As Amended by Senate Committee
Session of 2000
SENATE BILL No. 619
By Committee on Financial Institutions and
Insurance
2-10
10 AN ACT
concerning insurance; relating to health maintenance organi-
11 zations; amending
K.S.A. 1999 Supp. 40-3202, 40-3209, 40-3220, 40-
12 3227, 40-3606 and
45-221 and repealing the existing sections.
13
14 Be it enacted by the Legislature of the
State of Kansas:
15 New Section
1. As used in this act:
16 (a) ``Adjusted
RBC report'' means an RBC report which has been
17 adjusted by the commissioner in accordance
with section (2) 4 and
18 amendments thereto.
19 (b) ``Corrective
order'' means an order issued by the commissioner
20 specifying corrective actions which the
commissioner has determined are
21 required.
22 (c) ``Domestic
health organization'' means any health organization
23 which is licensed and organized in this
state.
24 (d) ``Foreign
health organization'' means any health organization
not
25 domiciled in this state which
is licensed to do business in this state
26 pursuant to article 41
articles 19a, 19c or 32 of chapter 40 of the
Kansas
27 Statutes Annotated or K.S.A.
40-209, and amendments thereto.
28 (e) ``NAIC''
means the national association of insurance
29 commissioners.
30 (f) ``Health
organization'' means a health maintenance organization,
31 limited health service organization, dental
or vision plan, hospital, medical
32 and dental indemnity or service corporation
or other managed care or-
33 ganization licensed under articles 19a, 19c
or 32 of chapter 40 of the
34 Kansas Statutes Annotated, and amendments
thereto. This definition
35 shall not include an organization that is
licensed as either a life and health
36 insurer or a property and casualty insurer
under articles 4, 5, 9, 10, 11,
37 12, 12a, 15 or 16 of chapter 40 of the
Kansas Statutes Annotated, and
38 amendments thereto, and that is otherwise
subject to either the life or
39 property and casualty RBC requirements in
K.S.A. 1999 Supp. 40-2c01
40 et seq., and amendments thereto.
41 (g) ``RBC'' means
risk-based capital.
42 (h) ``RBC
instructions'' means the risk-based capital instructions
for
43 managed care organizations
promulgated by the NAIC which may be
2
1 amended by NAIC from time to
time in accordance with the procedures
2 adopted by the NAIC
are in effect on December 31, 1999, or any
3 later version as adopted by the
commissioner in rules and
4 regulations.
5 (i) ``RBC
level'' means a health organization's company action level
6 RBC, regulatory action level RBC,
authorized control level RBC, or man-
7 datory control level RBC where:
8
(1) ``Company action level RBC'' means, with respect to any
health
9 organization, the product of 2.0 and
its authorized control level RBC;
10 (2) ``regulatory
action level RBC'' means the product of 1.5 and its
11 authorized control level RBC;
12 (3) ``authorized
control level RBC'' means the number determined
13 under the risk-based capital formula in
accordance with the RBC instruc-
14 tions; and
15 (4) ``mandatory
control level RBC'' means the product of .70 and the
16 authorized control level RBC.
17 (j) ``RBC plan''
means a comprehensive financial plan containing the
18 elements specified in section 6, and
amendments thereto. If the com-
19 missioner rejects the RBC plan, and it is
revised by the health organiza-
20 tion, with or without the commissioner's
recommendation, the plan shall
21 be called the ``revised RBC plan.''
22 (k) ``RBC
report'' means the report required by section 2
sections 2,
23 3 and 4, and amendments
thereto.
24 (l) ``Total
adjusted capital'' means the sum of:
25 (1) A health
organization's capital and surplus or surplus only if
a
26 mutual insurer as
determined in accordance with the annual finan-
27 cial statements required to be filed
under articles 19a, 19c or 32 of
28 chapter 40 of the Kansas Statutes
Annotated and amendments
29 thereto; and
30 (2) such other
items, if any, as the RBC instructions may provide.
31
(m) ``Commissioner'' means the commissioner of insurance.
32 New Sec.
2. Every (a) Except as provided in
paragraph (b),
33 every domestic health
organization shall prepare and submit to the com-
34 missioner, on or before March 1, a report
of its RBC levels as of the end
35 of the calendar year just ended in a form
and containing such information
36 as is required by the RBC instructions. In
addition, every domestic health
37 organization shall file its RBC report:
38 (a)
(1) With the NAIC in accordance with the RBC
instructions; and
39 (b)
(2) with the insurance commissioner in any state
in which the
40 health organization is authorized to do
business, if such insurance com-
41 missioner has notified the health
organization of its request in writing, in
42 which case, the health organization shall
file its RBC report not later than
43 the later of:
3
1
(1) (A) 15 days from the
receipt of notice to file its RBC report with
2 that state; or
3
(2) (B) the filing date
otherwise specified in this subsection.
4 (b) The risk-based
capital requirements of this section shall not
5 apply to any health
organization contracting with the Kansas de-
6 partment of social and
rehabilitation services to provide services
7 provided under title XIX and
title XXI of the social security act or
8 any other public benefits,
provided the public benefit contracts rep-
9 resent at least 90% of the
premium volume of the health
10 organization.
11 New Sec.
3. (a) A health organization's RBC shall be determined in
12 accordance with the formula set forth in
the RBC instructions. The for-
13 mula shall take into account and may adjust
for the covariance between:
14 (1) Asset
risk;
15 (2) credit
risk;
16 (3) underwriting
risk; and
17 (4) all other
business risks and such other relevant risks as are set
18 forth in the RBC instructions; determined
in each case by applying the
19 factors in the manner set forth in the RBC
instructions.
20 (b) An excess of
capital over the amount produced by the risk-based
21 capital requirements contained in this act
and the formulas, schedules
22 and instructions referenced in this act is
desirable in the business of in-
23 surance. Accordingly, each health
organization should seek to maintain
24 capital above the RBC levels required by
this act. Additional capital is
25 used and useful in the insurance business
and helps to secure an insurer
26 health organization against
various risks inherent in, or affecting, the
27 business of insurance and not accounted for
or only partially measured
28 by the risk-based capital requirements
contained in this act.
29 New Sec.
4. If a domestic health organization files an RBC report
30 which in the judgment of the commissioner
is inaccurate, the commis-
31 sioner shall adjust the RBC report to
correct the inaccuracy and shall
32 notify such health organization of the
adjustment. The notice shall contain
33 a statement of the reason for the
adjustment. A RBC report as so adjusted
34 is referred to as an adjusted RBC
report.
35 New Sec.
5. ``Company action level event'' means any of the follow-
36 ing events:
37 (a) The filing of
an RBC report by a health organization which indi-
38 cates that a health organization's total
adjusted capital is greater than or
39 equal to its regulatory action level RBC
but less than its company action
40 level RBC.
41 (b) The
notification by the commissioner to the health
organization
42 of an adjusted RBC report that
indicates the event described in subsec-
43 tion (a), unless the health
organization challenges the adjusted RBC re-
4
1 port pursuant to section 19,
and amendments thereto, and such challenge
2 has not been rejected by the
commissioner notification by the com-
3 missioner to the health
organization of an adjusted RBC report that
4 indicates the event described
in subsection (a) if:
5
(1) The health organization does not challenge the
adjusted
6 RBC report pursuant to section
19, and amendments thereto; or
7
(2) the commissioner has rejected such challenge after
a
8 hearing.
9 New Sec.
6. In the event of a company action level event, the
health
10 organization shall prepare and submit to
the commissioner an RBC plan
11 which shall:
12 (a) Identify the
conditions in the health organization's operation
13 which contribute to the company action
level event;
14 (b) contain
proposals of corrective actions which the health organi-
15 zation intends to take that would be
expected to result in the elimination
16 of the company action level event;
17 (c) provide
projections of the health organization's financial results in
18 the current year and at least the two
succeeding years, both in the absence
19 of the proposed corrective actions and
giving effect to the proposed cor-
20 rective actions, including projections of
statutory balance sheets, oper-
21 ating income, net income, capital and
surplus, and RBC levels. The pro-
22 jections for both new and renewal business
may include separate
23 projections for each major line of business
and separately identify each
24 significant income, expense and benefit
component;
25 (d) identify the
key assumptions impacting the health organization's
26 projections and the sensitivity of the
projections to the assumptions; and
27 (e) identify the
quality of, and problems associated with, the health
28 organization's business, including, but not
limited to, its assets, antici-
29 pated business growth and associated
surplus strain, extraordinary expo-
30 sure to risk, mix of business and use of
reinsurance in each case, if any.
31 New Sec.
7. The RBC plan shall be submitted:
32 (a) Within 45
days of the company action level event; or
33 (b) within 45
days after notification to the health organization that
34 the commissioner has rejected the health
organization's challenge to an
35 adjusted RBC report pursuant to section 19
and amendments thereto.
36 New Sec.
8. Within 60 days after the submission by a health organ-
37 ization of an RBC plan to the commissioner,
the commissioner shall notify
38 the health organization whether the RBC
plan shall be implemented or
39 is, in the judgment of the commissioner,
unsatisfactory. If the commis-
40 sioner determines the RBC plan is
unsatisfactory, the notification to the
41 health organization shall state the reasons
for the determination, and may
42 state proposed revisions which, in the
judgments of the commissioner,
43 will render the RBC plan satisfactory. Upon
notification from the com-
5
1 missioner, the health organization
shall prepare a revised RBC plan and
2 shall submit the revised RBC plan to
the commissioner:
3 (a) Within
45 days after the notification from the commissioner; or
4 (b) within
45 days after a notification to the health organization that
5 the commissioner has, pursuant to
section 19, and amendments thereto,
6 rejected the health organization's
challenge to the commissioner's original
7 findings as authorized by this
section.
