Assembly Bill No. 320–Committee on Judiciary

 

March 14, 2003

____________

 

Referred to Committee on Judiciary

 

SUMMARY—Makes various changes regarding malpractice. (BDR 57‑868)

 

FISCAL NOTE:    Effect on Local Government: No.

                             Effect on the State: Yes.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to malpractice; requiring insurers and defendants to attend certain settlement conferences; providing for certain defendants in malpractice actions to receive specified information and independent counsel; requiring insurers to pay certain judgments in excess of policy limits; setting forth circumstances in which an insurer is deemed to have acted in bad faith; prohibiting certain organizations from charging a fee for including the name of a provider of health care on a panel of providers of health care under certain circumstances; requiring a contract with a provider of health care to include a schedule setting forth the payments required to be made to the provider of health care pursuant to the contract under certain circumstances; prohibiting a contract with a provider of health care from including various provisions relating to amendments to the terms of the contract; requiring the development and use of a uniform form for obtaining information regarding the credentials of providers of health care for the purposes of contracts; expanding the scope of certain deceptive trade practices to include health maintenance organizations; expanding the scope of statutorily defined unfair practices to include certain actions by managed care organizations; requiring revocation of the authority of certain insuring entities for failure to timely pay approved claims; authorizing intervention in certain insurance ratemaking proceedings;

requiring the Commissioner of Insurance to disapprove a proposed increase in rates for malpractice insurance under certain circumstances; prescribing procedures for withdrawal of certain insurers from the malpractice insurance market in this state; requiring disclosure of reasons for certain underwriting decisions; limiting rates and premiums and proposed increases in rates and premiums for certain malpractice insurance; requiring certain policies of health insurance and health care plans to provide coverage for continued medical treatment by a provider of health care under certain circumstances; revising the circumstances under which the Commissioner of Insurance may suspend or revoke a certificate of authority issued to a health maintenance organization; requiring certain public organizations that provide health insurance to provide coverage for continued medical treatment by a provider of health care under certain circumstances; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1.  Chapter 679A of NRS is hereby amended by

1-2  adding thereto a new section to read as follows:

1-3  1.  If an organization establishes a panel of providers of

1-4  health care and makes the panel available for use by an insurer

1-5  when offering health care services pursuant to chapter 689A,

1-6  689B, 689C, 695A, 695B or 695C of NRS, the organization shall

1-7  not charge the insurer or a provider of health care a fee to include

1-8  the name of the provider on the panel of providers of health care.

1-9  2.  If an organization violates the provisions of subsection 1,

1-10  the organization shall pay to the insurer or provider of health

1-11  care, as appropriate, an amount that is equal to twice the fee

1-12  charged to the insurer or provider of health care.

1-13      3.  A court shall award costs and reasonable attorney’s fees to

1-14  the prevailing party in an action brought pursuant to this section.

1-15      4.  In addition to any relief granted pursuant to this section, if

1-16  an organization violates the provisions of subsection 1, and if an

1-17  insurer offering health care services pursuant to chapter 689A,

1-18  689B, 689C, 695A, 695B or 695C of NRS has a contract with or

1-19  otherwise uses the services of the organization, the Division shall

1-20  require the insurer to suspend its performance under the contract

1-21  or discontinue using those services until the organization, as

1-22  determined by the Division:

1-23      (a) Complies with the provisions of subsection 1; and

2-1  (b) Refunds to all providers of health care any fees obtained by

2-2  the organization in violation of subsection 1.

2-3  Sec. 2.  Chapter 683A of NRS is hereby amended by adding

2-4  thereto a new section to read as follows:

2-5  If an administrator, managing general agent or producer of

2-6  insurance, or a health maintenance organization when acting as

2-7  an administrator pursuant to NRS 683A.0851 or a nonprofit

2-8  corporation for hospital or medical services when acting as an

2-9  administrator pursuant to NRS 683A.0852, contracts with a

2-10  provider of health care to provide health care to an insured

2-11  pursuant to this chapter, the administrator, managing general

2-12  agent, producer of insurance, health maintenance organization or

2-13  nonprofit corporation for hospital or medical services shall

2-14  include in the contract a schedule setting forth the payments

2-15  required to be made to the provider of health care pursuant to the

2-16  contract.

2-17      Sec. 3. NRS 683A.0879 is hereby amended to read as follows:

2-18      683A.0879  1.  Except as otherwise provided in subsection 2,

2-19  an administrator shall approve or deny a claim relating to health

2-20  insurance coverage within 30 days after the administrator receives

2-21  the claim. If the claim is approved, the administrator shall pay the

2-22  claim within 30 days after it is approved. Except as otherwise

2-23  provided in this section, if the approved claim is not paid within that

2-24  period, the administrator shall pay interest on the claim at a rate of

2-25  interest equal to the prime rate at the largest bank in Nevada, as

2-26  ascertained by the Commissioner of Financial Institutions, on

2-27  January 1 or July 1, as the case may be, immediately preceding the

2-28  date on which the payment was due, plus 6 percent. The interest

2-29  must be calculated from 30 days after the date on which the claim is

2-30  approved until the date on which the claim is paid.

2-31      2.  If the administrator requires additional information to

2-32  determine whether to approve or deny the claim, he shall notify the

2-33  claimant of his request for the additional information within 20 days

2-34  after he receives the claim. The administrator shall notify the

2-35  provider of health care of all the specific reasons for the delay in

2-36  approving or denying the claim. The administrator shall approve or

2-37  deny the claim within 30 days after receiving the additional

2-38  information. If the claim is approved, the administrator shall pay the

2-39  claim within 30 days after he receives the additional information. If

2-40  the approved claim is not paid within that period, the administrator

2-41  shall pay interest on the claim in the manner prescribed in

2-42  subsection 1.

2-43      3.  An administrator shall not request a claimant to resubmit

2-44  information that the claimant has already provided to the

2-45  administrator, unless the administrator provides a legitimate reason

3-1  for the request and the purpose of the request is not to delay the

3-2  payment of the claim, harass the claimant or discourage the filing of

3-3  claims.

3-4  4.  An administrator shall not pay only part of a claim that has

3-5  been approved and is fully payable.

3-6  5.  A court shall award costs and reasonable attorney’s fees to

3-7  the prevailing party in an action brought pursuant to this section.

3-8  6.  The payment of interest provided for in this section for the

3-9  late payment of an approved claim may be waived only if the

3-10  payment was delayed because of an act of God or another cause

3-11  beyond the control of the administrator.

3-12      7. Except as otherwise provided in subsections 8 and 9:

3-13      (a) The Commissioner may require an administrator to provide

3-14  evidence which demonstrates that the administrator has substantially

3-15  complied with the requirements set forth in this section . [,

3-16  including, without limitation, payment within 30 days of at least 95

3-17  percent of approved claims or at least 90 percent of the total dollar

3-18  amount for approved claims.]

3-19      (b) If the Commissioner determines that an administrator is not

3-20  in substantial compliance with the requirements set forth in this

3-21  section, the Commissioner may require the administrator to pay an

3-22  administrative fine in an amount to be determined by the

3-23  Commissioner.

3-24      8.  The Commissioner shall require an administrator to

3-25  provide evidence which demonstrates that the administrator pays

3-26  at least:

3-27      (a) Ninety-five percent of approved claims within 30 days after

3-28  the date of approval; and

3-29      (b) Ninety percent of the total dollar amount for approved

3-30  claims within 30 days after the date of approval.

3-31      9.  If the Commissioner determines, after notice and a

3-32  hearing, that an administrator is not in complete compliance with

3-33  the requirements set forth in subsection 8, the Commissioner shall

3-34  revoke the certificate of registration of the administrator.

3-35  Notwithstanding any other provision of law, if revocation is

3-36  required pursuant to this subsection, a lesser form of penalty,

3-37  including, without limitation, a suspension or a fine, must not be

3-38  substituted in lieu of the revocation.

3-39      Sec. 4.  NRS 686A.310 is hereby amended to read as follows:

3-40      686A.310  1.  Engaging in any of the following activities is

3-41  considered to be an unfair practice:

3-42      (a) Misrepresenting to insureds or claimants pertinent facts or

3-43  insurance policy provisions relating to any coverage at issue.

4-1  (b) Failing to acknowledge and act reasonably promptly upon

4-2  communications with respect to claims arising under insurance

4-3  policies.

4-4  (c) Failing to adopt and implement reasonable standards for the

4-5  prompt investigation and processing of claims arising under

4-6  insurance policies.

4-7  (d) Failing to affirm or deny coverage of claims within a

4-8  reasonable time after proof of loss requirements have been

4-9  completed and submitted by the insured.

4-10      (e) Failing to effectuate prompt, fair and equitable settlements of

4-11  claims in which liability of the insurer has become reasonably clear.

4-12      (f) Compelling insureds to institute litigation to recover amounts

4-13  due under an insurance policy by offering substantially less than the

4-14  amounts ultimately recovered in actions brought by such insureds,

4-15  when the insureds have made claims for amounts reasonably similar

4-16  to the amounts ultimately recovered.

4-17      (g) Attempting to settle a claim by an insured for less than the

4-18  amount to which a reasonable person would have believed he was

4-19  entitled by reference to written or printed advertising material

4-20  accompanying or made part of an application.

4-21      (h) Attempting to settle claims on the basis of an application

4-22  which was altered without notice to, or knowledge or consent of, the

4-23  insured, his representative, agent or broker.

4-24      (i) Failing, upon payment of a claim, to inform insureds or

4-25  beneficiaries of the coverage under which payment is made.

4-26      (j) Making known to insureds or claimants a practice of the

4-27  insurer of appealing from arbitration awards in favor of insureds or

4-28  claimants for the purpose of compelling them to accept settlements

4-29  or compromises less than the amount awarded in arbitration.

4-30      (k) Delaying the investigation or payment of claims by requiring

4-31  an insured or a claimant, or the physician of either, to submit a

4-32  preliminary claim report, and then requiring the subsequent

4-33  submission of formal proof of loss forms, both of which

4-34  submissions contain substantially the same information.

4-35      (l) Failing to settle claims promptly, where liability has become

4-36  reasonably clear, under one portion of the insurance policy coverage

4-37  in order to influence settlements under other portions of the

4-38  insurance policy coverage.

4-39      (m) Failing to comply with the provisions of NRS 687B.310 to

4-40  687B.390, inclusive, or 687B.410.

4-41      (n) Failing to provide promptly to an insured a reasonable

4-42  explanation of the basis in the insurance policy, with respect to the

4-43  facts of the insured’s claim and the applicable law, for the denial of

4-44  his claim or for an offer to settle or compromise his claim.

