§ 27-8-10-3 — Association policy coverage; reimbursement methods; eligible expenses; managed care

(a) An association policy issued under this
chapter may pay an amount for medically necessary eligible expenses
related to the diagnosis or treatment of illness or injury that exceed the
deductible and coinsurance amounts applicable under section 4 of this
chapter. Payment under an association policy must be based on one (1)
or a combination of the following reimbursement methods, as
determined by the board of directors:
(1) The association's usual and customary fee schedule in effect
on January 1, 2004. If payment is based on the usual and
customary fee schedule in effect on January 1, 2004, the rates of
reimbursement under the fee schedule must be adjusted annually
by a percentage equal to the percentage change in the Indiana
medical care component of the Consumer Price Index for all
Urban Consumers, as published by the United States Bureau of
Labor Statistics during the preceding calendar year.
(2) A health care provider network arrangement. If payment is
based on a health care provider network arrangement,
reimbursement under an association policy must be made
according to:
(A) a network fee schedule for network health care providers
and nonnetwork health care providers; and
(B) any additional coinsurance that applies to the insured under
the association policy if the insured obtains health care services
from a nonnetwork health care provider.
(3) Reimbursement for an eligible expense in an amount equal to
not less than the federal Medicare reimbursement rate for the
eligible expense plus ten percent (10%).
(b) Eligible expenses are the charges for the following health care
services and articles to the extent furnished by a health care provider
in an emergency situation or furnished or prescribed by a physician:
(1) Hospital services, including charges for the institution's most
common semiprivate room, and for private room only when
medically necessary, but limited to a total of one hundred eighty
(180) days in a year.
(2) Professional services for the diagnosis or treatment of injuries,
illnesses, or conditions, other than mental or dental, that are
rendered by a physician or, at the physician's direction, by the
physician's staff of registered or licensed nurses, and allied health
professionals.
(3) The first twenty (20) professional visits for the diagnosis or
treatment of one (1) or more mental conditions rendered during
the year by one (1) or more physicians or, at their direction, by
their staff of registered or licensed nurses, and allied health
professionals.
(4) Drugs and contraceptive devices requiring a physician's
prescription.
(5) Services of a skilled nursing facility for not more than one
hundred eighty (180) days in a year.
(6) Services of a home health agency up to two hundred seventy
(270) days of service a year.
(7) Use of radium or other radioactive materials.
(8) Oxygen.
(9) Anesthetics.
(10) Prostheses, other than dental.
(11) Rental of durable medical equipment which has no personal
use in the absence of the condition for which prescribed.
(12) Diagnostic X-rays and laboratory tests.
(13) Oral surgery for:
(A) excision of partially or completely erupted impacted teeth;
(B) excision of a tooth root without the extraction of the entire
tooth; or
(C) the gums and tissues of the mouth when not performed in
connection with the extraction or repair of teeth.
(14) Services of a physical therapist and services of a speech
therapist.
(15) Professional ambulance services to the nearest health care
facility qualified to treat the illness or injury.
(16) Other medical supplies required by a physician's orders.
An association policy may also include comparable benefits for those
who rely upon spiritual means through prayer alone for healing upon
such conditions, limitations, and requirements as may be determined
by the board of directors.
(c) A managed care organization that issues an association policy
may not refuse to enter into an agreement with a hospital solely
because the hospital has not obtained accreditation from an
accreditation organization that:
(1) establishes standards for the organization and operation of
hospitals;
(2) requires the hospital to undergo a survey process for a fee paid
by the hospital; and
(3) was organized and formed in 1951.
(d) This section does not prohibit a managed care organization from
using performance indicators or quality standards that:
(1) are developed by private organizations; and
(2) do not rely upon a survey process for a fee charged to the
hospital to evaluate performance.
(e) For purposes of this section, if benefits are provided in the form
of services rather than cash payments, their value shall be determined
on the basis of their monetary equivalency.
(f) The following are not eligible expenses in any association policy
within the scope of this chapter:
(1) Services for which a charge is not made in the absence of
insurance or for which there is no legal obligation on the part of
the patient to pay.
(2) Services and charges made for benefits provided under the
laws of the United States, including Medicare and Medicaid,
military service connected disabilities, medical services provided
for members of the armed forces and their dependents or for
employees of the armed forces of the United States, medical
services financed in the future on behalf of all citizens by the
United States.
(3) Benefits which would duplicate the provision of services or
payment of charges for any care for injury or disease either:
(A) arising out of and in the course of an employment subject
to a worker's compensation or similar law; or
(B) for which benefits are payable without regard to fault under
a coverage statutorily required to be contained in any motor
vehicle or other liability insurance policy or equivalent
self-insurance.
However, this subdivision does not authorize exclusion of charges
that exceed the benefits payable under the applicable worker's
compensation or no-fault coverage.
(4) Care which is primarily for a custodial or domiciliary purpose.
(5) Cosmetic surgery unless provided as a result of an injury or
medically necessary surgical procedure.
(6) Any charge for services or articles the provision of which is
not within the scope of the license or certificate of the institution
or individual rendering the services.
(g) The coverage and benefit requirements of this section for
association policies may not be altered by any other inconsistent state
law without specific reference to this chapter indicating a legislative
intent to add or delete from the coverage requirements of this chapter.
(h) This chapter does not prohibit the association from issuing
additional types of health insurance policies with different types of
benefits that, in the opinion of the board of directors, may be of benefit
to the citizens of Indiana.
(i) This chapter does not prohibit the association or its administrator
from implementing uniform procedures to review the medical necessity
and cost effectiveness of proposed treatment, confinement, tests, or
other medical procedures. Those procedures may take the form of
preadmission review for nonemergency hospitalization, case
management review to verify that covered individuals are aware of
treatment alternatives, or other forms of utilization review. Any cost
containment techniques of this type must be adopted by the board of
directors and approved by the commissioner.
As added by Acts 1981, P.L.249, SEC.1. Amended by
P.L.28-1988, SEC.106; P.L.253-1989, SEC.3; P.L.116-1994, SEC.66;
P.L.259-1995, SEC.1; P.L.51-2004, SEC.7; P.L.229-2011,
SEC.252.