8 New Sec.
9. In the event of a notification by the commissioner to a
9 health organization that the
health organization's RBC plan or revised
10 RBC plan is unsatisfactory, the
commissioner, subject to the health or-
11 ganization's right to a hearing under
section 19, and amendments thereto,
12 may specify in the notification that the
notification constitutes a regulatory
13 action level event.
14 New Sec.
10. Every domestic health organization that files an RBC
15 plan or revised RBC plan with the
commissioner shall file a copy of the
16 RBC plan or revised RBC plan with the
insurance commissioner in any
17 state in which the health organization is
authorized to do business if:
18 (a) Such state
has an RBC provision substantially similar to section
19 20, and amendments thereto; and
20 (b) the insurance
commissioner of that state has notified the health
21 organization of such insurance
commissioner's request for the filing in
22 writing, in which case the health
organization shall file a copy of the RBC
23 plan or revised RBC plan in that state no
later than the later of:
24 (1) 15 days after
the receipt of notice to file a copy of its RBC plan
25 or revised RBC plan with the state; or
26 (2) the date on
which the final RBC plan or revised RBC plan is filed
27 under section 3 or 4
7 or 8, and amendments thereto.
28 New Sec.
11. ``Regulatory action level event'' means, with respect
to
29 any health organization, any of the
following events:
30 (a) The filing of
an RBC report by the health organization which
31 indicates that the health organization's
total adjusted capital is greater
32 than or equal to its authorized control
level RBC but less than its regu-
33 latory action level RBC;
34 (b) the
notification by the commissioner to a health organization
of
35 an adjusted RBC report that
indicates the result described in subsection
36 (a) if the health organization does
not challenge the adjusted RBC report
37 pursuant to section 19, and
amendments thereto;
38 (c) the
filing of an adjusted RBC report that indicates the result
de-
39 scribed in subsection (a) if the
commissioner has rejected the health or-
40 ganization's challenge after a
hearing held pursuant to K.S.A. 1999 Supp.
41 40-2c19, and amendments
thereto the notification by the commis-
42 sioner to the health organization of
an adjusted RBC report that
43 indicates the event described in
subsection (a) if:
6
1
(1) The health organization does not challenge the
adjusted
2 RBC report pursuant to section
19, and amendments thereto; or
3
(2) the commissioner has rejected such challenge after a
hear-
4 ing; and;
5
(d) (c) the failure of the
health organization to file an RBC report by
6 the filing date, unless the health
organization has provided an explanation
7 for such failure which is
satisfactory to the commissioner and has cured
8 the failure within 10 days after the
filing date;
9
(e) (d) the failure of the
health organization to submit an RBC plan
10 to the commissioner within the time period
set forth in section 7, and
11 amendments thereto;
12 (f)
(e) notification by the commissioner to the
health organization
13 that:
14 (1) The RBC plan
or revised RBC plan submitted by the health or-
15 ganization is, in the judgment of the
commissioner, unsatisfactory; and
16 (2) (A) the
health organization has not challenged the determination
17 pursuant to section 19, and amendments
thereto; or
18 (B) the
commissioner has rejected such challenge.
19 (g)
(f) Notification by the commissioner to the
health organization
20 that the health organization has failed to
adhere to its RBC plan or revised
21 RBC plan, but only if such failure has a
substantial adverse effect on the
22 ability of the health organization to
eliminate the company action level
23 event in accordance with its RBC plan or
revised RBC plan and the
24 commissioner has so stated in the
notification, if:
25 (1) The health
organization has not challenged such determination
26 pursuant to section 19, and amendments
thereto; or
27 (2) the
commissioner has rejected such challenge after a hearing.
28 New Sec.
12. In the event of a regulatory action level event, the
29 commissioner shall:
30 (a) Require the
health organization to prepare and submit an RBC
31 plan or, if applicable, a revised RBC
plan;
32 (b) perform such
examination or analysis as the commissioner deems
33 necessary of the assets, liabilities and
operations of the health organization
34 including a review of its RBC plan or
revised RBC plan; and
35 (c) subsequent to
the examination or analysis, issue a corrective order
36 specifying such actions as the commissioner
determines are required.
37 New Sec.
13. In determining corrective actions, the commissioner
38 may take into account such factors as are
deemed relevant with respect
39 to the health organization based upon the
commissioner's examination or
40 analysis of the assets, liabilities and
operations of the health organization,
41 including, but not limited to, the results
of any sensitivity tests undertaken
42 pursuant to the RBC instructions. The RBC
plan or revised RBC plan
43 shall be submitted:
7
1 (a) Within
45 days after the occurrence of the regulatory action level
2 event;
3 (b) within
45 days after the notification to the health organization
4 that the commissioner has rejected
the health organization's challenge to
5 an adjusted RBC report pursuant to
section 19, and amendments thereto;
6 or
7 (c) within
45 days after notification to the health organization that
8 the commissioner has rejected the
health organization's challenge to a
9 revised RBC plan pursuant to section
19, and amendments thereto.
10 New Sec.
14. The commissioner may retain actuaries and investment
11 experts and other consultants as may be
necessary in the judgment of the
12 commissioner to review the health
organization's RBC plan or revised
13 RBC plan, examine or analyze the assets,
liabilities and operations of the
14 health organization and formulate the
corrective order with respect to
15 the health organization. The reasonable
fees, costs and expenses relating
16 to consultants shall be borne by the
affected health organization or other
17 party as directed by the commissioner.
18 New Sec.
15. ``Authorized control level event'' means any of the
fol-
19 lowing events:
20 (a) The filing of
an RBC report by the health organization which
21 indicates that the health organization's
total adjusted capital is greater
22 than or equal to its mandatory control
level RBC but less than its au-
23 thorized control level RBC;
24 (b) the
notification by the commissioner to the health organization of
25 an adjusted RBC report that indicates the
event described in subsection
26 (a) if:
27 (1) The health
organization does not challenge the adjusted RBC re-
28 port pursuant to section 19, and amendments
thereto; or
29 (2) the
commissioner has rejected such challenge after a hearing;
30 (c) the failure
of the health organization to respond, in a manner
31 satisfactory to the commissioner, to a
corrective order if the health or-
32 ganization has not challenged the
corrective order under section 19, and
33 amendments thereto; or
34 (d) if the
commissioner has rejected the challenge to the corrective
35 order or modified the corrective order
pursuant to section 19, and amend-
36 ments thereto, the failure of the health
organization to respond, in a
37 manner satisfactory to the commissioner, to
the corrective order subse-
38 quent to rejection or modification by the
commissioner.
39 New Sec.
16. In the event of an authorized control level event with
40 respect to a health organization, the
commissioner:
41 (a) Shall take
such actions as are required under sections 11 through
42 14, and amendments thereto, regarding a
health organization with respect
43 to which a regulatory action level event
has occurred; or
8
1 (b) if the
commissioner deems it to be in the best interests of the
2 policyholders and creditors of the
health organization and of the public,
3 shall take such actions as are
necessary to cause the health organization
4 to be placed under regulatory control
pursuant to K.S.A. 40-3605 et seq.,
5 and amendments thereto. In the event
the commissioner takes such ac-
6 tions, the authorized control level
event shall be deemed sufficient
7 grounds for the commissioner to take
action under K.S.A. 40-3605 et seq.,
8 and amendments thereto, and the
commissioner shall have the rights,
9 powers and duties with respect to the
health organization as are set forth
10 in K.S.A. 40-3605 et seq., and
amendments thereto. In the event the
11 commissioner takes actions under this
subsection pursuant to an adjusted
12 RBC report, the health organization shall
be entitled to such protections
13 as are afforded to health organizations
under the provisions of K.S.A. 77-
14 501 et seq., and amendments thereto,
pertaining to summar proceedings.
15 New Sec.
17. ``Mandatory control event'' means any of the following
16 events:
17 (a) The filing of
an RBC report by the health organization which
18 indicates that the health organization's
total adjusted capital is less than
19 its mandatory control level RBC;
20
(b) the notification by the commissioner to the
health organization
21 of an adjusted RBC report that indicates
the event described in subsec-
22 tion (a) if:
23 (1) The health
organization does not challenge the adjusted RBC re-
24 port pursuant to section 19 and amendments
thereto; or
25 (2) the
commissioner has rejected such challenge.
26 New Sec.
18. In the event of a mandatory control level event the
27 commissioner shall take actions as are
necessary to cause the health or-
28 ganization to be placed under regulatory
control under K.S.A. 40-3605 et
29 seq., and amendments thereto. In
that event, the mandatory control level
30 event shall be deemed sufficient grounds
for the commissioner to take
31 action under K.S.A. 40-3605 et seq.,
and amendments thereto, and the
32 commissioner shall have the rights, powers
and duties with respect to the
33 health organization as are set forth in
K.S.A. 40-3605 et seq., and amend-
34 ments thereto. In the event the
commissioner takes actions pursuant to
35 an adjusted RBC report, the health
organization shall be entitled to such
36 protections as are afforded to health
organizations under the provisions
37 of K.S.A. 77-501 et seq. and
amendments thereto, pertaining to summary
38 proceedings. Notwithstanding any of the
foregoing, the commissioner
39 may forego action for up to 90 days after
the mandatory control level
40 event if there is a reasonable expectation
that the mandatory control level
41 event may be eliminated within the 90-day
period.