4-45      (o) Advising an insured or claimant not to seek legal counsel.

5-1  (p) Misleading an insured or claimant concerning any applicable

5-2  statute of limitations.

5-3  (q) Failing to comply with the provisions of chapter 695G of

5-4  NRS.

5-5  2.  In addition to any rights or remedies available to the

5-6  Commissioner, an insurer is liable to its insured for any damages

5-7  sustained by the insured as a result of the commission of any act set

5-8  forth in subsection 1 as an unfair practice.

5-9  Sec. 5.  Chapter 686B of NRS is hereby amended by adding

5-10  thereto a new section to read as follows:

5-11      If a filing made with the Commissioner pursuant to subsection

5-12  1 of NRS 686B.070 pertains to insurance covering the liability of a

5-13  practitioner licensed pursuant to chapter 630, 631, 632 or 633 of

5-14  NRS for a breach of his professional duty toward a patient, any

5-15  interested person or entity may intervene as a matter of right in

5-16  any hearing or other proceeding conducted to determine whether

5-17  the applicable rate or proposed increase thereto:

5-18      1.  Complies with the standards set forth in NRS 686B.050.

5-19      2.  Should be approved or disapproved.

5-20      Sec. 6.  NRS 686B.020 is hereby amended to read as follows:

5-21      686B.020  As used in NRS 686B.010 to 686B.1799, inclusive,

5-22  and section 5 of this act, unless the context otherwise requires:

5-23      1.  “Advisory organization,” except as limited by NRS

5-24  686B.1752, means any person or organization which is controlled

5-25  by or composed of two or more insurers and which engages in

5-26  activities related to rate making. For the purposes of this subsection,

5-27  two or more insurers with common ownership or operating in this

5-28  state under common ownership constitute a single insurer. An

5-29  advisory organization does not include:

5-30      (a) A joint underwriting association;

5-31      (b) An actuarial or legal consultant; or

5-32      (c) An employee or manager of an insurer.

5-33      2.  “Market segment” means any line or kind of insurance or, if

5-34  it is described in general terms, any subdivision thereof or any class

5-35  of risks or combination of classes.

5-36      3.  “Rate service organization” means any person, other than an

5-37  employee of an insurer, who assists insurers in rate making or filing

5-38  by:

5-39      (a) Collecting, compiling and furnishing loss or expense

5-40  statistics;

5-41      (b) Recommending, making or filing rates or supplementary rate

5-42  information; or

5-43      (c) Advising about rate questions, except as an attorney giving

5-44  legal advice.

6-1  4.  “Supplementary rate information” includes any manual or

6-2  plan of rates, statistical plan, classification, rating schedule,

6-3  minimum premium, policy fee, rating rule, rule of underwriting

6-4  relating to rates and any other information prescribed by regulation

6-5  of the Commissioner.

6-6  Sec. 7.  NRS 686B.040 is hereby amended to read as follows:

6-7  686B.040  [The]

6-8  1.  Except as otherwise provided in subsection 2, the

6-9  Commissioner may by rule exempt any person or class of persons or

6-10  any market segment from any or all of the provisions of NRS

6-11  686B.010 to 686B.1799, inclusive, and section 5 of this act, if and

6-12  to the extent that he finds their application unnecessary to achieve

6-13  the purposes of those sections.

6-14      2.  The Commissioner may not, by rule or otherwise, exempt

6-15  an insurer from the provisions of NRS 686B.010 to 686B.1799,

6-16  inclusive, and section 5 of this act, with regard to insurance

6-17  covering the liability of a practitioner licensed pursuant to chapter

6-18  630, 631, 632 or 633 of NRS for a breach of his professional duty

6-19  toward a patient.

6-20      Sec. 8.  NRS 686B.110 is hereby amended to read as follows:

6-21      686B.110  1.  The Commissioner shall consider each proposed

6-22  increase or decrease in the rate of any kind or line of insurance or

6-23  subdivision thereof that is filed with [him] the Commissioner

6-24  pursuant to NRS 686B.070. [If]

6-25      2.  The Commissioner shall disapprove the proposal if the

6-26  Commissioner finds that [a proposed increase] the proposal will

6-27  result in a rate which is not in compliance with NRS 686B.050 . [,

6-28  he shall disapprove the proposal.]

6-29      3.  In addition to the grounds for disapproval set forth in

6-30  subsection 2, if the proposal will increase the rate of insurance

6-31  covering the liability of a practitioner licensed pursuant to chapter

6-32  630, 631, 632 or 633 of NRS for a breach of his professional duty

6-33  toward a patient, the Commissioner shall disapprove the proposal,

6-34  or any constituent part thereof, if the Commissioner finds that the

6-35  proposal, or the constituent part thereof, has been proposed or is

6-36  necessitated because:

6-37      (a) The insurer has experienced or is reasonably likely to

6-38  experience capital losses, or diminished dividends, returns or

6-39  income or any other financial loss as a result of the imprudent

6-40  investment of money;

6-41      (b) The insurer or any director, partner, officer, employee,

6-42  agent or contractor of the insurer has engaged in:

6-43          (1) Any fraudulent accounting practice;

6-44          (2) Any form of corporate fraud or securities fraud; or

7-1       (3) Any willful misconduct or wrongdoing that violates the

7-2  laws or regulations of the United States, this state or any other

7-3  state;

7-4  (c) The insurer has experienced or is reasonably likely to

7-5  experience losses or expenses as a result of the insurer or any

7-6  director, partner, officer, employee, agent or contractor of the

7-7  insurer having engaged in litigation unreasonably or vexatiously

7-8  after one or more opposing parties have made a reasonable offer

7-9  of settlement; or

7-10      (d) The insurer has experienced losses or expenses as a result

7-11  of the insurer providing insurance to a practitioner licensed

7-12  pursuant to chapter 630, 631, 632 or 633 of NRS for whom the

7-13  insurer has paid not less than:

7-14          (1) Ten judgments or settlements with regard to claims for

7-15  breach of the practitioner’s professional duty toward a patient;

7-16  and

7-17          (2) A total of $5,000,000 with regard to the judgments and

7-18  settlements identified in subparagraph (1).

7-19      4.  The Commissioner shall approve or disapprove each

7-20  proposal no later than 60 days after it is determined by him to be

7-21  complete pursuant to subsection [4.] 7. If the Commissioner fails to

7-22  approve or disapprove the proposal within that period, the proposal

7-23  shall be deemed approved.

7-24      [2.] 5.  Whenever an insurer has no legally effective rates as a

7-25  result of the Commissioner’s disapproval of rates or other act, the

7-26  Commissioner shall , on request , specify interim rates for the

7-27  insurer that are high enough to protect the interests of all parties and

7-28  may order that a specified portion of the premiums be placed in an

7-29  escrow account approved by him. When new rates become legally

7-30  effective, the Commissioner shall order the escrowed funds or any

7-31  overcharge in the interim rates to be distributed appropriately,

7-32  except that refunds to policyholders that are de minimis must not be

7-33  required.

7-34      [3.] 6.  If the Commissioner disapproves a proposed rate and an

7-35  insurer requests a hearing to determine the validity of his action, the

7-36  insurer has the burden of showing compliance with the applicable

7-37  standards for rates established in NRS 686B.010 to 686B.1799,

7-38  inclusive[.] , and section 5 of this act. Any such hearing must be

7-39  held:

7-40      (a) Within 30 days after the request for a hearing has been

7-41  submitted to the Commissioner; or

7-42      (b) Within a period agreed upon by the insurer and the

7-43  Commissioner.

7-44  If the hearing is not held within the period specified in paragraph (a)

7-45  or (b), or if the Commissioner fails to issue an order concerning the

8-1  proposed rate for which the hearing is held within 45 days after the

8-2  hearing, the proposed rate shall be deemed approved.

8-3  [4.] 7.  The Commissioner shall [by regulation] specify the

8-4  documents or any other information which must be included in a

8-5  proposal to increase or decrease a rate submitted to him pursuant to

8-6  [subsection 1.] this section. Each such proposal shall be deemed

8-7  complete upon its filing with the Commissioner, unless the

8-8  Commissioner, within 15 business days after the proposal is filed

8-9  with him, determines that the proposal is incomplete because the

8-10  proposal does not comply with the regulations adopted by him

8-11  pursuant to this [subsection.] section.

8-12      8.  The Commissioner shall adopt such regulations as are

8-13  necessary to carry out the provisions of this section, including,

8-14  without limitation, regulations which define words and terms used

8-15  in this section.

8-16      Sec. 9.  Chapter 689A of NRS is hereby amended by adding

8-17  thereto a new section to read as follows:

8-18      1.  The provisions of this section apply to a policy of health

8-19  insurance offered or issued by an insurer if an insured covered by

8-20  the policy receives health care through a defined set of providers

8-21  of health care who are under contract with the insurer.

8-22      2.  Except as otherwise provided in this section, if an insured

8-23  who is covered by a policy described in subsection 1 is receiving

8-24  medical treatment for a medical condition from a provider of

8-25  health care whose contract with the insurer is terminated during

8-26  the course of the medical treatment, the policy must provide that:

8-27      (a) The insured may continue to obtain medical treatment for

8-28  the medical condition from the provider of health care pursuant to

8-29  this section; and

8-30      (b) The provider of health care is entitled to receive

8-31  reimbursement from the insurer for the medical treatment he

8-32  provides to the insured pursuant to this section at the same rate

8-33  and under the same conditions as before the contract was

8-34  terminated.

8-35      3.  The coverage required by subsection 2 must be provided

8-36  until the later of:

8-37      (a) The 180th day after the date the contract is terminated; or

8-38      (b) If the medical condition is pregnancy, the 45th day after:

8-39          (1) The date of delivery; or

8-40          (2) If the pregnancy does not end in delivery, the date of the

8-41  end of the pregnancy.

8-42      4.  The requirements of this section do not apply to a provider

8-43  of health care if:

9-1  (a) The provider of health care was under contract with the

9-2  insurer and the insurer terminated that contract because of the

9-3  incompetence or misconduct of the provider of health care; and

9-4  (b) The insurer did not enter into another contract with the

9-5  provider of health care after the contract was terminated pursuant

9-6  to paragraph (a).

9-7  5.  A policy subject to the provisions of this chapter that is

9-8  delivered, issued for delivery or renewed on or after October 1,

9-9  2003, has the legal effect of including the coverage required by

9-10  this section, and any provision of the policy or renewal thereof

9-11  that is in conflict with this section is void.

