§ 26.1-36-41 — Contract limitations

1. An insurance company as defined by section 26.1-02-01 issuing a health and accident
policy, a health maintenance organization, or any other entity providing a plan of health
insurance subject to state insurance regulation may not terminate a practitioner's
participating contract, designate a practitioner as nonpayable, or otherwise impose
sanctions on any practitioner solely for an excessive or inappropriate practice pattern
unless the requirements of this section are met. If a practitioner engages in an
excessive or inappropriate practice pattern for the practitioner's specialty, the entity
shall inform the practitioner, in writing, as to the manner in which the practitioner's
practice is excessive or inappropriate. The entity shall consult with the practitioner and
provide a reasonable time period of not less than six months within which to modify the

practitioner's practice pattern. If the excessive or inappropriate practice pattern
continues, the entity may impose reasonable sanctions on the practitioner, terminate
the practitioner's participating contract, or designate the practitioner as nonpayable. If
considered for sanction, termination, or nonpayable status, the affected practitioner
must first be given the opportunity to be present and to be heard by a committee
appointed by the entity which must include at least one representative of the
practitioner's specialty. The entity may not impose sanctions on a practitioner,
terminate a practitioner, or designate a practitioner as nonpayable in the absence of
the committee's recommendation to do so. All reports, practice profiles, data, and
proceedings of the entity relative to a practitioner who is sanctioned, terminated, or
considered for designation as nonpayable are confidential and may not be disclosed or
be subject to subpoena or other legal process. Nonpayable status under this section
may not commence until after appropriate notification to the entity's subscribers and
the affected practitioner. As used in this section, "practitioner" includes an optometrist,
a physician, a chiropractor, or an advanced registered nurse practitioner duly licensed
to practice in this state.
2. If the entity uses a practice profile as a factor to evaluate a practitioner's practice
pattern, the entity shall provide upon request of the practitioner at any time a
description of the criteria, data sources, and methodologies used to compile the
practice profile concerning the practitioner and the manner in which the practice profile
is used to evaluate the practitioner. An entity may not sanction a practitioner, terminate
a practitioner's participating contract, or designate a practitioner as nonpayable on the
basis of a practice profile without informing the practitioner of the specific data
underlying those findings. For purposes of this section, a "practice profile" means a
profile, summary, economic analysis, or other analysis of data concerning the cost,
quality, or quantity of services rendered by an individual practitioner, group of
practitioners, or preferred provider. In addition, an entity in developing practice profiles
or otherwise measuring practitioner performance shall:
a. Make severity adjustments, including allowances for the severity of illness or
condition of the patient mix and allowances for patients with multiple illnesses or
conditions;
b. Periodically evaluate, with input from specialty-specific practitioners as
appropriate, the quality and accuracy of practice profiles, data sources, and
methodologies;
c. Develop and implement safeguards to protect against the unauthorized use or
disclosure of practice profiles; and
d. Provide the opportunity for any practitioner at any time to examine the accuracy,
completeness, or validity of any practice profile concerning the practitioner and to
prepare a written response to the profile. The entity shall negotiate in good faith
with the practitioner to correct any inaccuracies or to make the profile complete. If
the inaccuracies or deficiencies are not corrected to the satisfaction of the
practitioner, the entity shall submit the written response prepared by the
practitioner along with the profile at the time the profile is used pursuant to
subsection 1 or provided to any third party consistent with section 26.1-36-12.4.
3. This section does not limit the authority of the commissioner to obtain from an insurer
information relating to an investigation of suspected or actual fraudulent insurance
acts.