42 New Sec.
19. (a) Upon notification to a health organization by the
43 commissioner of an adjusted RBC report;
or
9
1 (b) upon
notification to an health organization by the commissioner
2 that:
3 (1) The
health organization's RBC plan or revised RBC plan is un-
4 satisfactory; and
5 (2) such
notification constitutes a regulatory action level event with
6 respect to such health organization;
or
7 (c) upon
notification to any health organization by the commissioner
8 that the health organization has
failed to adhere to its RBC plan or revised
9 RBC plan and that such failure has a
substantial adverse effect on the
10 ability of the health organization to
eliminate the company action level
11 event with respect to the health
organization in accordance with its RBC
12 plan or revised RBC plan; or
13 (d) upon
notification to an health organization by the commissioner
14 of a corrective order with respect to the
health organization, the health
15 organization shall have the right to a
hearing under the Kansas adminis-
16 trative procedure act, at which the health
organization may challenge any
17 determination or action by the
commissioner. The health organization
18 shall notify the commissioner of its
request for a hearing within five days
19 after the notification by the commissioner
under subsections (a), (b), (c)
20 or (d). Upon receipt of the health
organization's request for a hearing,
21 the commissioner shall set a date for the
hearing, which date shall be no
22 less than 10 nor more than 30 days after
receipt of the health organiza-
23 tion's request. Such hearing shall be
governed by K.S.A. 77-513 through
24 77-532 and amendments thereto.
25 New Sec.
20. (a) All RBC reports, RBC plans and any corrective
26 orders, including the working papers and
the results of any analysis of a
27 health organization performed under this
act shall be kept confidential
28 by the commissioner. This information shall
not be made public or subject
29 to subpoena, other than by the commissioner
and then only for the pur-
30 pose of enforcement actions taken by the
commissioner pursuant to this
31 act or any other provision of the insurance
laws of this state.
32 (b) RBC
instructions, RBC reports, adjusted RBC reports, RBC
33 plans and revised RBC plans are intended
solely for use by the commis-
34 sioner in monitoring the solvency of health
organizations and the need
35 for possible corrective action with respect
to health organizations and shall
36 not be used by the commissioner for
ratemaking nor considered or intro-
37 duced as evidence in any rate proceeding
nor used by the commissioner
38 to calculate or derive any elements of an
appropriate premium level or
39 rate of return for any line of insurance
which an health organization or
40 any affiliate is authorized to write.
41 (c) (1) The
commissioner may share or exchange any docu-
42 ments, materials or other
information, including confidential and
43 privileged documents referred to in
subsection (a), received in the
10
1 performance of the
commissioner's duties under this act, with:
2
(A) The NAIC;
3
(B) other state, federal or international regulatory
agencies;
4 and
5
(C) other state, federal or international law
enforcement
6 authorities.
7 (2)
(A) The sharing or exchanging of documents, materials
or
8 other information under this
subsection shall be conditioned upon
9 the recipient's authority and
agreement to maintain the confidential
10 and privileged status, if any, of the
documents, materials or other
11 information being shared or
exchanged.
12 (B) No
waiver of an existing privilege or claim of
confidentiality
13 in the documents, materials or
information shall occur as a result
14 of disclosure to the commissioner
under this section or as a result
15 of sharing as authorized by paragraph
(1) of subsection (c).
16 (3) The
commissioner of insurance is hereby authorized to
17 adopt such rules and regulations
establishing protocols governing
18 the exchange of information as may be
necessary to implement and
19 carry out the provisions of this
act.
20 New Sec.
21. The comparison of a health organization's total ad-
21 justed capital to any of its RBC levels is
a regulatory tool, and shall not
22 be used to rank health organizations
generally. Therefore, except as oth-
23 erwise required under the provisions of
this act, the making, publishing,
24 disseminating, circulating or placing
before the public, or causing, directly
25 or indirectly to be made, published,
disseminated, circulated or placed
26 before the public, in a newspaper, magazine
or other publication, or in
27 the form of a notice, circular, pamphlet,
letter or poster, or over any radio
28 or television station, or in any other way,
an advertisement, announce-
29 ment or statement containing an assertion,
representation or statement
30 with regard to the RBC levels of any health
organization, or of any com-
31 ponent derived in the calculation, by any
health organization, agent, bro-
32 ker or other person engaged in any manner
in the insurance business is
33 prohibited. Notwithstanding the foregoing,
if any materially false state-
34 ment with respect to the comparison
regarding a health organization's
35 total adjusted capital to any of its RBC
levels or an inappropriate com-
36 parison of any other amount to the health
organization's RBC levels is
37 published in any written publication and
the health organization is able
38 to demonstrate to the commissioner with
substantial proof the falsity or
39 misrepresentative nature of such statement,
the health organization may
40 publish a rebuttal if the sole purpose of
such publication is to rebut the
41 materially false or improper statement.
42 New Sec.
22. The provisions of this act are supplemental to any
other
43 provisions of the laws of this state, and
shall not preclude nor limit any
11
1 other powers or duties of the
commissioner under such laws, including
2 but not limited to K.S.A. 40-3605
et seq. and amendments thereto.
3 New Sec.
23. Any foreign health organization, upon the written re-
4 quest of the commissioner, shall
submit to the commissioner an RBC
5 report as of the end of the calendar
year just ended the later of:
6 (a) The
date an RBC report would be required to be filed by a do-
7 mestic health organization under this
act; or
8 (b) 15 days
after the request is received by the foreign health
9 organization.
10 Any foreign health
organization, at the written request of the commis-
11 sioner, shall submit promptly to the
commissioner a copy of any RBC
12 plan that is filed with the insurance
commissioner of any other state.
13 New Sec.
24. In the event of a company action level event,
regulatory
14 action level event or authorized control
level event with respect to any
15 foreign health organization as determined
under the RBC statute appli-
16 cable in the state of domicile of the
health organization or, if no RBC
17 provision is in force in that state, under
the provisions of this act, if the
18 insurance commissioner of the state of
domicile of the foreign health
19 organization fails to require the foreign
health organization to file an RBC
20 plan in the manner specified under the RBC
statute or, if there are no
21 RBC provisions in force in the state, under
section 5, 6, 7, 8, 9 and 10,
22 and amendments thereto, the commissioner
may require the foreign
23 health organization to file an RBC plan
with the commissioner. In such
24 event, the failure of the foreign health
organization to file an RBC plan
25 with the commissioner shall be grounds to
order the health organization
26 to cease and desist from writing new
insurance business in this state.
27 New Sec.
25. In the event of a mandatory control level event with
28 respect to any foreign health organization,
if no domiciliary receiver has
29 been appointed with respect to the foreign
health organization under the
30 rehabilitation and liquidation statute
applicable in the state of domicile
31 of the foreign health organization, the
commissioner may make applica-
32 tion to the district court as permitted
under K.S.A. 40-3605 et seq. and
33 amendments thereto with respect to the
liquidation of property of foreign
34 health organizations found in this state,
and the occurrence of the man-
35 datory control level event shall be
considered adequate grounds for the
36 application.
37 New Sec.
26. All notices by the commissioner to a health organiza-
38 tion which may result in regulatory action
under this act shall be effective
39 upon dispatch if transmitted by registered
or certified mail, or in the case
40 of any other transmission shall be
effective upon the health organization's
41 receipt of such notice.
42 New Sec.
27. If any provision of this act, or the application of the
act
43 to any person or circumstance, is held
invalid, such determination shall
12
1 not affect the provisions or
applications of this act which can be given
2 effect without the invalid provision
or application, and to that end the
3 provisions of this act are
severable.
4 New
Sec. 28. Under this act, the RBC instructions, RBC
reports,
5 adjusted RBC reports, RBC
plans and revised RBC plans are intended
6 solely for use by the
commissioner in monitoring the solvency of health
7 organizations and the need
for possible corrective action with respect to
8 health organizations and
shall not be:
9
(a) Used by the commissioner for ratemaking;
10
(b) considered or introduced as evidence in any rate
proceeding; or
11 (c) used
by the commissioner to calculate or derive any elements
of
12 an appropriate premium level or
rate of return for any line of insurance
13 that a health organization or any
affiliate is authorized to write.
14 New Sec. 28. (a) Any
regulatory action based upon any RBC
15 report required to be filed by a
health organization for such health
16 organization's operations during
calendar years 2000 and 2001
17 shall be subject to the
following:
18 (1) In the
event of a company action level event with respect to
19 any health organization, the
commissioner shall take no regulatory
20 action under this act with respect to
such health organization.
21 (2) In the
event of a regulatory action level event with respect
22 to any health organization under
either subsection (a) or (b) of sec-
23 tion 11, and amendments thereto, the
commissioner shall take such
24 action with respect to such health
organization under sections 5
25 through 10, inclusive, and amendments
thereto, as the commis-
26 sioner deems necessary.
27 (3) In the
event of a regulatory action level event with respect
28 to any health organization under any
of subsections (c), (d), (e) or
29 (f) of section 11, and amendments
thereto, or an authorized control
30 level event, the commissioner shall
take such action with respect to
31 such health organization under
sections 11 through 14, inclusive,
32 and amendments thereto, as the
commissioner deems necessary.
33 (4) In the
event of a mandatory control level event with respect
34 to any health organization, the
commissioner shall take action with
35 respect to such health organization
as required under sections 15
36 and 16, and amendments
thereto.
37 (b) The
provisions of subsection (a) shall not limit the right
of
38 the commissioner to proceed as
authorized by any other provision
39 of chapter 40 of the Kansas Statutes
Annotated, and amendments
40 thereto or any rule and regulation
adopted thereunder.
41 New Sec.
29. The commissioner may adopt reasonable rules
42 and regulations necessary for the
implementation of this act.
43 New Sec.
30. Sections 1 through 30, inclusive, and
amendments
13
1 thereto, shall constitute and
may be cited as the health organization
2 risk based capital
act.
3 New Sec.
29. 31. (a) If uncovered
expenditures exceed eight percent
4 10% of total health
care expenditures for two consecutive months, a
5 health maintenance organization shall
place an uncovered expenditure
6 insolvency deposit with the
commissioner, with an organization or trustee
7 acceptable to the commissioner
through which a custodial or controlled
8 account is maintained, cash or
securities that are acceptable to the com-
9 missioner. The deposit at all times
shall have a fair market value in an
10 amount 120% of the health maintenance
organization's outstanding lia-
11 bility for uncovered expenditures for
enrollees in this state, including
12 incurred but not reported claims, and shall
be calculated as of the first
13 day of the month and maintained for the
remainder of the month. If a
14 health maintenance organization is not
otherwise required to file a quar-
15 terly report, such health maintenance
organization shall file a report
16 within 45 days of the end of the calendar
quarter with information suf-
17 ficient to demonstrate compliance with this
section.