9-12      6.  The Commissioner shall adopt regulations to carry out the

9-13  provisions of this section.

9-14      Sec. 10.  NRS 689A.035 is hereby amended to read as follows:

9-15      689A.035  1.  An insurer shall not charge a provider of health

9-16  care a fee to include the name of the provider on a list of providers

9-17  of health care given by the insurer to its insureds.

9-18      2.  An insurer shall not contract with a provider of health care

9-19  to provide health care to an insured unless:

9-20      (a) The insurer uses the form prescribed by the Commissioner

9-21  to obtain any information related to the credentials of the provider

9-22  of health care;

9-23      (b) The insurer includes in the contract a schedule setting

9-24  forth the payments required to be made to the provider of health

9-25  care pursuant to the contract; and

9-26      (c) The contract complies with the provisions of this section.

9-27      3.  The contract must not contain any provision that

9-28  authorizes an insurer to amend the material terms of the contract

9-29  or any manual, policy or procedure document which is

9-30  incorporated in or referenced by the contract unless:

9-31      (a) The provider of health care agrees to the amendment; or

9-32      (b) The amendment is necessary to comply with state or federal

9-33  law or the accreditation requirements of a private accreditation

9-34  organization. If an amendment is necessary pursuant to this

9-35  paragraph, the provider of health care may terminate the contract.

9-36      4.  The contract must not contain any provision that requires

9-37  the provider of health care to comply with quality improvement or

9-38  utilization management programs or procedures unless the

9-39  requirement is:

9-40      (a) Fully disclosed to the provider of health care not later than

9-41  15 business days before the date the contract is executed; or

9-42      (b) Necessary to comply with accreditation requirements of

9-43  state or federal law or a private accreditation organization. If an

9-44  amendment is necessary pursuant to this paragraph, the provider

9-45  of health care may terminate the contract.

10-1      5.  The contract must not contain any provision that requires

10-2  or permits access to information relating to an insured in violation

10-3  of state or federal law concerning the confidentiality of such

10-4  information.

10-5      6.  The contract must not contain any provision that waives or

10-6  conflicts with any provision of this section.

10-7      7.  A contract that contains any provision in violation of this

10-8  section is void.

10-9      8.  The Commissioner shall develop the form required by

10-10  subsection 2.

10-11     Sec. 11.  NRS 689A.330 is hereby amended to read as follows:

10-12     689A.330  If any policy is issued by a domestic insurer for

10-13  delivery to a person residing in another state, and if the insurance

10-14  commissioner or corresponding public officer of that other state has

10-15  informed the Commissioner that the policy is not subject to approval

10-16  or disapproval by that officer, the Commissioner may by ruling

10-17  require that the policy meet the standards set forth in NRS 689A.030

10-18  to 689A.320, inclusive[.] , and section 9 of this act.

10-19     Sec. 12.  NRS 689A.410 is hereby amended to read as follows:

10-20     689A.410  1.  Except as otherwise provided in subsection 2,

10-21  an insurer shall approve or deny a claim relating to a policy of

10-22  health insurance within 30 days after the insurer receives the claim.

10-23  If the claim is approved, the insurer shall pay the claim within 30

10-24  days after it is approved. Except as otherwise provided in this

10-25  section, if the approved claim is not paid within that period, the

10-26  insurer shall pay interest on the claim at a rate of interest equal to

10-27  the prime rate at the largest bank in Nevada, as ascertained by the

10-28  Commissioner of Financial Institutions, on January 1 or July 1, as

10-29  the case may be, immediately preceding the date on which the

10-30  payment was due, plus 6 percent. The interest must be calculated

10-31  from 30 days after the date on which the claim is approved until the

10-32  date on which the claim is paid.

10-33     2.  If the insurer requires additional information to determine

10-34  whether to approve or deny the claim, it shall notify the claimant of

10-35  its request for the additional information within 20 days after it

10-36  receives the claim. The insurer shall notify the provider of health

10-37  care of all the specific reasons for the delay in approving or denying

10-38  the claim. The insurer shall approve or deny the claim within 30

10-39  days after receiving the additional information. If the claim is

10-40  approved, the insurer shall pay the claim within 30 days after it

10-41  receives the additional information. If the approved claim is not paid

10-42  within that period, the insurer shall pay interest on the claim in the

10-43  manner prescribed in subsection 1.

10-44     3.  An insurer shall not request a claimant to resubmit

10-45  information that the claimant has already provided to the insurer,

11-1  unless the insurer provides a legitimate reason for the request and

11-2  the purpose of the request is not to delay the payment of the claim,

11-3  harass the claimant or discourage the filing of claims.

11-4      4.  An insurer shall not pay only part of a claim that has been

11-5  approved and is fully payable.

11-6      5.  A court shall award costs and reasonable attorney’s fees to

11-7  the prevailing party in an action brought pursuant to this section.

11-8      6.  The payment of interest provided for in this section for the

11-9  late payment of an approved claim may be waived only if the

11-10  payment was delayed because of an act of God or another cause

11-11  beyond the control of the insurer.

11-12     7.  Except as otherwise provided in subsections 8 and 9:

11-13     (a) The Commissioner may require an insurer to provide

11-14  evidence which demonstrates that the insurer has substantially

11-15  complied with the requirements set forth in this section . [,

11-16  including, without limitation, payment within 30 days of at least 95

11-17  percent of approved claims or at least 90 percent of the total dollar

11-18  amount for approved claims.]

11-19     (b) If the Commissioner determines that an insurer is not in

11-20  substantial compliance with the requirements set forth in this

11-21  section, the Commissioner may require the insurer to pay an

11-22  administrative fine in an amount to be determined by the

11-23  Commissioner.

11-24     8.  The Commissioner shall require an insurer to provide

11-25  evidence which demonstrates that the insurer pays at least:

11-26     (a) Ninety-five percent of approved claims within 30 days after

11-27  the date of approval; and

11-28     (b) Ninety percent of the total dollar amount for approved

11-29  claims within 30 days after the date of approval.

11-30     9.  If the Commissioner determines, after notice and a

11-31  hearing, that an insurer is not in complete compliance with the

11-32  requirements set forth in subsection 8, the Commissioner shall

11-33  revoke the certificate of authority of the insurer. Notwithstanding

11-34  any other provision of law, if revocation is required pursuant to

11-35  this subsection, a lesser form of penalty, including, without

11-36  limitation, a suspension or a fine, must not be substituted in lieu of

11-37  the revocation.

11-38     Sec. 13.  Chapter 689B of NRS is hereby amended by adding

11-39  thereto a new section to read as follows:

11-40     1.  The provisions of this section apply to a policy of group

11-41  health insurance offered or issued by an insurer if an insured

11-42  covered by the policy receives health care through a defined set of

11-43  providers of health care who are under contract with the insurer.

11-44     2.  Except as otherwise provided in this section, if an insured

11-45  who is covered by a policy described in subsection 1 is receiving

12-1  medical treatment for a medical condition from a provider of

12-2  health care whose contract with the insurer is terminated during

12-3  the course of the medical treatment, the policy must provide that:

12-4      (a) The insured may continue to obtain medical treatment for

12-5  the medical condition from the provider of health care pursuant to

12-6  this section; and

12-7      (b) The provider of health care is entitled to receive

12-8  reimbursement from the insurer for the medical treatment he

12-9  provides to the insured pursuant to this section at the same rate

12-10  and under the same conditions as before the contract was

12-11  terminated.

12-12     3.  The coverage required by subsection 2 must be provided

12-13  until the later of:

12-14     (a) The 180th day after the date the contract is terminated; or

12-15     (b) If the medical condition is pregnancy, the 45th day after:

12-16         (1) The date of delivery; or

12-17         (2) If the pregnancy does not end in delivery, the date of the

12-18  end of the pregnancy.

12-19     4.  The requirements of this section do not apply to a provider

12-20  of health care if:

12-21     (a) The provider of health care was under contract with the

12-22  insurer and the insurer terminated that contract because of the

12-23  incompetence or misconduct of the provider of health care; and

12-24     (b) The insurer did not enter into another contract with the

12-25  provider of health care after the contract was terminated pursuant

12-26  to paragraph (a).

12-27     5.  A policy subject to the provisions of this chapter that is

12-28  delivered, issued for delivery or renewed on or after October 1,

12-29  2003, has the legal effect of including the coverage required by

12-30  this section, and any provision of the policy or renewal thereof

12-31  that is in conflict with this section is void.

12-32     6.  The Commissioner shall adopt regulations to carry out the

12-33  provisions of this section.

12-34     Sec. 14.  NRS 689B.015 is hereby amended to read as follows:

12-35     689B.015  1.  An insurer that issues a policy of group health

12-36  insurance shall not charge a provider of health care a fee to include

12-37  the name of the provider on a list of providers of health care given

12-38  by the insurer to its insureds.

12-39     2.  An insurer specified in subsection 1 shall not contract with

12-40  a provider of health care to provide health care to an insured

12-41  unless:

12-42     (a) The insurer uses the form prescribed by the Commissioner

12-43  to obtain any information related to the credentials of the provider

12-44  of health care;

13-1      (b) The insurer includes in the contract a schedule setting

13-2  forth the payments required to be made to the provider of health

13-3  care pursuant to the contract; and

13-4      (c) The contract complies with the provisions of this section.

13-5      3.  The contract must not contain any provision that

13-6  authorizes an insurer to amend the material terms of the contract

13-7  or any manual, policy or procedure document which is

13-8  incorporated in or referenced by the contract unless:

13-9      (a) The provider of health care agrees to the amendment; or

13-10     (b) The amendment is necessary to comply with state or federal

13-11  law or the accreditation requirements of a private accreditation

13-12  organization. If an amendment is necessary pursuant to this

13-13  paragraph, the provider of health care may terminate the contract.

13-14     4.  The contract must not contain any provision that requires

13-15  the provider of health care to comply with quality improvement or

13-16  utilization management programs or procedures unless the

13-17  requirement is:

13-18     (a) Fully disclosed to the provider of health care not later than

13-19  15 business days before the date the contract is executed; or

13-20     (b) Necessary to comply with accreditation requirements of

13-21  state or federal law or a private accreditation organization. If an

13-22  amendment is necessary pursuant to this paragraph, the provider

13-23  of health care may terminate the contract.

13-24     5.  The contract must not contain any provision that requires

13-25  or permits access to information relating to an insured in violation

13-26  of state or federal law concerning the confidentiality of such

13-27  information.

