a prepaid dental plan
corporation and the satisfaction of all its debts and liabilities, any
balance remaining of the deposit shall be returned by the director to the
prepaid dental plan corporation.

(4) The deposit prescribed by this subsection shall not apply with
respect to a prepaid dental plan corporation which is funded by a
federal, state, or municipal government or by any political subdivision
thereof to the extent and for such period of time that the prepaid dental
plan corporation can demonstrate to the director the presence of
operational commitments from such sources equivalent to such deposit.

3. The director may waive any of the requirements of subsection 1 or 2,
or both, of this section for any prepaid dental plan corporation, if it
is shown to his satisfaction that such corporation possesses not less
than fifty thousand dollars equity in unencumbered fixed assets. (L. 1987
S.B. 272 § 5)

*Transferred 1988; formerly 379.907

1. Every prepaid dental plan organization shall, not later than
January 1, 1994, have accumulated reserves in the amount of two percent
of its subscription income up to a maximum amount of one hundred fifty
thousand dollars. One-third of such reserves shall be accumulated not
later than January 1, 1990. Two-thirds of such reserves shall be
accumulated not later than January 1, 1992. Such reserves shall
constitute restricted surplus on the books of the company and shall be in
addition to the deposit requirement of section 354.707. A prepaid dental
plan organization shall maintain as a claim or loss reserve in cash or
securities, assets sufficient to discharge all liabilities on all
uncovered expenses arising under policies issued. Such liabilities on
uncovered expenses shall be determined in accordance with generally
accepted accounting principles for the actual contractual obligations
with providers and shall not be recorded as unearned premium or deferred
revenue.

2. The reserve prescribed by subsection 1 of this section shall not apply
with respect to a prepaid dental plan corporation which is funded by a
federal, state, or municipal government or by any political subdivision
thereof and which meets the requirements of subdivision (4) of subsection
2 of section 354.707.

3. Any prepaid dental plan in existence prior to January 1, 1987, will
have five years to meet the surplus requirements of subsection 1 of
section 354.707. However, at no time shall the liabilities of a prepaid
plan exceed its assets.

4. The reserve prescribed by subsection 1 of this section, and the
fidelity bond prescribed by section 354.705, shall not be required of any
prepaid dental plan operated and offered by any provider prior to August
28, 1987, which primarily serves low-income patients. (L. 1987 S.B. 272 §
6, A.L. 1990 H.B. 998, A.L. 1992 S.B. 698, A.L. 1997 S.B. 150)

*Transferred 1988; formerly 379.910

1. Every enrollee in a prepaid dental plan corporation shall be
issued a contract setting out the dental care benefits covered by his
prepayment or fee. If the enrollee is a beneficiary under a group
contract, then the enrollee may alternatively be issued a contract
certificate summarizing the dental care benefits covered by the
prepayment.

2. Any contract that provides family coverage shall, as to such coverage
of individuals in the family, also provide that the benefits applicable
for children shall be payable with respect to a newly born child of the
insured from the instant of such child's birth to the same extent that
such coverage applies to other individuals in the family. If payment of a
specific premium or capitation amount is required to provide coverage for
a child, the contract may require notification of birth of a newly born
child and payment of the required premium or capitation amount shall be
furnished to the corporation within thirty-one days after the date of
birth in order to have the coverage continue beyond the thirty-one-day
period.

3. No enrollee contract, contract certificate, or contract amendment
shall be issued or delivered to any person in this state until a copy of
the form has been filed with the director.

4. All enrollee contracts or contract certificates shall clearly set
forth:

(1) The prepaid dental care benefits to which the enrollee is entitled;

(2) Any limitations of the benefits to be provided, including any
deductible or co-payment feature;

(3) Where and in what manner information is available as to how services
may be obtained; and

(4) The enrollee's obligation respecting charges for the prepaid dental
plan contract.

5. Enrollee contracts, contract certificates, advertising matter, and
sales material shall not contain any provision or statements that are
deceptive, ambiguous, or misleading.

6. No enrollee contract, contract certificate, or contract amendments
shall be used until such form is approved by the director. If the
director does not approve or disapprove any such form within thirty days
after its filing, it shall be deemed approved. If the director
disapproves a form, the director shall notify the prepaid dental plan
corporation in writing and specify the reasons for disapproval. The
director shall grant a hearing on such disapproval within fifteen days
after a request in writing is received from the prepaid dental plan
corporation. (L. 1987 S.B. 272 § 7)

*Transferred 1988; formerly 379.912

1. Any provider of dental health care services who agrees with a
prepaid dental plan corporation to provide dental care services to its
enrollees shall reduce such agreement to a written contract with the
prepaid dental plan corporation.