18 (b) The deposit
required under this section shall be in addition to the
19 deposit required under K.S.A. 40-3227, and
amendments thereto, and
20 shall be deemed to be an admitted asset of
the health maintenance or-
21 ganization in the determination of such
health maintenance organization's
22 net worth. All income from deposits or
trust accounts shall be deemed
23 to be assets of the health maintenance
organization and may be withdrawn
24 from the deposit or account quarterly with
the approval of the
25 commissioner.
26 (c) A health
maintenance organization that has made a deposit may
27 withdraw that deposit or any part of the
deposit if: (1) A substitute deposit
28 of cash or securities of equal amount and
value is made; (2) the fair
29 market value of such substitute deposit
exceeds the amount of the re-
30 quired deposit; or (3) the deposit
required under subsection (a) is re-
31 duced or eliminated. Deposits,
substitutions or withdrawals may be made
32 only with the prior written approval of the
commissioner.
33 (d) The deposit
required under this section shall be held in trust and
34 may be used only as provided under this
section. The commissioner may
35 use all or any portion of the deposit of an
insolvent health maintenance
36 organization for administrative costs
associated with administering such
37 deposit and the payment of any claim of an
enrollee of this state for
38 uncovered expenditures in this state. Each
claim for uncovered expend-
39 itures shall be paid on a pro rata basis
based on assets available to pay
40 the ultimate liability for incurred
expenditures. A partial distribution may
41 be made pending final distribution. Any
amount of such deposit remain-
42 ing shall be paid into the liquidation or
receivership of the health main-
43 tenance organization.
14
1 (e) The
commissioner by regulation may prescribe the time, manner
2 and form for filing claims under
subsection (d).
3 (f) The
commissioner by regulation or order may require health
4 maintenance organizations to file
annual, quarterly or more frequent re-
5 ports deemed necessary to demonstrate
compliance with this section. The
6 commissioner may require that the
reports include liability for uncovered
7 expenditures as well as an audit
opinion.
8 (g) The
deposit required under this section may be satisfied through
9 other arrangement acceptable to the
commissioner including parental
10 guarantees and letters of credit.
11 (h) The
commissioner may adopt rules and regulations to implement
12 this section.
13 New Sec.
30. 32. (a) In the event of an
insolvency of a health main-
14 tenance organization, the commissioner may
order that all other carriers
15 that participated in the enrollment process
with the insolvent health main-
16 tenance organization at a group's last
regular enrollment period shall offer
17 the group's enrollees of the insolvent
health maintenance organization a
18 30-day enrollment period commencing upon
the date of insolvency. Un-
19 der such order each carrier shall offer to
each enrollee of the insolvent
20 health maintenance organization the same
coverages that such insolvent
21 health maintenance organization had offered
to each enrollee of the
22 group at such group's last regular
enrollment period at rates determined
23 in accordance with the successor health
maintenance organization's ex-
24 isting rating methodology.
25 (b) Any
individual or enrollee who has health insurance coverage in-
26 voluntarily terminated because of the
insolvency of such individual's or
27 enrollee's health maintenance organization
shall be treated as the equiv-
28 alent of a federally defined eligible
individual for the purposes of the
29 Kansas uninsurable health insurance plan
act, K.S.A. 40-2117 et seq. and
30 amendments thereto.
31 New Sec.
31. 33. (a) A rehabilitation
liquidation or conservation of
32 a health maintenance organization shall be
deemed to be the rehabilita-
33 tion, liquidation or conservation of an
insurance company and shall be
34 conducted under the supervision of the
commissioner pursuant to the law
35 governing the rehabilitation, liquidation
or conservation of insurance
36 companies. The commissioner may apply for
an order directing the com-
37 missioner to rehabilitate, liquidate or
conserve a health maintenance or-
38 ganization upon any one or more grounds set
out in the insurers super-
39 vision, rehabilitation and liquidation act,
K.S.A. 40-3605 et seq., and
40 amendments thereto, or when in the
commissioner's discretion the con-
41 tinued operation of such health maintenance
organization would be haz-
42 ardous either to the enrollees of such
health maintenance organization or
43 to the people of this state. Each enrollee
of such health maintenance
15
1 organization shall have the same
priority in the event of liquidation or
2 rehabilitation as the law provides to
policy holders of an health
3 organization.
4 (b) For
purpose of determining the priority of distribution of general
5 assets, any claim of any enrollee or
enrollees' beneficiary shall have the
6 same priority as established by
K.S.A. 40-3641, and amendments thereto,
7 for policyholders and beneficiaries
of insureds of insurance companies. If
8 an enrollee is liable to a
nonparticipating provider for services provided
9 pursuant to and covered by the health
maintenance organization, such
10 liability shall have the status of such
enrollee's claim for distribution of
11 general assets. A provider who is obligated
by statute or agreement to
12 hold any enrollee harmless from liability
for services provided pursuant
13 to and covered by a health maintenance
organization shall have a priority
14 of distribution of the general assets
immediately following that of enroll-
15 ees and enrollees' beneficiaries as
described herein, and immediately pre-
16 ceding the priority of distribution
described in subsection (d) of K.S.A.
17 40-3641 and amendments thereto.
18 New Sec.
32. 34. (a) Whenever the
commissioner determines that
19 the financial condition of a health
maintenance organization is such that
20 its continued operation might be hazardous
to its enrollees, creditors or
21 the general public, or that such health
maintenance organization has vi-
22 olated any provisions of this act, the
commissioner, after notice and hear-
23 ing, may order such health maintenance
organization to take action rea-
24 sonably necessary to rectify the condition
or violation. Such action may
25 include, but not limited to one or more of
the following:
26 (1) Reduce the
total amount of present and potential liability for ben-
27 efits by reinsurance or other method
acceptable to the commissioner;
28 (2) reduce the
volume of any new business being accepted;
29 (3) reduce
expenses by specified methods acceptable to the
30 commissioner;
31 (4) suspend or
limit the writing of any new business for a period of
32 time;
33 (5) increase the
health maintenance organization's capital and surplus
34 by contribution; or
35 (6) take such
other steps the commissioner may deem appropriate
36 under the circumstances.
37 (b) The
commissioner may adopt rules and regulations which set uni-
38 form standards and criteria for early
warning that the continued operation
39 of any health maintenance organization
might be hazardous to its enroll-
40 ees, creditors or the general public and
set standards for evaluating the
41 financial condition of any health
maintenance organization.
42 New Sec.
33. (a) When a health maintenance organization in
this
43 state is declared insolvent by a
court of competent jurisdiction, the com-
16
1 missioner may levy an
assessment on any or all other health maintenance
2 organizations doing business
in this state to pay claims for uncovered
3 expenditures for subscribers
or enrollees of such insolvent health main-
4 tenance organization who are
residents of this state and to provide con-
5 tinuation of coverage for
such subscribers or enrollees. The commissioner
6 may not assess in any one
calendar year more than two percent of the
7 aggregate premium written by
each health maintenance organization in
8 this state for the prior
calendar year.
9
(b) The commissioner may use funds obtained under subsection
(a)
10 to pay claims for uncovered
expenditures for subscribers or enrollees for
11 an insolvent health maintenance
organization who are residents of this
12 state, provide for continuation of
coverage for subscribers or enrollees
13 who are residents of this state,
and administrative costs. The commis-
14 sioner by regulation may prescribe
the time, manner and form for filing
15 claims under this section or may
require claims to be allowed by any
16 ancillary receiver or the domestic
liquidator or receiver of such insolvent
17 health maintenance
organization.
18 (c) (1) A
receiver or liquidator of an insolvent health maintenance
or-
19 ganization shall allow a claim in
the proceeding in an amount equal to
20 the administrative costs and any
uncovered expenditures paid under this
21 section.
22 (2) Any
person receiving benefits under this section for
uncovered
23 expenditures shall be deemed to
have assigned to the commissioner such
24 person's rights under the covered
health care plan certificates to the ex-
25 tent of the benefits received. The
commissioner may require an assign-
26 ment to it of such rights by any
payee, enrollee, or beneficiary as a con-
27 dition precedent to the receipt of
any rights or benefits conferred by the
28 section upon that person. The
commissioner shall be subrogated to these
29 rights against the assets of an
insolvent health maintenance organization
30 held by a receiver or liquidator of
another jurisdiction.
31 (3) The
assignment of subrogation rights of the commissioner
and
32 allowed claims under this
subsection have the same priority against the
33 assets of the insolvent health
maintenance organization as those possessed
34 by any person entitled to receive
benefits under this section or for similar
35 expenses in the receivership or
liquidation.
36 (d) When
assessed funds are unused following the completion of
the
37 liquidation of a health maintenance
organization, the commissioner shall
38 distribute to the health
maintenance organizations that have been as-
39 sessed under this section on a pro
rata basis any amounts received under
40 subsection (a) which are not de
minimis.
41 (e) The
aggregate coverage of uncovered expenditures under this
sec-
42 tion shall not exceed $300,000 with
respect to one individual. Any con-
43 tinuation of coverage shall not
continue for more than:
17
1
(1) The lesser of one year after the health maintenance
organization
2 coverage is terminated by
insolvency; or
3
(2) the remaining term of the contract. The commissioner may
pro-
4 vide continuation of coverage
of any reasonable basis, including, but not
5 limited to, continuation of
the health maintenance organization contract
6 or substitution of indemnity
coverage in a form determined by the
7 commissioner.