13-28     6.  The contract must not contain any provision that waives or

13-29  conflicts with any provision of this section.

13-30     7.  A contract that contains any provision in violation of this

13-31  section is void.

13-32     8.  The Commissioner shall develop the form required by

13-33  subsection 2.

13-34     Sec. 15.  NRS 689B.255 is hereby amended to read as follows:

13-35     689B.255  1.  Except as otherwise provided in subsection 2, an

13-36  insurer shall approve or deny a claim relating to a policy of group

13-37  health insurance or blanket insurance within 30 days after the

13-38  insurer receives the claim. If the claim is approved, the insurer shall

13-39  pay the claim within 30 days after it is approved. Except as

13-40  otherwise provided in this section, if the approved claim is not paid

13-41  within that period, the insurer shall pay interest on the claim at a rate

13-42  of interest equal to the prime rate at the largest bank in Nevada, as

13-43  ascertained by the Commissioner of Financial Institutions, on

13-44  January 1 or July 1, as the case may be, immediately preceding the

13-45  date on which the payment was due, plus 6 percent. The interest

14-1  must be calculated from 30 days after the date on which the claim is

14-2  approved until the date on which the claim is paid.

14-3      2.  If the insurer requires additional information to determine

14-4  whether to approve or deny the claim, it shall notify the claimant of

14-5  its request for the additional information within 20 days after it

14-6  receives the claim. The insurer shall notify the provider of health

14-7  care of all the specific reasons for the delay in approving or denying

14-8  the claim. The insurer shall approve or deny the claim within 30

14-9  days after receiving the additional information. If the claim is

14-10  approved, the insurer shall pay the claim within 30 days after it

14-11  receives the additional information. If the approved claim is not paid

14-12  within that period, the insurer shall pay interest on the claim in the

14-13  manner prescribed in subsection 1.

14-14     3.  An insurer shall not request a claimant to resubmit

14-15  information that the claimant has already provided to the insurer,

14-16  unless the insurer provides a legitimate reason for the request and

14-17  the purpose of the request is not to delay the payment of the claim,

14-18  harass the claimant or discourage the filing of claims.

14-19     4.  An insurer shall not pay only part of a claim that has been

14-20  approved and is fully payable.

14-21     5.  A court shall award costs and reasonable attorney’s fees to

14-22  the prevailing party in an action brought pursuant to this section.

14-23     6.  The payment of interest provided for in this section for the

14-24  late payment of an approved claim may be waived only if the

14-25  payment was delayed because of an act of God or another cause

14-26  beyond the control of the insurer.

14-27     7.  Except as otherwise provided in subsections 8 and 9:

14-28     (a) The Commissioner may require an insurer to provide

14-29  evidence which demonstrates that the insurer has substantially

14-30  complied with the requirements set forth in this section . [,

14-31  including, without limitation, payment within 30 days of at least 95

14-32  percent of approved claims or at least 90 percent of the total dollar

14-33  amount for approved claims.]

14-34     (b) If the Commissioner determines that an insurer is not in

14-35  substantial compliance with the requirements set forth in this

14-36  section, the Commissioner may require the insurer to pay an

14-37  administrative fine in an amount to be determined by the

14-38  Commissioner.

14-39     8.  The Commissioner shall require an insurer to provide

14-40  evidence which demonstrates that the insurer pays at least:

14-41     (a) Ninety-five percent of approved claims within 30 days after

14-42  the date of approval; and

14-43     (b) Ninety percent of the total dollar amount for approved

14-44  claims within 30 days after the date of approval.

15-1      9.  If the Commissioner determines, after notice and a

15-2  hearing, that an insurer is not in complete compliance with the

15-3  requirements set forth in subsection 8, the Commissioner shall

15-4  revoke the certificate of authority of the insurer. Notwithstanding

15-5  any other provision of law, if revocation is required pursuant to

15-6  this subsection, a lesser form of penalty, including, without

15-7  limitation, a suspension or a fine, must not be substituted in lieu of

15-8  the revocation.

15-9      Sec. 16.  NRS 689C.435 is hereby amended to read as follows:

15-10     689C.435  1.  A carrier serving small employers and a carrier

15-11  that offers a contract to a voluntary purchasing group shall not

15-12  charge a provider of health care a fee to include the name of the

15-13  provider on a list of providers of health care given by the carrier to

15-14  its insureds.

15-15     2.  A carrier specified in subsection 1 shall not contract with a

15-16  provider of health care to provide health care to an insured

15-17  unless:

15-18     (a) The carrier uses the form prescribed by the Commissioner

15-19  to obtain any information related to the credentials of the provider

15-20  of health care;

15-21     (b) The carrier includes in the contract a schedule setting forth

15-22  the payments required to be made to the provider of health care

15-23  pursuant to the contract; and

15-24     (c) The contract complies with the provisions of this section.

15-25     3.  The contract must not contain any provision that

15-26  authorizes a carrier to amend the material terms of the contract or

15-27  any manual, policy or procedure document which is incorporated

15-28  in or referenced by the contract unless:

15-29     (a) The provider of health care agrees to the amendment; or

15-30     (b) The amendment is necessary to comply with state or federal

15-31  law or the accreditation requirements of a private accreditation

15-32  organization. If an amendment is necessary pursuant to this

15-33  paragraph, the provider of health care may terminate the contract.

15-34     4.  The contract must not contain any provision that requires

15-35  the provider of health care to comply with quality improvement or

15-36  utilization management programs or procedures unless the

15-37  requirement is:

15-38     (a) Fully disclosed to the provider of health care not later than

15-39  15 business days before the date the contract is executed; or

15-40     (b) Necessary to comply with accreditation requirements of

15-41  state or federal law or a private accreditation organization. If an

15-42  amendment is necessary pursuant to this paragraph, the provider

15-43  of health care may terminate the contract.

15-44     5.  The contract must not contain any provision that requires

15-45  or permits access to information relating to an insured in violation

16-1  of state or federal law concerning the confidentiality of such

16-2  information.

16-3      6.  The contract must not contain any provision that waives or

16-4  conflicts with any provision of this section.

16-5      7.  A contract that contains any provision in violation of this

16-6  section is void.

16-7      8.  The Commissioner shall develop the form required by

16-8  subsection 2.

16-9      Sec. 17.  NRS 689C.485 is hereby amended to read as follows:

16-10     689C.485  1.  Except as otherwise provided in subsection 2, a

16-11  carrier serving small employers and a carrier that offers a contract to

16-12  a voluntary purchasing group shall approve or deny a claim relating

16-13  to a policy of health insurance within 30 days after the carrier

16-14  receives the claim. If the claim is approved, the carrier shall pay the

16-15  claim within 30 days after it is approved. Except as otherwise

16-16  provided in this section, if the approved claim is not paid within that

16-17  period, the carrier shall pay interest on the claim at a rate of interest

16-18  equal to the prime rate at the largest bank in Nevada, as ascertained

16-19  by the Commissioner of Financial Institutions, on January 1 or July

16-20  1, as the case may be, immediately preceding the date on which the

16-21  payment was due, plus 6 percent. The interest must be calculated

16-22  from 30 days after the date on which the claim is approved until the

16-23  date on which the claim is paid.

16-24     2.  If the carrier requires additional information to determine

16-25  whether to approve or deny the claim, it shall notify the claimant of

16-26  its request for the additional information within 20 days after it

16-27  receives the claim. The carrier shall notify the provider of health

16-28  care of all the specific reasons for the delay in approving or denying

16-29  the claim. The carrier shall approve or deny the claim within 30

16-30  days after receiving the additional information. If the claim is

16-31  approved, the carrier shall pay the claim within 30 days after it

16-32  receives the additional information. If the approved claim is not paid

16-33  within that period, the carrier shall pay interest on the claim in the

16-34  manner prescribed in subsection 1.

16-35     3.  A carrier shall not request a claimant to resubmit

16-36  information that the claimant has already provided to the carrier,

16-37  unless the carrier provides a legitimate reason for the request and the

16-38  purpose of the request is not to delay the payment of the claim,

16-39  harass the claimant or discourage the filing of claims.

16-40     4.  A carrier shall not pay only part of a claim that has been

16-41  approved and is fully payable.

16-42     5.  A court shall award costs and reasonable attorney’s fees to

16-43  the prevailing party in an action brought pursuant to this section.

16-44     6.  The payment of interest provided for in this section for the

16-45  late payment of an approved claim may be waived only if the

17-1  payment was delayed because of an act of God or another cause

17-2  beyond the control of the carrier.

17-3      7.  Except as otherwise provided in subsections 8 and 9:

17-4      (a) The Commissioner may require a carrier to provide evidence

17-5  which demonstrates that the carrier has substantially complied with

17-6  the requirements set forth in this section . [, including, without

17-7  limitation, payment within 30 days of at least 95 percent of

17-8  approved claims or at least 90 percent of the total dollar amount for

17-9  approved claims.]

17-10     (b) If the Commissioner determines that a carrier is not in

17-11  substantial compliance with the requirements set forth in this

17-12  section, the Commissioner may require the carrier to pay an

17-13  administrative fine in an amount to be determined by the

17-14  Commissioner.

17-15     8.  The Commissioner shall require a carrier to provide

17-16  evidence which demonstrates that the carrier pays at least:

17-17     (a) Ninety-five percent of approved claims within 30 days after

17-18  the date of approval; and

17-19     (b) Ninety percent of the total dollar amount for approved

17-20  claims within 30 days after the date of approval.

17-21     9.  If the Commissioner determines, after notice and a

17-22  hearing, that a carrier is not in complete compliance with the

17-23  requirements set forth in subsection 8, the Commissioner shall

17-24  revoke the certificate of authority of the carrier. Notwithstanding

17-25  any other provision of law, if revocation is required pursuant to

17-26  this subsection, a lesser form of penalty, including, without

17-27  limitation, a suspension or a fine, must not be substituted in lieu of

17-28  the revocation.

17-29     Sec. 18.  Chapter 690B of NRS is hereby amended by adding

17-30  thereto the provisions set forth as sections 19 to 22, inclusive, of this

17-31  act.

17-32     Sec. 19.  An insurer shall not cancel, refuse to renew or

17-33  increase the premium for renewal of a policy of insurance

17-34  covering the liability of a practitioner licensed pursuant to chapter

17-35  630, 631, 632 or 633 of NRS for a breach of his professional duty

17-36  toward a patient as a result of a claim against the practitioner

17-37  pursuant to the policy if the insurer:

17-38     1.  Makes a payment with respect to the claim in an amount

17-39  that exceeds the limit of the coverage under the policy;

17-40     2.  Had the opportunity to settle the claim for an amount

17-41  equal to or less than the limit of the coverage under the policy:

17-42  and

17-43     3.  Did not settle the claim for an amount equal to or less than

17-44  the limit of the coverage under the policy.