2. Each prepaid dental plan corporation shall establish procedures for
review and mediation of complaints of enrollees concerning the quality of
care rendered by a participating dentist. In lieu of establishing such
procedures, the corporation may agree in a written document submitted to
the director to utilize the services of a peer review committee of a
state, district, or local dental society which has been established for
purposes of providing the type of review and mediation required.
Enrollees and participating dentists shall be made aware of the review
mechanism adopted by the prepaid dental plan corporation and shall be
informed as to how to submit a complaint for review. (L. 1987 S.B. 272 §
8)

*Transferred 1988; formerly 379.915

1. The director, or any person authorized by him, may examine
the financial condition and the affairs and management of any prepaid
dental plan corporation whenever the director deems necessary.

2. The director, or any of his duly appointed agents, may compel the
attendance before him, and may examine, under oath, the directors,
officers, agents, employees, solicitors, or any person, in reference to
the condition, affairs, management of the business, or any matters
relating thereto. The director may administer oaths or affirmations, and
shall have power to summon and compel the attendance of witnesses, and to
require and compel the production of records, books, papers, contracts,
or other documents if necessary.

3. The expense of any examination shall be assessed by the director
against the prepaid dental plan corporation examined and the examination
assessment shall be paid by the corporation, on the order of the
director, directly to the person or persons rendering the service.

4. In lieu of making an examination, the director may accept a full
report of the most recent examination of a foreign or alien prepaid
dental plan corporation certified by the appropriate examining official
of another state, territory, commonwealth or district of the United
States. (L. 1987 S.B. 272 § 9)

*Transferred 1988; formerly 379.917

1. Every prepaid dental plan corporation shall file with the
director annually, on or before March first, a report verified by at
least two principal officers covering the preceding calendar year.

2. Such report shall be on forms prescribed by the director and shall
include:

(1) A financial statement of the corporation, including its balance sheet
and receipts and disbursements for the preceding year;

(2) Any material changes in the information submitted pursuant to section
354.704;

(3) The number of persons enrolled during the year, the number of
enrollees as of the end of the year, and the number of enrollments
terminated during the year. (L. 1987 S.B. 272 § 10)

*Transferred 1988; formerly 379.920

1. A prepaid dental plan corporation shall register the names of
all persons acting as agents, for the solicitation of contracts, with the
director within thirty days after September 28, 1987.

2. The director may, after notice and hearing, promulgate reasonable
rules and regulations to provide for the licensing of agents and the
termination or revocation of such licenses. (L. 1987 S.B. 272 § 11)

*Transferred 1988; formerly 379.921

1. The director may suspend or revoke any certificate of
authority issued to a prepaid dental plan corporation pursuant to
sections 354.700 to 354.723 if he finds that any of the following
conditions exist:

(1) The prepaid dental plan corporation is operating substantially in
contravention of its basic organizational document or is not fulfilling
its contracts;

(2) The prepaid dental plan corporation issues a contract, contract
certificate or amendment which has not been filed with the director and
approved or deemed approved by the director;

(3) The prepaid dental plan corporation is no longer financially
responsible and may reasonably be expected to be unable to meet its
contractual obligations to enrollees, or prospective enrollees;

(4) The prepaid dental plan corporation, or any person on its behalf, has
advertised or merchandised its prepaid dental benefits in an untrue,
misrepresentative, misleading, deceptive or unfair manner;

(5) The continued operation of the prepaid dental plan corporation would
be hazardous to its enrollees; or

(6) The prepaid dental plan corporation has failed to substantially
comply with the provisions of sections 354.700 to 354.723 or any rules or
regulations promulgated thereunder.

2. When the director believes that grounds for the suspension or
revocation of the corporation's certificate of authority exists, he shall
notify the corporation in writing, stating the grounds and fixing a date
and time for a hearing. At least twenty days' notice of such hearing
shall be given. The hearing and any appeals therefrom shall be in
accordance with chapter 536, RSMo.

3. The director may, in lieu of the suspension or revocation of the
corporation's certification of authority, file suit in circuit court to
seek a civil penalty in an amount not less than one hundred dollars nor
more than one thousand dollars.

4. When the certificate of authority of a prepaid dental plan corporation
is suspended, the prepaid dental plan corporation shall not, during the
period of such suspension, enroll any additional enrollees except newborn
children or other newly acquired dependent of existing enrollees and
shall not engage in any advertising or solicitation whatsoever.

5. When the certificate of authority of a prepaid dental plan corporation
is revoked, such corporation shall proceed, immediately following the
effective date of the order of revocation, to wind up its affairs and
shall conduct no further business except as may be essential to the
orderly conclusion of the affairs of such corporation. It shall engage in
no further advertising or solicitation whatsoever. (L. 1987 S.B. 272 § 12)

*Transferred 1988; formerly 379.922

The director may, after notice and hearing, promulgate such
reasonable rules and regulations as are necessary or proper to carry out
the provisions of sections 354.700 to 354.723. (L. 1987 S.B. 272 § 13)

*Transferred 1988; formerly 379.923

The provisions of sections 354.700 to 354.725 shall not apply to
any labor organization's health plan existing on September 28, 1987,
providing services on its premises established and maintained primarily
for its members and their dependents. (L. 1987 S.B. 272 § A)

*Transferred 1988; formerly 379.925

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