8
(f) The commissioner may waive an assessment of a health
mainte-
9 nance organization if such
health maintenance organization would be or
10 is impaired or placed in
financially hazardous condition. Any health main-
11 tenance organization which fails,
within 30 days after notice, to pay any
12 assessment made under this section
shall be subject to a civil forfeiture
13 of not more than $1,000 per day and
suspension or revocation of its cer-
14 tificate of authority. Any health
maintenance organization which is af-
15 fected by an action taken by the
commissioner to enforce the provisions
16 of this section shall be given an
opportunity for a hearing in accordance
17 with the provisions of the Kansas
administrative procedures act.
18 (g) The
commissioner may establish a health maintenance
organiza-
19 tion assessment oversight board
which shall be activated only when a
20 health maintenance organization has
been declared insolvent and an as-
21 sessment will be levied against
health maintenance organizations doing
22 business in this state. The
commissioner shall:
23
(1) Request that members of the health maintenance
organization
24 industry submit the names and
qualifications of persons who are inter-
25 ested in serving on the health
maintenance organization assessment over-
26 sight assessment
board;
27
(2) select four members from among the names submitted in
para-
28 graph (1);
29
(3) select one member from the general public, not identified
with
30 the managed care or health
insurance industry;
31
(4) designate two classes of assessment, one for the purpose
of meet-
32 ing administrative and legal costs
and one necessary to carry out the pow-
33 ers and duties of the health
maintenance organization assessment board
34 with regard to the insolvent health
maintenance organization.
35 (h) The
health maintenance organization assessment board shall
be
36 deactivated when the assessment is
complete and the commissioner de-
37 termines that such board has fully
discharged its responsibilities.
38 (i) The
commissioner may adopt rules and regulations necessary
to
39 carry out the provisions of this
section.
40 New Sec.
34. The provisions of this act are supplemental to any
other
41 provisions of the laws of this
state and shall not preclude or limit any
42 other powers or duties of the
commissioner under such laws including,
43 but not limited to, K.S.A.
40-3605 et seq., and
amendments thereto.
18
1 New
Sec. 35. The commissioner may adopt reasonable rules and
reg-
2 ulations necessary for the
implementation of this act.
3 New
Sec. 36. Sections 1 through 30, inclusive, and
amendments
4 thereto shall constitute and
may be cited as the health organization sol-
5 vency act
Sections 31 through 34, and amendments thereto, shall
be
6 part of and supplemental to the
health maintenance organization
7 act cited at K.S.A.
40-3201 et seq., and amendments
thereto.
8 Sec.
37. 35 K.S.A. 1999 Supp.
40-3202 is hereby amended to read
9 as follows: 40-3202. As used in this
act:
10
(a) ``Commissioner'' means the commissioner of insurance of
the
11 state of Kansas.
12 (b) ``Basic
health care services'' means but is not limited to usual
13 physician, hospitalization, laboratory,
x-ray, emergency and preventive
14 services and out-of-area coverage.
15 (c) ``Capitated
basis'' means a fixed per member per month payment
16 or percentage of premium payment wherein
the provider assumes risk
17 for the cost of contracted services without
regard to the type, value or
18 frequency of services provided. For
purposes of this definition, capitated
19 basis includes the cost associated with
operating staff model facilities.
20 (d) ``Carrier'' means a
health maintenance organization, an in-
21 surer, a nonprofit hospital and
medical service corporation, or
22 other entity responsible for the
payment of benefits or provision of
23 services under a group
contract.
24 (d)
(e) ``Certificate of coverage'' means a
statement of the essential
25 features and services of the health
maintenance organization coverage
26 which is given to the subscriber by the
health maintenance organization,
27 medicare provider organization or by the
group contract holder.
28 (e)
(f) ``Copayment'' means an amount an enrollee
must pay in order
29 to receive a specific service which is not
fully prepaid.
30 (f)
(g) ``Deductible'' means an amount an enrollee
is responsible to
31 pay out-of-pocket before the health
maintenance organization begins to
32 pay the costs associated with
treatment.
33 (g)
(h) ``Director'' means the secretary of health
and environment.
34 (h)
(i) ``Disability'' means an injury or illness
that results in a sub-
35 stantial physical or mental limitation in
one or more major life activities
36 such as working or independent activities
of daily living that a person was
37 able to do prior to the injury or
illness.
38 (i)
(j) ``Enrollee'' means a person who has entered
into a contractual
39 arrangement or on whose behalf a
contractual arrangement has been
40 entered into with a health maintenance
organization or the medicare pro-
41 vider organization for health care
services.
42 (j)
(k) ``Grievance'' means a written complaint
submitted in accord-
43 ance with the formal grievance procedure by
or on behalf of the enrollee
19
1 regarding any aspect of the health
maintenance organization or the med-
2 icare provider organization relative
to the enrollee.
3
(k) (l) ``Group contract''
means a contract for health care services
4 which by its terms limits eligibility
to members of a specified group. The
5 group contract may include coverage
for dependents.
6
(l) (m) ``Group contract
holder'' means the person to which a group
7 contract has been issued.
8
(m) (n) ``Health care
services'' means basic health care services and
9 other services, medical equipment and
supplies which may include, but
10 are not limited to, medical, surgical and
dental care; psychological, ob-
11 stetrical, osteopathic, optometric, optic,
podiatric, nursing, occupational
12 therapy services, physical therapy
services, chiropractic services and phar-
13 maceutical services; health education,
preventive medical, rehabilitative
14 and home health services; inpatient and
outpatient hospital services, ex-
15 tended care, nursing home care,
convalescent institutional care, labora-
16 tory and ambulance services, appliances,
drugs, medicines and supplies;
17 and any other care, service or treatment
for the prevention, control or
18 elimination of disease, the correction of
defects or the maintenance of
19 the physical or mental well-being of human
beings.
20
(n) ``Health Carrier'' means a
person that undertakes to provide or
21 arrange for the delivery of
basic health care services to enrollees on a
22 prepaid basis, except for
enrollee responsibility for copayments or deduc-
23 tibles or both. Insurers subject
ot K.S.A. 40-3001 et seq., and amendments
24 thereto, and dental service
corporations as defined in K.S.A. 40-19a01 et
25 seq., and amendments thereto,
shall not be considered health carriers for
26 the purposes of this
act.
27 (o) ``Health
maintenance organization'' means an organization which:
28 (1) Provides or
otherwise makes available to enrollees health care
29 services, including at a minimum those
basic health care services which
30 are determined by the commissioner to be
generally available on an in-
31 sured or prepaid basis in the geographic
area served;
32 (2) is
compensated, except for reasonable copayments, for the pro-
33 vision of basic health care services to
enrollees solely on a predetermined
34 periodic rate basis;
35 (3) provides
physician services directly through physicians who are
36 either employees or partners of such
organization or under arrangements
37 with a physician or any group of physicians
or under arrangements as an
38 independent contractor with a physician or
any group of physicians;
39 (4) is
responsible for the availability, accessibility and quality of
the
40 health care services provided or made
available.
41 (o)
(p) ``Individual contract'' means a contract for health
care services
42 issued to and covering an individual. The
individual contract may include
43 dependents of the subscriber.
20
1
(p) (q) ``Individual practice
association'' means a partnership, corpo-
2 ration, association or other legal
entity which delivers or arranges for the
3 delivery of basic health care
services and which has entered into a services
4 arrangement with persons who are
licensed to practice medicine and
5 surgery, dentistry, chiropractic,
pharmacy, podiatry, optometry or any
6 other health profession and a
majority of whom are licensed to practice
7 medicine and surgery. Such an
arrangement shall provide:
8 (1) That
such persons shall provide their professional services in ac-
9 cordance with a compensation
arrangement established by the entity; and
10 (2) to the extent
feasible for the sharing by such persons of medical
11 and other records, equipment, and
professional, technical and adminis-
12 trative staff.
13 (q)
(r) ``Medical group'' or ``staff model'' means a
partnership, asso-
14 ciation or other group:
15 (1) Which is
composed of health professionals licensed to practice
16 medicine and surgery and of such other
licensed health professionals,
17 including but not limited to dentists,
chiropractors, pharmacists, optom-
18 etrists and podiatrists as are necessary
for the provision of health services
19 for which the group is responsible;
20 (2) a majority of
the members of which are licensed to practice med-
21 icine and surgery; and
22 (3) the members
of which: (A) As their principal professional activity
23 over 50% individually and as a group
responsibility are engaged in the
24 coordinated practice of their profession
for a health maintenance organ-
25 ization; (B) pool their income and
distribute it among themselves accord-
26 ing to a prearranged salary or drawing
account or other plan, or are sal-
27 aried employees of the health maintenance
organization; (C) share
28 medical and other records and substantial
portions of major equipment
29 and of professional, technical and
administrative staff; and (D) establish
30 an arrangement whereby the enrollee's
enrollment status is not known to
31 the member of the group who provides health
services to the enrollee.
32 (r)
(s) ``Medicare provider organization'' means an
organization
33 which:
34 (1) Is a
provider-sponsored organization as defined by Section 4001
35 of the Balanced Budget Act of 1997 (PL
105-33); and
36 (2) provides or
otherwise makes available to enrollees basic health
37 care services pursuant to Section 4001 of
the Balanced Budget Act of
38 1997 (PL 105-33).
39 (s)
(t) ``Net worth'' means the excess of assets over
liabilities as de-
40 termined by the commissioner from the
latest annual report filed pur-
41 suant to K.S.A. 40-3220 and amendments
thereto.
42 (t)
(u) ``Person'' means any natural or artificial person
including but
43 not limited to individuals, partnerships,
associations, trusts or
21
1 corporations.
2
(u) (v) ``Physician'' means a person
licensed to practice medicine and
3 surgery under the healing arts
act.
4
(v) (w) ``Provider'' means any
physician, hospital or other person
5 which is licensed or otherwise
authorized in this state to furnish health
6 care services.