18-1      Sec. 20.  If an insurer declines to issue to a practitioner

18-2  licensed pursuant to chapter 630, 631, 632 or 633 of NRS a policy

18-3  of insurance covering the liability of the practitioner for a breach

18-4  of his professional duty toward a patient, the insurer shall, upon

18-5  the request of the practitioner, disclose to the practitioner the

18-6  reasons the insurer declined to issue the policy.

18-7      Sec. 21.  1.  If an insurer, for a policy of insurance covering

18-8  the liability of a practitioner licensed pursuant to chapter 630, 631,

18-9  632 or 633 of NRS for a breach of his professional duty toward a

18-10  patient, sets the premium for the policy for the practitioner at a

18-11  rate that is higher than the applicable average rate determined

18-12  pursuant to subsection 2, the insurer shall, upon the request of the

18-13  practitioner, disclose to the practitioner the reasons the insurer set

18-14  the premium for the policy at a rate that is higher than the

18-15  applicable average rate determined pursuant to subsection 2.

18-16     2.  For the purposes of this section, the Commissioner shall

18-17  determine an average rate for the premium for a policy of

18-18  insurance covering the liability of a practitioner licensed pursuant

18-19  to chapter 630, 631, 632 or 633 of NRS for a breach of his

18-20  professional duty toward a patient. The Commissioner may

18-21  determine different average rates applicable to different:

18-22     (a) Types of policies, including, without limitation, policies of

18-23  claims-made insurance and policies of occurrence-based

18-24  insurance;

18-25     (b) Types and specialties of practitioners; and

18-26     (c) Geographic areas of this state within which a practitioner

18-27  may practice.

18-28     3.  The Commissioner shall review and update the average

18-29  rates determined pursuant to subsection 2 not less than once every

18-30  2 years.

18-31     Sec. 22.  1.  The Commissioner shall, on or before April 1 of

18-32  each year:

18-33     (a) Specify for the purposes of this section, by regulation,

18-34  categories of practitioners licensed pursuant to chapter 630, 631,

18-35  632 or 633 of NRS;

18-36     (b) Determine for each category of practitioner specified

18-37  pursuant to paragraph (a), using data applicable to the previous

18-38  calendar year, the relative market share in this state among

18-39  insurers with respect to policies of insurance issued to cover the

18-40  liability of the practitioners within the category for breach of

18-41  professional duty toward a patient; and

18-42     (c) Provide notice of the applicability of this section to each

18-43  insurer whom the Commissioner determines, pursuant to

18-44  paragraph (b), possesses more than 40 percent of the market in

18-45  this state within a category of practitioner.

19-1      2.  A determination by the Commissioner pursuant to

19-2  subsection 1 that an insurer possesses more than 40 percent of the

19-3  market in this state within a category of practitioner is valid for

19-4  the period beginning on April 1 of the year in which the

19-5  determination is made and ending on March 31 of the following

19-6  year, without regard to any actual change in market share during

19-7  that period.

19-8      3.  During any period specified in subsection 2 for which an

19-9  insurer is determined by the Commissioner pursuant to subsection

19-10  1 to possess more than 40 percent of the market in this state within

19-11  a category of practitioner, the insurer shall, before withdrawing

19-12  from that market, comply with the provisions of subsections 4 and

19-13  5.

19-14     4.  An insurer described in subsection 3 shall, at least 120

19-15  days before withdrawing:

19-16     (a) Give written notice of its intent to withdraw to the

19-17  Commissioner and to each practitioner within the applicable

19-18  category whom the insurer insures against liability for a breach of

19-19  his professional duty toward a patient; and

19-20     (b) Submit to the Commissioner a written plan providing for

19-21  the insurer’s orderly withdrawal from the market so as to

19-22  minimize the effect of the withdrawal on the public generally and

19-23  on the practitioners within the applicable category whom the

19-24  insurer insures against liability for a breach of professional duty

19-25  toward a patient.

19-26     5.  After complying with the requirements set forth in

19-27  subsection 4, an insurer described in subsection 3:

19-28     (a) Shall not take any action toward withdrawal until the

19-29  Commissioner determines that the written plan required pursuant

19-30  to paragraph (b) of subsection 4 complies with the regulations

19-31  adopted pursuant to paragraph (a) of subsection 7.

19-32     (b) Shall ensure that any action it takes toward withdrawal is

19-33  in compliance with the written plan required pursuant to

19-34  paragraph (b) of subsection 4.

19-35     6.  The Commissioner has the final authority to determine

19-36  whether a particular action taken by an insurer is in compliance

19-37  with the written plan required pursuant to paragraph (b) of

19-38  subsection 4.

19-39     7.  The Commissioner shall adopt regulations:

19-40     (a) Prescribing the form, content and method of submission of

19-41  a written plan required pursuant to paragraph (b) of subsection 4.

19-42     (b) Providing a procedure for determining, pursuant to

19-43  subsection 1, the relative market share in this state among

19-44  insurers with respect to policies of insurance issued to cover the

19-45  liability of a practitioner licensed pursuant to chapter 630, 631,

20-1  632 or 633 of NRS for a breach of his professional duty toward a

20-2  patient.

20-3      Sec. 23.  NRS 695A.095 is hereby amended to read as follows:

20-4      695A.095  1.  A society shall not charge a provider of health

20-5  care a fee to include the name of the provider on a list of providers

20-6  of health care given by the society to its insureds.

20-7      2.  A society shall not contract with a provider of health care

20-8  to provide health care to an insured unless:

20-9      (a) The society uses the form prescribed by the Commissioner

20-10  to obtain any information related to the credentials of the provider

20-11  of health care;

20-12     (b) The society includes in the contract a schedule setting forth

20-13  the payments required to be made to the provider of health care

20-14  pursuant to the contract; and

20-15     (c) The contract complies with the provisions of this section.

20-16     3.  The contract must not contain any provision that

20-17  authorizes a society to amend the material terms of the contract or

20-18  any manual, policy or procedure document which is incorporated

20-19  in or referenced by the contract unless:

20-20     (a) The provider of health care agrees to the amendment; or

20-21     (b) The amendment is necessary to comply with state or federal

20-22  law or the accreditation requirements of a private accreditation

20-23  organization. If an amendment is necessary pursuant to this

20-24  paragraph, the provider of health care may terminate the contract.

20-25     4.  The contract must not contain any provision that requires

20-26  the provider of health care to comply with quality improvement or

20-27  utilization management programs or procedures unless the

20-28  requirement is:

20-29     (a) Fully disclosed to the provider of health care not later than

20-30  15 business days before the date the contract is executed; or

20-31     (b) Necessary to comply with accreditation requirements of

20-32  state or federal law or a private accreditation organization. If an

20-33  amendment is necessary pursuant to this paragraph, the provider

20-34  of health care may terminate the contract.

20-35     5.  The contract must not contain any provision that requires

20-36  or permits access to information relating to an insured in violation

20-37  of state or federal law concerning the confidentiality of such

20-38  information.

20-39     6.  The contract must not contain any provision that waives or

20-40  conflicts with any provision of this section.

20-41     7.  A contract that contains any provision in violation of this

20-42  section is void.

20-43     8.  The Commissioner shall develop the form required by

20-44  subsection 2.

21-1      Sec. 24.  Chapter 695B of NRS is hereby amended by adding

21-2  thereto a new section to read as follows:

21-3      1.  The provisions of this section apply to a policy of health

21-4  insurance offered or issued by a hospital or medical service

21-5  corporation if an insured covered by the policy receives health

21-6  care through a defined set of providers of health care who are

21-7  under contract with the hospital or medical service corporation.

21-8      2.  Except as otherwise provided in this section, if an insured

21-9  who is covered by a policy described in subsection 1 is receiving

21-10  medical treatment for a medical condition from a provider of

21-11  health care whose contract with the hospital or medical service

21-12  corporation is terminated during the course of the medical

21-13  treatment, the policy must provide that:

21-14     (a) The insured may continue to obtain medical treatment for

21-15  the medical condition from the provider of health care pursuant to

21-16  this section; and

21-17     (b) The provider of health care is entitled to receive

21-18  reimbursement from the hospital or medical service corporation

21-19  for the medical treatment he provides to the insured pursuant to

21-20  this section at the same rate and under the same conditions as

21-21  before the contract was terminated.

21-22     3.  The coverage required by subsection 2 must be provided

21-23  until the later of:

21-24     (a) The 180th day after the date the contract is terminated; or

21-25     (b) If the medical condition is pregnancy, the 45th day after:

21-26         (1) The date of delivery; or

21-27         (2) If the pregnancy does not end in delivery, the date of the

21-28  end of the pregnancy.

21-29     4.  The requirements of this section do not apply to a provider

21-30  of health care if:

21-31     (a) The provider of health care was under contract with the

21-32  hospital or medical service corporation and the hospital or

21-33  medical service corporation terminated that contract because of

21-34  the incompetence or misconduct of the provider of health care;

21-35  and

21-36     (b) The hospital or medical service corporation did not enter

21-37  into another contract with the provider of health care after the

21-38  contract was terminated pursuant to paragraph (a).

21-39     5.  A policy subject to the provisions of this chapter that is

21-40  delivered, issued for delivery or renewed on or after October 1,

21-41  2003, has the legal effect of including the coverage required by

21-42  this section, and any provision of the policy or renewal thereof

21-43  that is in conflict with this section is void.

21-44     6.  The Commissioner shall adopt regulations to carry out the

21-45  provisions of this section.

22-1      Sec. 25.  NRS 695B.035 is hereby amended to read as follows:

22-2      695B.035  1.  A corporation subject to the provisions of this

22-3  chapter shall not charge a provider of health care a fee to include the

22-4  name of the provider on a list of providers of health care given by

22-5  the corporation to its insureds.

22-6      2.  A corporation specified in subsection 1 shall not contract

22-7  with a provider of health care to provide health care to an insured

22-8  unless:

22-9      (a) The corporation uses the form prescribed by the

22-10  Commissioner to obtain any information related to the credentials

22-11  of the provider of health care;

22-12     (b) The corporation includes in the contract a schedule setting

22-13  forth the payments required to be made to the provider of health

22-14  care pursuant to the contract; and

22-15     (c) The contract complies with the provisions of this section.