7
(w) (x) ``Uncovered expenditures''
means the costs of health care
8 services that are covered by a health
maintenance organization for which
9 an enrollee would also be liable in
the event of the organization's insol-
10 vency as determined by the commissioner
from the latest annual state-
11 ment filed pursuant to K.S.A. 40-3220 and
amendments thereto and
12 which are not guaranteed, insured or
assumed by any person or organi-
13 zation other than the
health carrier.
14 Sec.
38. 36. K.S.A. 1999 Supp.
40-3209 is hereby amended to read
15 as follows: 40-3209. (a) All forms of group
and individual certificates of
16 coverage and contracts issued by the
organization to enrollees or other
17 marketing documents purporting to describe
the organization's health
18 care services shall contain as a
minimum:
19 (1) A complete
description of the health care services and other ben-
20 efits to which the enrollee is
entitled;
21 (2) The locations
of all facilities, the hours of operation and the serv-
22 ices which are provided in each facility in
the case of individual practice
23 associations or medical staff and group
practices, and, in all other cases,
24 a list of providers by specialty with a
list of addresses and telephone
25 numbers;
26 (3) the financial
responsibilities of the enrollee and the amount of
27 any deductible, copayment or coinsurance
required;
28 (4) all
exclusions and limitations on services or any other benefits to
29 be provided including any deductible or
copayment feature and all re-
30 strictions relating to pre-existing
conditions;
31 (5) all criteria
by which an enrollee may be disenrolled or denied re-
32 enrollment;
33 (6) service
priorities in case of epidemic, or other emergency condi-
34 tions affecting demand for medical
services;
35 (7) in the case
of a health maintenance organization, a provision that
36 an enrollee or a covered dependent of an
enrollee whose coverage under
37 a health maintenance organization group
contract has been terminated
38 for any reason but who remains in the
service area and who has been
39 continuously covered by the health
maintenance organization for at least
40 three months shall be entitled to obtain a
converted contract or have such
41 coverage continued under the group contract
for a period of six months
42 following which such enrollee or dependent
shall be entitled to obtain a
43 converted contract in accordance with the
provisions of this section. The
22
1 converted contract shall provide
coverage at least equal to the conversion
2 coverage options generally available
from insurers or mutual nonprofit
3 hospital and medical service
corporations in the service area at the ap-
4 plicable premium cost. The group
enrollee or enrollees shall be solely
5 responsible for paying the premiums
for the alternative coverage. The
6 frequency of premium payment shall be
the frequency customarily re-
7 quired by the health maintenance
organization, mutual nonprofit hospital
8 and medical service corporation or
insurer for the policy form and plan
9 selected, except that the insurer,
mutual nonprofit hospital and medical
10 service corporation or health maintenance
organization shall require pre-
11 mium payments at least quarterly. The
coverage shall be available to all
12 enrollees of any group without medical
underwriting. The requirement
13 imposed by this subsection shall not apply
to a contract which provides
14 benefits for specific diseases or for
accidental injuries only, nor shall it
15 apply to any employee or member or such
employee's or member's cov-
16 ered dependents when:
17 (A) Such person
was terminated for cause as permitted by the group
18 contract approved by the commissioner;
19 (B) any
discontinued group coverage was replaced by similar group
20 coverage within 31 days; or
21 (C) the employee
or member is or could be covered by any other
22 insured or noninsured arrangement which
provides expense incurred hos-
23 pital, surgical or medical coverage and
benefits for individuals in a group
24 under which the person was not covered
prior to such termination. Writ-
25 ten application for the converted contract
shall be made and the first
26 premium paid not later than 31 days after
termination of the group cov-
27 erage or receipt of notice of conversion
rights from the health mainte-
28 nance organization, whichever is later, and
shall become effective the day
29 following the termination of coverage under
the group contract. The
30 health maintenance organization shall give
the employee or member and
31 such employee's or member's covered
dependents reasonable notice of
32 the right to convert at least once within
30 days of termination of coverage
33 under the group contract. The group
contract and certificates may include
34 provisions necessary to identify or obtain
identification of persons and
35 notification of events that would activate
the notice requirements and
36 conversion rights created by this section
but such requirements and rights
37 shall not be invalidated by failure of
persons other than the employee or
38 member entitled to conversion to comply
with any such provisions. In
39 addition, the converted contract shall be
subject to the provisions con-
40 tained in paragraphs (2), (4), (5), (6),
(7), (8), (9), (13), (14), (15), (16),
41 (17) and (19) of subsection (j) of K.S.A.
40-2209, and amendments
42 thereto;
43 (8)
(A) group contracts shall contain a provision extending
payment
23
1 of such benefits until discharged or
for a period not less than 31 days
2 following the expiration date of the
contract, whichever is earlier, for
3 covered enrollees and dependents
confined in a hospital on the date of
4 termination;
5 (B) a
provision that coverage under any subsequent replacement con-
6 tract that is intended to afford
continuous coverage will commence im-
7 mediately following expiration of any
prior contract with respect to cov-
8 ered services not provided pursuant
to subparagraph (8)(A); and
9 (9) an
individual contract shall provide for a 10-day period for the
10 enrollee to examine and return the contract
and have the premium re-
11 funded, but if services were received by
the enrollee during the 10-day
12 period, and the enrollee returns the
contract to receive a refund of the
13 premium paid, the enrollee must pay for
such services.
14 (b) No health
maintenance organization or medicare provider organ-
15 ization authorized under this act shall
contract with any provider under
16 provisions which require enrollees to
guarantee payment, other than co-
17 payments and deductibles, to such provider
in the event of nonpayment
18 by the health maintenance organization or
medicare provider organiza-
19 tion for any services which have been
performed under contracts between
20 such enrollees and the health maintenance
organization or medicare pro-
21 vider organization. Further, any contract
between a health maintenance
22 organization or medicare provider
organization and a provider shall pro-
23 vide that if the health maintenance
organization or medicare provider
24 organization fails to pay for covered
health care services as set forth in
25 the contract between the health maintenance
organization or medicare
26 provider organization and its enrollee, the
enrollee or covered dependents
27 shall not be liable to any provider for any
amounts owed by the health
28 maintenance organization or medicare
provider organization. If there is
29 no written contract between the health
maintenance organization or med-
30 icare provider organization and the
provider or if the written contract fails
31 to include the above provision, the
enrollee and dependents are not liable
32 to any provider for any amounts owed by the
health maintenance organ-
33 ization or medicare provider organization.
Any action by a provider to
34 collect or attempt to collect from a
subscriber or enrollee any sum owed
35 by the health maintenance organization
to a provider shall be deemed to
36 be an unconscionable act within the
meaning of K.S.A. 50-627 and amend-
37 ments thereto.
38 (c) No group or
individual certificate of coverage or contract form or
39 amendment to an approved certificate of
coverage or contract form shall
40 be issued unless it is filed with the
commissioner. Such contract form or
41 amendment shall become effective within 30
days of such filing unless
42 the commissioner finds that such contract
form or amendment does not
43 comply with the requirements of this
section.
24
1 (d) Every
contract shall include a clear and understandable descrip-
2 tion of the health maintenance
organization's or medicare provider or-
3 ganization's method for resolving
enrollee grievances.
4 (e) The
provisions of subsections (A), (B), (C), (D) and (E) of K.S.A.
5 40-2209 and 40-2215 and amendments
thereto shall apply to all contracts
6 issued under this section, and the
provisions of such sections shall apply
7 to health maintenance
organizations.
8 (f) In
lieu of any of the requirements of subsection (a), the commis-
9 sioner may accept certificates of
coverage issued by a medicare provider
10 organization in conformity with
requirements imposed by any appropriate
11 federal regulatory agency.
12 Sec.
39. 37. K.S.A. 1999 Supp.
40-3220 is hereby amended to read
13 as follows: 40-3220. Every health
maintenance organization and medicare
14 provider organization authorized under this
act shall annually on or before
15 the first day of March, file a verified
report with the commissioner, show-
16 ing its condition on the last day of the
preceding calendar year, on forms
17 prescribed by the commissioner. Such report
shall include:
18 (a) A financial
statement of the organization, including its balance
19 sheet and receipts and disbursements for
the preceding year; and
20 (b) such other
information relating to the performance of health
21 maintenance organizations as shall be
required by the commissioner.
22 Every health maintenance organization
and medicare provider organi-
23 zation authorized under this act shall
be subject to the provisions of K.S.A.
24 40-225 and amendments thereto.
25 Sec.
40. 38. K.S.A. 1999 Supp.
40-3227 is hereby amended to read
26 as follows: 40-3227. (a)
Before Except as provided in
paragraph (e),
27 before issuing any
certificate of authority, the commissioner shall require
28 that the health maintenance organization
have an initial net worth of
29 $1,500,000 and shall thereafter maintain
the minimum net worth required
30 under subsection (b).
31 (b) Except as
provided in subsections (c) and (d) of this section, every
32 health maintenance organization shall
maintain a minimum net worth
33 equal to the greater of:
34
(1) $1,000,000; or
35 (2) two
percent of annual premium revenues as reported on the most
36 recent annual financial statement filed
with the commissioner on the first
37 $150,000,000 of premium and 1% of annual
premium on the premium in
38 excess of $150,000,000; or
39 (3) an amount
equal to the sum of three months uncovered health
40 care expenditures as reported on the
most recent financial statement filed
41 with the commissioner; or
42 (4) an amount
equal to the sum of:
43 (A) Eight
percent of annual health care expenditures except those
paid
25
1 on a capitated basis or managed
hospital payment basis as reported on
2 the most recent financial
statement filed with the commissioner; and
3 (B) four
percent of annual hospital expenditures paid on a managed
4 hospital payment basis as reported
on the most recent financial statement
5 filed with the
commissioner.