22-16     3.  The contract must not contain any provision that

22-17  authorizes a corporation to amend the material terms of the

22-18  contract or any manual, policy or procedure document which is

22-19  incorporated in or referenced by the contract unless:

22-20     (a) The provider of health care agrees to the amendment; or

22-21     (b) The amendment is necessary to comply with state or federal

22-22  law or the accreditation requirements of a private accreditation

22-23  organization. If an amendment is necessary pursuant to this

22-24  paragraph, the provider of health care may terminate the contract.

22-25     4.  The contract must not contain any provision that requires

22-26  the provider of health care to comply with quality improvement or

22-27  utilization management programs or procedures unless the

22-28  requirement is:

22-29     (a) Fully disclosed to the provider of health care not later than

22-30  15 business days before the date the contract is executed; or

22-31     (b) Necessary to comply with accreditation requirements of

22-32  state or federal law or a private accreditation organization. If an

22-33  amendment is necessary pursuant to this paragraph, the provider

22-34  of health care may terminate the contract.

22-35     5.  The contract must not contain any provision that requires

22-36  or permits access to information relating to an insured in violation

22-37  of state or federal law concerning the confidentiality of such

22-38  information.

22-39     6.  The contract must not contain any provision that waives or

22-40  conflicts with any provision of this section.

22-41     7.  A contract that contains any provision in violation of this

22-42  section is void.

22-43     8.  The Commissioner shall develop the form required by

22-44  subsection 2.

23-1      Sec. 26.  NRS 695B.2505 is hereby amended to read as

23-2  follows:

23-3      695B.2505  1.  Except as otherwise provided in subsection 2, a

23-4  corporation subject to the provisions of this chapter shall approve or

23-5  deny a claim relating to a contract for dental, hospital or medical

23-6  services within 30 days after the corporation receives the claim. If

23-7  the claim is approved, the corporation shall pay the claim within 30

23-8  days after it is approved. Except as otherwise provided in this

23-9  section, if the approved claim is not paid within that period, the

23-10  corporation shall pay interest on the claim at a rate of interest equal

23-11  to the prime rate at the largest bank in Nevada, as ascertained by the

23-12  Commissioner of Financial Institutions, on January 1 or July 1, as

23-13  the case may be, immediately preceding the date on which the

23-14  payment was due, plus 6 percent. The interest must be calculated

23-15  from 30 days after the date on which the claim is approved until the

23-16  date on which the claim is paid.

23-17     2.  If the corporation requires additional information to

23-18  determine whether to approve or deny the claim, it shall notify the

23-19  claimant of its request for the additional information within 20 days

23-20  after it receives the claim. The corporation shall notify the provider

23-21  of dental, hospital or medical services of all the specific reasons for

23-22  the delay in approving or denying the claim. The corporation shall

23-23  approve or deny the claim within 30 days after receiving the

23-24  additional information. If the claim is approved, the corporation

23-25  shall pay the claim within 30 days after it receives the additional

23-26  information. If the approved claim is not paid within that period, the

23-27  corporation shall pay interest on the claim in the manner prescribed

23-28  in subsection 1.

23-29     3.  A corporation shall not request a claimant to resubmit

23-30  information that the claimant has already provided to the

23-31  corporation, unless the corporation provides a legitimate reason for

23-32  the request and the purpose of the request is not to delay the

23-33  payment of the claim, harass the claimant or discourage the filing of

23-34  claims.

23-35     4.  A corporation shall not pay only part of a claim that has

23-36  been approved and is fully payable.

23-37     5.  A court shall award costs and reasonable attorney’s fees to

23-38  the prevailing party in an action brought pursuant to this section.

23-39     6.  The payment of interest provided for in this section for the

23-40  late payment of an approved claim may be waived only if the

23-41  payment was delayed because of an act of God or another cause

23-42  beyond the control of the corporation.

23-43     7.  Except as otherwise provided in subsections 8 and 9:

23-44     (a) The Commissioner may require a corporation to provide

23-45  evidence which demonstrates that the corporation has substantially

24-1  complied with the requirements set forth in this section . [,

24-2  including, without limitation, payment within 30 days of at least 95

24-3  percent of approved claims or at least 90 percent of the total dollar

24-4  amount for approved claims.]

24-5      (b) If the Commissioner determines that a corporation is not in

24-6  substantial compliance with the requirements set forth in this

24-7  section, the Commissioner may require the corporation to pay an

24-8  administrative fine in an amount to be determined by the

24-9  Commissioner.

24-10     8.  The Commissioner shall require a corporation to provide

24-11  evidence which demonstrates that the corporation pays at least:

24-12     (a) Ninety-five percent of approved claims within 30 days after

24-13  the date of approval; and

24-14     (b) Ninety percent of the total dollar amount for approved

24-15  claims within 30 days after the date of approval.

24-16     9.  If the Commissioner determines, after notice and a

24-17  hearing, that a corporation is not in complete compliance with the

24-18  requirements set forth in subsection 8, the Commissioner shall

24-19  revoke the certificate of authority of the corporation.

24-20  Notwithstanding any other provision of law, if revocation is

24-21  required pursuant to this subsection, a lesser form of penalty,

24-22  including, without limitation, a suspension or a fine, must not be

24-23  substituted in lieu of the revocation.

24-24     Sec. 27.  Chapter 695C of NRS is hereby amended by adding

24-25  thereto a new section to read as follows:

24-26     1.  The provisions of this section apply to a health care plan

24-27  offered or issued by a health maintenance organization if an

24-28  insured covered by the health care plan receives health care

24-29  through a defined set of providers of health care who are under

24-30  contract with the health maintenance organization.

24-31     2.  Except as otherwise provided in this section, if an insured

24-32  who is covered by a health care plan described in subsection 1 is

24-33  receiving medical treatment for a medical condition from a

24-34  provider of health care whose contract with the health

24-35  maintenance organization is terminated during the course of the

24-36  medical treatment, the health care plan must provide that:

24-37     (a) The insured may continue to obtain medical treatment for

24-38  the medical condition from the provider of health care pursuant to

24-39  this section; and

24-40     (b) The provider of health care is entitled to receive

24-41  reimbursement from the health maintenance organization for the

24-42  medical treatment he provides to the insured pursuant to this

24-43  section at the same rate and under the same conditions as before

24-44  the contract was terminated.

25-1      3.  The coverage required by subsection 2 must be provided

25-2  until the later of:

25-3      (a) The 180th day after the date the contract is terminated; or

25-4      (b) If the medical condition is pregnancy, the 45th day after:

25-5          (1) The date of delivery; or

25-6          (2) If the pregnancy does not end in delivery, the date of the

25-7  end of the pregnancy.

25-8      4.  The requirements of this section do not apply to a provider

25-9  of health care if:

25-10     (a) The provider of health care was under contract with the

25-11  health maintenance organization and the health maintenance

25-12  organization terminated that contract because of the incompetence

25-13  or misconduct of the provider of health care; and

25-14     (b) The health maintenance organization did not enter into

25-15  another contract with the provider of health care after the contract

25-16  was terminated pursuant to paragraph (a).

25-17     5.  An evidence of coverage for a health care plan subject to

25-18  the provisions of this chapter that is delivered, issued for delivery

25-19  or renewed on or after October 1, 2003, has the legal effect of

25-20  including the coverage required by this section, and any provision

25-21  of the evidence of coverage or renewal thereof that is in conflict

25-22  with this section is void.

25-23     6.  The Commissioner shall adopt regulations to carry out the

25-24  provisions of this section.

25-25     Sec. 28.  NRS 695C.050 is hereby amended to read as follows:

25-26     695C.050  1.  Except as otherwise provided in this chapter or

25-27  in specific provisions of this title, the provisions of this title are not

25-28  applicable to any health maintenance organization granted a

25-29  certificate of authority under this chapter. This provision does not

25-30  apply to an insurer licensed and regulated pursuant to this title

25-31  except with respect to its activities as a health maintenance

25-32  organization authorized and regulated pursuant to this chapter.

25-33     2.  Solicitation of enrollees by a health maintenance

25-34  organization granted a certificate of authority, or its representatives,

25-35  must not be construed to violate any provision of law relating to

25-36  solicitation or advertising by practitioners of a healing art.

25-37     3.  Any health maintenance organization authorized under this

25-38  chapter shall not be deemed to be practicing medicine and is exempt

25-39  from the provisions of chapter 630 of NRS.

25-40     4.  The provisions of NRS 695C.110, 695C.170 to 695C.200,

25-41  inclusive, 695C.250 and 695C.265 do not apply to a health

25-42  maintenance organization that provides health care services through

25-43  managed care to recipients of Medicaid under the State Plan for

25-44  Medicaid or insurance pursuant to the Children’s Health Insurance

25-45  Program pursuant to a contract with the Division of Health Care

26-1  Financing and Policy of the Department of Human Resources. This

26-2  subsection does not exempt a health maintenance organization from

26-3  any provision of this chapter for services provided pursuant to any

26-4  other contract.

26-5      5.  The provisions of NRS 695C.1694 and 695C.1695 and

26-6  section 27 of this act apply to a health maintenance organization

26-7  that provides health care services through managed care to

26-8  recipients of Medicaid under the State Plan for Medicaid.

26-9      Sec. 29.  NRS 695C.055 is hereby amended to read as follows:

26-10     695C.055  1.  The provisions of NRS 449.465, 679B.700,

26-11  subsections 2, 4, 18, 19 and 32 of NRS 680B.010, NRS 680B.025 to

26-12  680B.060, inclusive, and [chapter] chapters 686A and 695G of

26-13  NRS apply to a health maintenance organization.

26-14     2.  For the purposes of subsection 1, unless the context requires

26-15  that a provision apply only to insurers, any reference in those

26-16  sections to “insurer” must be replaced by “health maintenance

26-17  organization.”

26-18     Sec. 30.  NRS 695C.125 is hereby amended to read as follows:

26-19     695C.125  1.  A health maintenance organization shall not

26-20  charge a provider of health care a fee to include the name of the

26-21  provider on a list of providers of health care given by the health

26-22  maintenance organization to its enrollees.

26-23     2.  A health maintenance organization shall not contract with

26-24  a provider of health care to provide health care to an insured

26-25  unless:

26-26     (a) The health maintenance organization uses the form

26-27  prescribed by the Commissioner to obtain any information related

26-28  to the credentials of the provider of health care;

26-29     (b) The health maintenance organization includes in the

26-30  contract a schedule setting forth the payments required to be made

26-31  to the provider of health care pursuant to the contract; and

26-32     (c) The contract complies with the provisions of this section.