6 (c) A
health maintenance organization licensed on or before the
day
7 preceding the effective date of
this section must maintain a minimum net
8 worth of:
9
(1) Twenty-five percent of the amount required by subsection
(b) by
10 December 31, 2000;
11 (2) 50% of the
amount required by subsection (b) by December 31,
12 2001;
13 (3) 75% of the
amount required by subsection (b) by December 31,
14 2002; and
15 (4) 100% of
the amount required by subsection (b) by December 31,
16 2003.
17 (d) In
determining net worth, no debt shall be considered fully
sub-
18 ordinated unless the subordination
clause is in a form acceptable to the
19 commissioner. An interest obligation
relating to the repayment of any
20 subordinated debt shall be similarly
subordinated. The interest expenses
21 relating to the repayment of a fully
subordinated debt shall be considered
22 covered expenses. A debt incurred by a
note meeting the requirements of
23 this section, and otherwise acceptable
to the commissioner, shall not be
24 considered a liability and shall be
recorded as equity.
25 (e) The net worth
requirements of subsections (a) through (d)
26 shall not apply to any health
organization contracting with the Kan-
27 sas department of social and
rehabilitation services to provide serv-
28 ices provided under title XIX and
title XXI of the social security act
29 or any other public benefits,
provided the public benefit contracts
30 represent at least 90% of the premium
volume of the health
31 organization.
32
(e) (f) Unless
otherwise provided below, each health maintenance
33 organization do ing business in this state
shall deposit with any organi-
34 zation or trustee acceptable to the
commissioner through which a cus-
35 todial or controlled account is utilized,
cash, securities or any combination
36 of these or other measures, for the benefit
of all of the enrollees of the
37 health maintenance organization, that are
acceptable in the amount of
38 $150,000 for a medical group or staff model
health maintenance organi-
39 zation or $300,000 for an individual
practice association.
40 (b)
(f) (g) The commissioner
may waive any of the deposit require-
41 ments set forth in subsection
(a) (f) whenever satisfied that: (1)
The or-
42 ganization has sufficient net worth and an
adequate history of generating
43 net income to assure its financial
viability for the next year; or (2) the
26
1 organization's performance and
obligations are guaranteed by an organ-
2 ization with sufficient net worth and
an adequate history of generating
3 net income; or (3) the assets of the
organization or its contracts with
4 insurers, hospital or medical service
corporations, governments or other
5 organizations are reasonably
sufficient to assure the performance of its
6 obligations.
7
(c) When an organization has achieved a net worth not
including land,
8 buildings and equipment of at
least $1,000,000 or has achieved a net
9 worth including land,
buildings and equipment of at least $5,000,000, the
10 annual deposit requirement shall
not apply.
11 (d) If
the organization has a guaranteeing organization which
has
12 been in operation for at least five
years and has a net worth not including
13 land, buildings and equipment of at
least $1,000,000 or which has been
14 in operation for at least 10 years
and has a net worth including land,
15 buildings and equipment of at least
$5,000,000, the annual deposit re-
16 quirement shall not apply. If the
guaranteeing organization is sponsoring
17 more than one organization, the net
worth requirement shall be increased
18 by a multiple equal to the number
of such organizations. This require-
19 ment to maintain a deposit in
excess of the deposit required of an accident
20 and health insurer shall not apply
during any time that the guaranteeing
21 organization maintains for each
organization it sponsors a net worth at
22 least equal to the capital and
surplus requirements set forth in article 11
23 of chapter 40 of the Kansas
Statutes Annotated for an accident and health
24 insurer.
25 (e)
(g) (h) The deposit
requirements imposed by this act shall not
26 apply to health maintenance organizations
not organized under the laws
27 of this state to the extent an amount equal
to or exceeding that required
28 by this act has been deposited with the
commissioner or an organization
29 or trustee acceptable to the department of
insurance of its state of dom-
30 icile for the benefit of Kansas
enrollees.
31 (f)
(h) (i) All income from
deposits shall belong to the depositing
32 organization and shall be paid to it as it
becomes available. A health main-
33 tenance organization that has made a
securities deposit may withdraw
34 that deposit or any part thereof after
making a substitute deposit of cash,
35 securities or any combination of these or
other measures of equal amount
36 and value. Any securities shall be approved
by the commissioner before
37 being substituted.
38
(i) (j) Every health
maintenance organization, when determining li-
39 ability, shall include an amount
estimated in the aggregate to provide for
40 any unearned premium and for the payment
of all claims for health care
41 expenditures that have been incurred,
whether reported or unreported,
42 that are unpaid and for which the
organization is or may be liable, and
43 to provide for the expense of adjustment
or settlement of those claims.
27
1
(g) (j)
(k) The commissioner shall require that each
health mainte-
2 nance organization have a plan for
handling insolvency which allows for
3 continuation of benefits for the
duration of the contract period for which
4 premiums have been paid and
continuation of benefits to members who
5 are confined on the date of
insolvency in an inpatient facility until their
6 discharge or expiration of benefits.
In considering such a plan, the com-
7 missioner may require:
8
(1) Insurance to cover the expenses to be paid for continued
benefits
9 after an insolvency;
10 (2) provisions in
provider contracts that obligate the provider to pro-
11 vide services for the duration of the
period after the health maintenance
12 organization's insolvency for which premium
payment has been made and
13 until the enrollees' discharge from
inpatient facilities;
14 (3) insolvency
reserves;
15 (4) acceptable
letters of credit; or
16 (5) any other
arrangements to assure that benefits are continued as
17 specified in this subsection
(g) (j).
18 Sec.
41. 39. K.S.A. 1999 Supp.
40-3606 is hereby amended to read
19 as follows: 40-3606. This act shall apply
to all insurance companies, fra-
20 ternal benefit societies, health
maintenance organization
organizations,
21 reciprocal insurance exchanges,
mutual nonprofit hospital and medical
22 service corporations, captive insurance
companies, group funded pools
23 except municipal group funded pools
governed by K.S.A. 12-2616
24 through 12-2629 and amendments thereto,
prepaid service plans oper-
25 ating under article 19a of chapter 40 of
the Kansas Statutes Annotated,
26 regardless of whether such entities are
authorized to do business in this
27 state, and such entities which are in the
process of organization.
28 Sec.
42. 40. K.S.A. 1999 Supp.
45-221 is hereby amended to read as
29 follows: 45-221. (a) Except to the extent
disclosure is otherwise required
30 by law, a public agency shall not be
required to disclose:
31 (1) Records the
disclosure of which is specifically prohibited or re-
32 stricted by federal law, state statute or
rule of the Kansas supreme court
33 or the disclosure of which is prohibited or
restricted pursuant to specific
34 authorization of federal law, state statute
or rule of the Kansas supreme
35 court to restrict or prohibit
disclosure.
36 (2) Records which
are privileged under the rules of evidence, unless
37 the holder of the privilege consents to the
disclosure.
38 (3) Medical,
psychiatric, psychological or alcoholism or drug depend-
39 ency treatment records which pertain to
identifiable patients.
40 (4) Personnel
records, performance ratings or individually identifia-
41 ble records pertaining to employees or
applicants for employment, except
42 that this exemption shall not apply to the
names, positions, salaries and
43 lengths of service of officers and
employees of public agencies once they
28
1 are employed as such.
2
(5) Information which would reveal the identity of any
undercover
3 agent or any informant reporting a
specific violation of law.
4 (6) Letters
of reference or recommendation pertaining to the char-
5 acter or qualifications of an
identifiable individual.
6
(7) Library, archive and museum materials contributed by
private
7 persons, to the extent of any
limitations imposed as conditions of the
8 contribution.
9
(8) Information which would reveal the identity of an
individual who
10 lawfully makes a donation to a public
agency, if anonymity of the donor
11 is a condition of the donation.
12 (9) Testing and
examination materials, before the test or examination
13 is given or if it is to be given again, or
records of individual test or ex-
14 amination scores, other than records which
show only passage or failure
15 and not specific scores.
16 (10) Criminal
investigation records, except that the district court, in
17 an action brought pursuant to K.S.A.
45-222, and amendments thereto,
18 may order disclosure of such records,
subject to such conditions as the
19 court may impose, if the court finds that
disclosure:
20 (A) Is in the
public interest;
21 (B) would not
interfere with any prospective law enforcement action;
22 (C) would not
reveal the identity of any confidential source or un-
23 dercover agent;
24 (D) would not
reveal confidential investigative techniques or proce-
25 dures not known to the general public;
26 (E) would not
endanger the life or physical safety of any person; and
27 (F) would not
reveal the name, address, phone number or any other
28 information which specifically and
individually identifies the victim of any
29 sexual offense in article 35 of chapter 21
of the Kansas Statutes Anno-
30 tated, and amendments thereto.
31 (11) Records of
agencies involved in administrative adjudication or
32 civil litigation, compiled in the process
of detecting or investigating vio-
33 lations of civil law or administrative
rules and regulations, if disclosure
34 would interfere with a prospective
administrative adjudication or civil
35 litigation or reveal the identity of a
confidential source or undercover
36 agent.
37 (12) Records of
emergency or security information or procedures of
38 a public agency, or plans, drawings,
specifications or related information
39 for any building or facility which is used
for purposes requiring security
40 measures in or around the building or
facility or which is used for the
41 generation or transmission of power, water,
fuels or communications, if
42 disclosure would jeopardize security of the
public agency, building or
43 facility.
29
1 (13) The
contents of appraisals or engineering or feasibility estimates
2 or evaluations made by or for a
public agency relative to the acquisition
3 of property, prior to the award of
formal contracts therefor.
4
(14) Correspondence between a public agency and a private
individ-
5 ual, other than correspondence which
is intended to give notice of an
6 action, policy or determination
relating to any regulatory, supervisory or
7 enforcement responsibility of the
public agency or which is widely dis-
8 tributed to the public by a public
agency and is not specifically in response
9 to communications from such a private
individual.