26-33     3.  The contract must not contain any provision that

26-34  authorizes a health maintenance organization to amend the

26-35  material terms of the contract or any manual, policy or procedure

26-36  document which is incorporated in or referenced by the contract

26-37  unless:

26-38     (a) The provider of health care agrees to the amendment; or

26-39     (b) The amendment is necessary to comply with state or federal

26-40  law or the accreditation requirements of a private accreditation

26-41  organization. If an amendment is necessary pursuant to this

26-42  paragraph, the provider of health care may terminate the contract.

26-43     4.  The contract must not contain any provision that requires

26-44  the provider of health care to comply with quality improvement or

27-1  utilization management programs or procedures unless the

27-2  requirement is:

27-3      (a) Fully disclosed to the provider of health care not later than

27-4  15 business days before the date the contract is executed; or

27-5      (b) Necessary to comply with accreditation requirements of

27-6  state or federal law or a private accreditation organization. If an

27-7  amendment is necessary pursuant to this paragraph, the provider

27-8  of health care may terminate the contract.

27-9      5.  The contract must not contain any provision that requires

27-10  or permits access to information relating to an insured in violation

27-11  of state or federal law concerning the confidentiality of such

27-12  information.

27-13     6.  The contract must not contain any provision that waives or

27-14  conflicts with any provision of this section.

27-15     7.  A contract that contains any provision in violation of this

27-16  section is void.

27-17     8.  The Commissioner shall develop the form required by

27-18  subsection 2.

27-19     Sec. 31.  NRS 695C.185 is hereby amended to read as follows:

27-20     695C.185  1.  Except as otherwise provided in subsection 2, a

27-21  health maintenance organization shall approve or deny a claim

27-22  relating to a health care plan within 30 days after the health

27-23  maintenance organization receives the claim. If the claim is

27-24  approved, the health maintenance organization shall pay the claim

27-25  within 30 days after it is approved. Except as otherwise provided in

27-26  this section, if the approved claim is not paid within that period, the

27-27  health maintenance organization shall pay interest on the claim at a

27-28  rate of interest equal to the prime rate at the largest bank in Nevada,

27-29  as ascertained by the Commissioner of Financial Institutions, on

27-30  January 1 or July 1, as the case may be, immediately preceding the

27-31  date on which the payment was due, plus 6 percent. The interest

27-32  must be calculated from 30 days after the date on which the claim is

27-33  approved until the date on which the claim is paid.

27-34     2.  If the health maintenance organization requires additional

27-35  information to determine whether to approve or deny the claim, it

27-36  shall notify the claimant of its request for the additional information

27-37  within 20 days after it receives the claim. The health maintenance

27-38  organization shall notify the provider of health care services of all

27-39  the specific reasons for the delay in approving or denying the claim.

27-40  The health maintenance organization shall approve or deny the

27-41  claim within 30 days after receiving the additional information. If

27-42  the claim is approved, the health maintenance organization shall pay

27-43  the claim within 30 days after it receives the additional information.

27-44  If the approved claim is not paid within that period, the health

28-1  maintenance organization shall pay interest on the claim in the

28-2  manner prescribed in subsection 1.

28-3      3.  A health maintenance organization shall not request a

28-4  claimant to resubmit information that the claimant has already

28-5  provided to the health maintenance organization, unless the health

28-6  maintenance organization provides a legitimate reason for the

28-7  request and the purpose of the request is not to delay the payment of

28-8  the claim, harass the claimant or discourage the filing of claims.

28-9      4.  A health maintenance organization shall not pay only part of

28-10  a claim that has been approved and is fully payable.

28-11     5.  A court shall award costs and reasonable attorney’s fees to

28-12  the prevailing party in an action brought pursuant to this section.

28-13     6.  The payment of interest provided for in this section for the

28-14  late payment of an approved claim may be waived only if the

28-15  payment was delayed because of an act of God or another cause

28-16  beyond the control of the health maintenance organization.

28-17     7.  Except as otherwise provided in subsections 8 and 9:

28-18     (a) The Commissioner may require a health maintenance

28-19  organization to provide evidence which demonstrates that the health

28-20  maintenance organization has substantially complied with the

28-21  requirements set forth in this section . [, including, without

28-22  limitation, payment within 30 days of at least 95 percent of

28-23  approved claims or at least 90 percent of the total dollar amount for

28-24  approved claims.]

28-25     (b) If the Commissioner determines that a health maintenance

28-26  organization is not in substantial compliance with the requirements

28-27  set forth in this section, the Commissioner may require the health

28-28  maintenance organization to pay an administrative fine in an amount

28-29  to be determined by the Commissioner.

28-30     8.  The Commissioner shall require a health maintenance

28-31  organization to provide evidence which demonstrates that the

28-32  health maintenance organization pays at least:

28-33     (a) Ninety-five percent of approved claims within 30 days after

28-34  the date of approval; and

28-35     (b) Ninety percent of the total dollar amount for approved

28-36  claims within 30 days after the date of approval.

28-37     9.  If the Commissioner determines, after notice and a

28-38  hearing, that a health maintenance organization is not in complete

28-39  compliance with the requirements set forth in subsection 8, the

28-40  Commissioner shall revoke the certificate of authority of the

28-41  health maintenance organization. Notwithstanding any other

28-42  provision of law, if revocation is required pursuant to this

28-43  subsection, a lesser form of penalty, including, without limitation,

28-44  a suspension or a fine, must not be substituted in lieu of the

28-45  revocation.

29-1      Sec. 32.  NRS 695C.330 is hereby amended to read as follows:

29-2      695C.330  1.  The Commissioner may suspend or revoke any

29-3  certificate of authority issued to a health maintenance organization

29-4  pursuant to the provisions of this chapter if he finds that any of the

29-5  following conditions exist:

29-6      (a) The health maintenance organization is operating

29-7  significantly in contravention of its basic organizational document,

29-8  its health care plan or in a manner contrary to that described in and

29-9  reasonably inferred from any other information submitted pursuant

29-10  to NRS 695C.060, 695C.070 and 695C.140, unless any amendments

29-11  to those submissions have been filed with and approved by the

29-12  Commissioner;

29-13     (b) The health maintenance organization issues evidence of

29-14  coverage or uses a schedule of charges for health care services

29-15  which do not comply with the requirements of NRS [695C.170]

29-16  695C.1694 to 695C.200, inclusive, [or 695C.1694, 695C.1695] or

29-17  695C.207;

29-18     (c) The health care plan does not furnish comprehensive health

29-19  care services as provided for in NRS 695C.060;

29-20     (d) The State Board of Health certifies to the Commissioner that

29-21  the health maintenance organization:

29-22         (1) Does not meet the requirements of subsection 2 of NRS

29-23  695C.080; or

29-24         (2) Is unable to fulfill its obligations to furnish health care

29-25  services as required under its health care plan;

29-26     (e) The health maintenance organization is no longer financially

29-27  responsible and may reasonably be expected to be unable to meet its

29-28  obligations to enrollees or prospective enrollees;

29-29     (f) The health maintenance organization has failed to put into

29-30  effect a mechanism affording the enrollees an opportunity to

29-31  participate in matters relating to the content of programs pursuant to

29-32  NRS 695C.110;

29-33     (g) The health maintenance organization has failed to put into

29-34  effect the system for resolving complaints required by NRS

29-35  695C.260 in a manner reasonably to dispose of valid complaints;

29-36     (h) The health maintenance organization or any person on its

29-37  behalf has advertised or merchandised its services in an untrue,

29-38  misrepresentative, misleading, deceptive or unfair manner;

29-39     (i) The continued operation of the health maintenance

29-40  organization would be hazardous to its enrollees; [or]

29-41     (j) The health maintenance organization fails to provide the

29-42  coverage required by section 27 of this act; or

29-43     (k) The health maintenance organization has otherwise failed to

29-44  comply substantially with the provisions of this chapter.

30-1      2.  A certificate of authority must be suspended or revoked only

30-2  after compliance with the requirements of NRS 695C.340.

30-3      3.  If the certificate of authority of a health maintenance

30-4  organization is suspended, the health maintenance organization shall

30-5  not, during the period of that suspension, enroll any additional

30-6  groups or new individual contracts, unless those groups or persons

30-7  were contracted for before the date of suspension.

30-8      4.  If the certificate of authority of a health maintenance

30-9  organization is revoked, the organization shall proceed, immediately

30-10  following the effective date of the order of revocation, to wind up its

30-11  affairs and shall conduct no further business except as may be

30-12  essential to the orderly conclusion of the affairs of the organization.

30-13  It shall engage in no further advertising or solicitation of any kind.

30-14  The Commissioner may , by written order , permit such further

30-15  operation of the organization as he may find to be in the best interest

30-16  of enrollees to the end that enrollees are afforded the greatest

30-17  practical opportunity to obtain continuing coverage for health care.

30-18     Sec. 33.  Chapter 695G of NRS is hereby amended by adding

30-19  thereto a new section to read as follows:

30-20     1.  The provisions of this section apply to a health care plan

30-21  offered or issued by a managed care organization if an insured

30-22  covered by the health care plan receives health care through a

30-23  defined set of providers of health care who are under contract with

30-24  the managed care organization.

30-25     2.  Except as otherwise provided in this section, if an insured

30-26  who is covered by a health care plan described in subsection 1 is

30-27  receiving medical treatment for a medical condition from a

30-28  provider of health care whose contract with the managed care

30-29  organization is terminated during the course of the medical

30-30  treatment, the health care plan must provide that:

30-31     (a) The insured may continue to obtain medical treatment for

30-32  the medical condition from the provider of health care pursuant to

30-33  this section; and

30-34     (b) The provider of health care is entitled to receive

30-35  reimbursement from the managed care organization for the

30-36  medical treatment he provides to the insured pursuant to this

30-37  section at the same rate and under the same conditions as before

30-38  the contract was terminated.

30-39     3.  The coverage required by subsection 2 must be provided

30-40  until the later of:

30-41     (a) The 180th day after the date the contract is terminated; or

30-42     (b) If the medical condition is pregnancy, the 45th day after:

30-43         (1) The date of delivery; or

30-44         (2) If the pregnancy does not end in delivery, the date of the

30-45  end of the pregnancy.

31-1      4.  The requirements of this section do not apply to a provider

31-2  of health care if:

31-3      (a) The provider of health care was under contract with the

31-4  managed care organization and the managed care organization

31-5  terminated that contract because of the incompetence or

31-6  misconduct of the provider of health care; and

31-7      (b) The managed care organization did not enter into another

31-8  contract with the provider of health care after the contract was

31-9  terminated pursuant to paragraph (a).

31-10     5.  An evidence of coverage for a health care plan subject to

31-11  the provisions of this chapter that is delivered, issued for delivery

31-12  or renewed on or after October 1, 2003, has the legal effect of

31-13  including the coverage required by this section, and any provision

31-14  of the evidence of coverage or renewal thereof that is in conflict

31-15  with this section is void.

31-16     6.  The Commissioner shall adopt regulations to carry out the

31-17  provisions of this section.

31-18     Sec. 34.  NRS 695G.270 is hereby amended to read as follows:

31-19     695G.270  1.  A managed care organization that establishes a

31-20  panel of providers of health care for the purpose of offering health

31-21  care services pursuant to chapter 689A, 689B, 689C, 695A, 695B or

31-22  695C of NRS shall not charge a provider of health care a fee to

31-23  include the name of the provider on the panel of providers of health

31-24  care.

31-25     2.  A managed care organization shall not contract with a

31-26  provider of health care to provide health care to an insured

31-27  unless:

31-28     (a) The managed care organization uses the form prescribed

31-29  by the Commissioner to obtain any information related to the

31-30  credentials of the provider of health care;

31-31     (b) The managed care organization includes in the contract a

31-32  schedule setting forth the payments required to be made to the

31-33  provider of health care pursuant to the contract; and

31-34     (c) The contract complies with the provisions of this section.

31-35     3.  The contract must not contain any provision that

31-36  authorizes a managed care organization to amend the material

31-37  terms of the contract or any manual, policy or procedure

31-38  document which is incorporated in or referenced by the contract

31-39  unless:

31-40     (a) The provider of health care agrees to the amendment; or

31-41     (b) The amendment is necessary to comply with state or federal

31-42  law or the accreditation requirements of a private accreditation

31-43  organization. If an amendment is necessary pursuant to this

31-44  paragraph, the provider of health care may terminate the contract.

32-1      4.  The contract must not contain any provision that requires

32-2  the provider of health care to comply with quality improvement or

32-3  utilization management programs or procedures unless the

32-4  requirement is:

32-5      (a) Fully disclosed to the provider of health care not later than

32-6  15 business days before the date the contract is executed; or

32-7      (b) Necessary to comply with accreditation requirements of

32-8  state or federal law or a private accreditation organization. If an

32-9  amendment is necessary pursuant to this paragraph, the provider

32-10  of health care may terminate the contract.

32-11     5.  The contract must not contain any provision that requires

32-12  or permits access to information relating to an insured in violation

32-13  of state or federal law concerning the confidentiality of such

32-14  information.

32-15     6.  The contract must not contain any provision that waives or

32-16  conflicts with any provision of this section.

32-17     7.  A contract that contains any provision in violation of this

32-18  section is void.

32-19     8.  The Commissioner shall develop the form required by

32-20  subsection 2.

32-21     Sec. 35.  Chapter 41A of NRS is hereby amended by adding

32-22  thereto the provisions set forth as sections 36 and 37 of this act.

32-23     Sec. 36.  1.  In an action for damages for medical

32-24  malpractice or dental malpractice in which the defendant is

32-25  insured pursuant to a policy of insurance covering the liability of

32-26  the defendant for a breach of his professional duty toward a

32-27  patient:

32-28     (a) If a settlement conference is required, the defendant and

32-29  the insurer shall attend.

32-30     (b) If the defendant, at a settlement conference or otherwise,

32-31  receives a settlement demand that is equal to the limits of the

32-32  insurance policy of the defendant, the insurer shall, upon receipt

32-33  of a copy of the demand, inform the defendant of any applicable

32-34  rights and obligations possessed by the defendant, whether or not

32-35  derived from statute or the common law, including, without

32-36  limitation, the right of the defendant to obtain independent

32-37  counsel at the expense of the insurer and the method, described in

32-38  this section, by which the defendant may obtain independent

32-39  counsel.

32-40     (c) If the defendant notifies the judge not later than 15 days

32-41  after receiving a settlement demand described in paragraph (b)

32-42  that the defendant wishes to have independent counsel, the judge

32-43  shall, not later than 15 days after receiving such notice, appoint

32-44  independent counsel to represent the defendant. The fees for any

33-1  independent counsel appointed pursuant to this section must be

33-2  paid by the insurer.

33-3      2.  The Commissioner of Insurance shall prescribe a form

33-4  that may be used by an insurer to fulfill the requirements of

33-5  paragraph (b) of subsection 1.

33-6      Sec. 37.  1.  In an action for damages for medical

33-7  malpractice or dental malpractice in which the defendant is

33-8  insured pursuant to a policy of insurance covering the liability of

33-9  the defendant for a breach of his professional duty toward a

33-10  patient, the insurer that issued the policy is liable for the entire

33-11  amount of the damages to the same extent that the defendant is

33-12  liable to the plaintiff if:

33-13     (a) The plaintiff made a settlement offer within the limits of

33-14  coverage under the policy;

33-15     (b) The liability of the defendant was reasonably clear when

33-16  the plaintiff made the settlement offer;

33-17     (c) The insurer, in contravention of the express instructions of

33-18  the defendant, unreasonably rejected the settlement offer in light

33-19  of all the surrounding facts and circumstances; and

33-20     (d) The court enters a judgment in favor of the plaintiff that

33-21  imposes liability on the defendant for damages in an amount that

33-22  exceeds the limits of coverage under the policy.

33-23     2.  The court may determine the liability of an insurer

33-24  pursuant to this section in the underlying action for medical

33-25  malpractice or dental malpractice or in a separate proceeding.

33-26     3.  If, pursuant to this section, an insurer is found to be liable

33-27  for the entire amount of the damages to the same extent that the

33-28  defendant is liable to the plaintiff, the insurer shall be deemed to

33-29  have acted in bad faith regarding its obligations to provide

33-30  insurance coverage.

33-31     Sec. 38.  NRS 287.010 is hereby amended to read as follows:

33-32     287.010  1.  The governing body of any county, school

33-33  district, municipal corporation, political subdivision, public

33-34  corporation or other public agency of the State of Nevada may:

33-35     (a) Adopt and carry into effect a system of group life, accident

33-36  or health insurance, or any combination thereof, for the benefit of its

33-37  officers and employees, and the dependents of officers and

33-38  employees who elect to accept the insurance and who, where

33-39  necessary, have authorized the governing body to make deductions

33-40  from their compensation for the payment of premiums on the

33-41  insurance.

33-42     (b) Purchase group policies of life, accident or health insurance,

33-43  or any combination thereof, for the benefit of such officers and

33-44  employees, and the dependents of such officers and employees, as

33-45  have authorized the purchase, from insurance companies authorized

34-1  to transact the business of such insurance in the State of Nevada,

34-2  and, where necessary, deduct from the compensation of officers and

34-3  employees the premiums upon insurance and pay the deductions

34-4  upon the premiums.

34-5      (c) Provide group life, accident or health coverage through a

34-6  self-insurance reserve fund and, where necessary, deduct

34-7  contributions to the maintenance of the fund from the compensation

34-8  of officers and employees and pay the deductions into the fund. The

34-9  money accumulated for this purpose through deductions from

34-10  the compensation of officers and employees and contributions of the

34-11  governing body must be maintained as an internal service fund as

34-12  defined by NRS 354.543. The money must be deposited in a state or

34-13  national bank or credit union authorized to transact business in the

34-14  State of Nevada. Any independent administrator of a fund created

34-15  under this section is subject to the licensing requirements of chapter

34-16  683A of NRS, and must be a resident of this state. Any contract

34-17  with an independent administrator must be approved by the

34-18  Commissioner of Insurance as to the reasonableness of

34-19  administrative charges in relation to contributions collected and

34-20  benefits provided. The provisions of NRS 689B.030 to 689B.050,

34-21  inclusive, and 689B.575 and section 13 of this act apply to

34-22  coverage provided pursuant to this paragraph, except that the

34-23  provisions of NRS 689B.0359 do not apply to such coverage.

34-24     (d) Defray part or all of the cost of maintenance of a self-

34-25  insurance fund or of the premiums upon insurance. The money for

34-26  contributions must be budgeted for in accordance with the laws

34-27  governing the county, school district, municipal corporation,

34-28  political subdivision, public corporation or other public agency of

34-29  the State of Nevada.

34-30     2.  If a school district offers group insurance to its officers and

34-31  employees pursuant to this section, members of the board of trustees

34-32  of the school district must not be excluded from participating in the

34-33  group insurance. If the amount of the deductions from compensation

34-34  required to pay for the group insurance exceeds the compensation to

34-35  which a trustee is entitled, the difference must be paid by the trustee.

34-36     Sec. 39.  NRS 287.04335 is hereby amended to read as

34-37  follows:

34-38     287.04335  If the Board provides health insurance through a

34-39  plan of self-insurance, it shall comply with the provisions of NRS

34-40  689B.255, 695G.150, 695G.160, 695G.170 and 695G.200 to

34-41  695G.230, inclusive, and section 33 of this act, in the same manner

34-42  as an insurer that is licensed pursuant to title 57 of NRS is required

34-43  to comply with those provisions.

 

35-1      Sec. 40.  Chapter 616B of NRS is hereby amended by adding

35-2  thereto a new section to read as follows:

35-3      1.  If an insurer establishes a panel of providers of health care

35-4  for the purpose of offering health care services pursuant to

35-5  chapters 616A to 617, inclusive, of NRS, the insurer shall not

35-6  charge a provider of health care a fee to include the name of the

35-7  provider on the panel of providers of health care.

35-8      2.  If an insurer violates the provisions of subsection 1, the

35-9  insurer shall pay to the provider of health care an amount that is

35-10  equal to twice the fee charged to the provider of health care.

35-11     3.  A court shall award costs and reasonable attorney’s fees to

35-12  the prevailing party in an action brought pursuant to this section.

35-13     Sec. 41.  The amendatory provisions of this act apply to a:

35-14     1.  Policy of insurance issued or renewed on or after October 1,

35-15  2003.

35-16     2.  Offer to issue a policy of insurance communicated to the

35-17  applicant for the policy on or after October 1, 2003.

35-18     3.  Decision with regard to the issuance of a policy of insurance

35-19  communicated to the applicant for the policy on or after October 1,

35-20  2003.

35-21     4.  Cause of action that accrues on or after October 1, 2003.

 

35-22  H