10 (15) Records
pertaining to employer-employee negotiations, if dis-
11 closure would reveal information discussed
in a lawful executive session
12 under K.S.A. 75-4319, and amendments
thereto.
13 (16) Software
programs for electronic data processing and documen-
14 tation thereof, but each public agency
shall maintain a register, open to
15 the public, that describes:
16 (A) The
information which the agency maintains on computer facil-
17 ities; and
18 (B) the form in
which the information can be made available using
19 existing computer programs.
20
(17) Applications, financial statements and other information
sub-
21 mitted in connection with applications for
student financial assistance
22 where financial need is a consideration for
the award.
23 (18) Plans,
designs, drawings or specifications which are prepared by
24 a person other than an employee of a public
agency or records which are
25 the property of a private person.
26 (19) Well
samples, logs or surveys which the state corporation com-
27 mission requires to be filed by persons who
have drilled or caused to be
28 drilled, or are drilling or causing to be
drilled, holes for the purpose of
29 discovery or production of oil or gas, to
the extent that disclosure is limited
30 by rules and regulations of the state
corporation commission.
31 (20) Notes,
preliminary drafts, research data in the process of anal-
32 ysis, unfunded grant proposals, memoranda,
recommendations or other
33 records in which opinions are expressed or
policies or actions are pro-
34 posed, except that this exemption shall not
apply when such records are
35 publicly cited or identified in an open
meeting or in an agenda of an open
36 meeting.
37 (21) Records of a
public agency having legislative powers, which re-
38 cords pertain to proposed legislation or
amendments to proposed legis-
39 lation, except that this exemption shall
not apply when such records are:
40 (A) Publicly
cited or identified in an open meeting or in an agenda
41 of an open meeting; or
42 (B) distributed
to a majority of a quorum of any body which has au-
43 thority to take action or make
recommendations to the public agency with
30
1 regard to the matters to which such
records pertain.
2
(22) Records of a public agency having legislative powers,
which re-
3 cords pertain to research prepared
for one or more members of such
4 agency, except that this exemption
shall not apply when such records are:
5
(A) Publicly cited or identified in an open meeting or in an
agenda
6 of an open meeting; or
7
(B) distributed to a majority of a quorum of any body which
has au-
8 thority to take action or make
recommendations to the public agency with
9 regard to the matters to which such
records pertain.
10 (23) Library
patron and circulation records which pertain to identi-
11 fiable individuals.
12 (24) Records
which are compiled for census or research purposes and
13 which pertain to identifiable
individuals.
14 (25) Records
which represent and constitute the work product of an
15 attorney.
16 (26) Records of a
utility or other public service pertaining to individ-
17 ually identifiable residential customers of
the utility or service, except that
18 information concerning billings for
specific individual customers named
19 by the requester shall be subject to
disclosure as provided by this act.
20
(27) Specifications for competitive bidding, until the
specifications
21 are officially approved by the public
agency.
22 (28) Sealed bids
and related documents, until a bid is accepted or all
23 bids rejected.
24 (29) Correctional
records pertaining to an identifiable inmate or re-
25 lease, except that:
26 (A) The name;
photograph and other identifying information; sen-
27 tence data; parole eligibility date;
custody or supervision level; disciplinary
28 record; supervision violations; conditions
of supervision, excluding
29 requirements pertaining to mental health or
substance abuse counseling;
30 location of facility where incarcerated or
location of parole office main-
31 taining supervision and address of a
releasee whose crime was committed
32 after the effective date of this act shall
be subject to disclosure to any
33 person other than another inmate or
releasee, except that the disclosure
34 of the location of an inmate transferred to
another state pursuant to the
35 interstate corrections compact shall be at
the discretion of the secretary
36 of corrections;
37 (B) the ombudsman
of corrections, the attorney general, law enforce-
38 ment agencies, counsel for the inmate to
whom the record pertains and
39 any county or district attorney shall have
access to correctional records to
40 the extent otherwise permitted by law;
41 (C) the
information provided to the law enforcement agency pursu-
42 ant to the sex offender registration act,
K.S.A. 22-4901, et seq., and
43 amendments thereto, shall be subject to
disclosure to any person, except
31
1 that the name, address, telephone
number or any other information which
2 specifically and individually
identifies the victim of any offender required
3 to register as provided by the Kansas
offender registration act, K.S.A. 22-
4 4901 et seq. and amendments
thereto, shall not be disclosed; and
5 (D) records
of the department of corrections regarding the financial
6 assets of an offender in the custody
of the secretary of corrections shall
7 be subject to disclosure to the
victim, or such victim's family, of the crime
8 for which the inmate is in custody as
set forth in an order of restitution
9 by the sentencing court.
10 (30) Public
records containing information of a personal nature
11 where the public disclosure thereof would
constitute a clearly unwar-
12 ranted invasion of personal privacy.
13 (31) Public
records pertaining to prospective location of a business
14 or industry where no previous public
disclosure has been made of the
15 business' or industry's interest in
locating in, relocating within or expand-
16 ing within the state. This exception shall
not include those records per-
17 taining to application of agencies for
permits or licenses necessary to do
18 business or to expand business operations
within this state, except as
19 otherwise provided by law.
20 (32) The bidder's
list of contractors who have requested bid proposals
21 for construction projects from any public
agency, until a bid is accepted
22 or all bids rejected.
23 (33) Engineering
and architectural estimates made by or for any pub-
24 lic agency relative to public
improvements.
25 (34) Financial
information submitted by contractors in qualification
26 statements to any public agency.
27 (35) Records
involved in the obtaining and processing of intellectual
28 property rights that are expected to be,
wholly or partially vested in or
29 owned by a state educational institution,
as defined in K.S.A. 76-711, and
30 amendments thereto, or an assignee of the
institution organized and ex-
31 isting for the benefit of the
institution.
32 (36) Any report
or record which is made pursuant to K.S.A. 65-4922,
33 65-4923 or 65-4924, and amendments thereto,
and which is privileged
34 pursuant to K.S.A. 65-4915 or 65-4925, and
amendments thereto.
35 (37) Information
which would reveal the precise location of an ar-
36 cheological site.
37 (38) Any
financial data or traffic information from a railroad company,
38 to a public agency, concerning the sale,
lease or rehabilitation of the
39 railroad's property in Kansas.
40 (39) Risk-based
capital reports, risk-based capital plans and corrective
41 orders including the working papers and the
results of any analysis filed
42 with the commissioner of insurance in
accordance with K.S.A. 1999 Supp.
43 40-2c20 and section 20, and
amendments thereto.
32
1
(40) Memoranda and related materials required to be used to
support
2 the annual actuarial opinions
submitted pursuant to subsection (b) of
3 K.S.A. 40-409, and amendments
thereto.
4
(41) Disclosure reports filed with the commissioner of
insurance un-
5 der subsection (a) of K.S.A. 1999
Supp. 40-2,156, and amendments
6 thereto.
7 (42) All
financial analysis ratios and examination synopses concerning
8 insurance companies that are
submitted to the commissioner by the na-
9 tional association of insurance
commissioners' insurance regulatory infor-
10 mation system.
11 (43) Any records
the disclosure of which is restricted or prohibited
12 by a tribal-state gaming compact.
13 (44) Market
research, market plans, business plans and the terms and
14 conditions of managed care or other third
party contracts, developed or
15 entered into by the university of Kansas
medical center in the operation
16 and management of the university hospital
which the chancellor of the
17 university of Kansas or the chancellor's
designee determines would give
18 an unfair advantage to competitors of the
university of Kansas medical
19 center.
20 (b) Except to the
extent disclosure is otherwise required by law or as
21 appropriate during the course of an
administrative proceeding or on ap-
22 peal from agency action, a public agency or
officer shall not disclose fi-
23 nancial information of a taxpayer which may
be required or requested by
24 a county appraiser or the director of
property valuation to assist in the
25 determination of the value of the
taxpayer's property for ad valorem tax-
26 ation purposes; or any financial
information of a personal nature required
27 or requested by a public agency or officer,
including a name, job descrip-
28 tion or title revealing the salary or other
compensation of officers, em-
29 ployees or applicants for employment with a
firm, corporation or agency,
30 except a public agency. Nothing contained
herein shall be construed to
31 prohibit the publication of statistics, so
classified as to prevent identifi-
32 cation of particular reports or returns and
the items thereof.
33 (c) As used in
this section, the term ``cited or identified'' shall not
34 include a request to an employee of a
public agency that a document be
35 prepared.
36 (d) If a public
record contains material which is not subject to dis-
37 closure pursuant to this act, the public
agency shall separate or delete
38 such material and make available to the
requester that material in the
39 public record which is subject to
disclosure pursuant to this act. If a public
40 record is not subject to disclosure because
it pertains to an identifiable
41 individual, the public agency shall delete
the identifying portions of the
42 record and make available to the requester
any remaining portions which
43 are subject to disclosure pursuant to this
act, unless the request is for a
33
1 record pertaining to a specific
individual or to such a limited group of
2 individuals that the individuals'
identities are reasonably ascertainable, the
3 public agency shall not be required
to disclose those portions of the record
4 which pertain to such individual or
individuals.
5 (e) The
provisions of this section shall not be construed to exempt
6 from public disclosure statistical
information not descriptive of any iden-
7 tifiable person.
8
(f) Notwithstanding the provisions of subsection (a), any
public rec-
9 ord which has been in existence more
than 70 years shall be open for
10 inspection by any person unless disclosure
of the record is specifically
11 prohibited or restricted by federal law,
state statute or rule of the Kansas
12 supreme court or by a policy adopted
pursuant to K.S.A. 72-6214, and
13 amendments thereto.
14 Sec. 43.
41. K.S.A. 1999 Supp. 40-3202, 40-3209, 40-3220,
40-3227,
15 40-3606 and 45-221 are hereby repealed.
16 Sec. 44.
42. This act shall take effect and be in force
from and after
17 its publication in the statute book.