CHAPTER 182 SENATE BILL No. 459 An  Act concerning health related discount cards; amending K.S.A. 2001 Supp. 50-1,100,
50-1,101, 50-1,103, 50-1,105 and 75-438 and repealing the existing sections; also re-
pealing K.S.A. 2001 Supp. 50-1,102.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 2001 Supp. 50-1,100 is hereby amended to read as
follows: 50-1,100. As used in this act:

      (a) ``Discount card'' means a card or any other purchasing mechanism
or device, which is not insurance, that purports to offer discounts or access
to discounts in health-related purchases from health care providers.

      (b) ``Health care provider'' means any person licensed to practice any
branch of the healing arts by the state board of healing arts, any person
who holds a temporary permit to practice any branch of the healing arts
issued by the state board of healing arts, a medical care facility licensed
by the department of health and environment, a podiatrist licensed by
the state board of healing arts, an optometrist licensed by the board of
examiners in optometry, a pharmacist licensed by the state board of phar-
macy, a pharmacy registered with the state board of pharmacy, a dentist
licensed by the Kansas dental board, a respiratory therapist, a professional
corporation organized pursuant to the professional corporation law of
Kansas by persons who are authorized by such law to form such a cor-
poration and who are health care providers as defined by this subsection,
a Kansas limited liability company organized for the purpose of rendering
professional services by its members who are health care providers as
defined by this subsection and who are legally authorized to render the
professional services for which the limited liability company is organized,
a partnership of persons who are health care providers under this sub-
section, a Kansas not-for-profit corporation organized for the purpose of
rendering professional services by persons who are health care providers
as defined by this subsection.

      (c) ``Person'' means an individual, corporation, business trust, estate,
trust, partnership, association, joint venture, limited liability company,
government, government subdivision or agency or any other legal, gov-
ernmental or commercial entity.

      (c) ``Network of health care providers'' means two or more separate
health care providers who have specifically authorized the network to
enter into a discount card program and who are contractually obligated
to honor the discount card contract entered into by the network of health
care providers.

      (d) ``Date of transaction'' means the date payment is processed by the
supplier or the date the consumer is able to use the discount card, which-
ever occurs earlier.

      (e) ``Service area'' means the area defined by the consumer's zip code.
Service area shall also include all of the area located outside the area
defined by the consumer's zip code but within 60 miles thereof.

      Sec.  2. K.S.A. 2001 Supp. 50-1,101 is hereby amended to read as
follows: 50-1,101. It shall be unlawful for any person to sell, market,
promote, advertise or otherwise distribute any discount card where:

      (a) The discount card does not expressly state in bold and prominent
type that such discount is not insurance;

      (b) any discount offered by such discount card is not specifically au-
thorized by a separate contract with each health care provider listed in
conjunction with the discount card; or

      (c) the discount or range of discounts offered by such discount card
or the access to any range of discounts offered by such discount card are
misleading, deceptive or fraudulent, regardless of the literal wording used
on such discount card.

      (a) Any supplier who markets, promotes, advertises or otherwise dis-
tributes any discount card in Kansas shall not make misleading, deceptive
or fraudulent representations regarding the discount or range of discounts
offered by such discount card or the access to any range of discounts
offered by such discount card.

      (b) Any supplier who sells any discount card in Kansas shall:

      (1) State in bold and prominent type that such discount is not insur-
ance on all advertisements and on all discount cards;

      (2) have a separate contract with each health care provider or net-
work of health care providers listed in conjunction with the discount card;

      (3) not make misleading, deceptive or fraudulent representations re-
garding the discount or range of discounts offered by such discount card
or the access to any range of discounts offered by such discount card; and

      (4) (A) Except as provided in subparagraph (B), provide each pro-
spective customer before purchase or at the time of the confirmation re-
quired by K.S.A. 50-672, and amendments thereto, a written list for each
type of service offered in conjunction with the discount card containing
the name, address, and phone number of the closest 25 health care pro-
viders in the prospective customer's service area that are contractually
bound to honor the discount card. The written list of providers may be
provided electronically if requested in that format by the prospective cus-
tomer.

      (B) Unless the supplier has complied with subparagraph (A), the sup-
plier of the discount card must provide the customer a 30-day right to
cancel and shall mail the written list required by subparagraph (A) of
paragraph 4 within seven calendar days of the date of the transaction.

      (5) Make available to each customer on an ongoing basis thereafter
through a toll-free telephone number, the internet, or in writing upon
request, the name, address and phone number of all health care providers
in such customer's service area who are contractually bound to honor the
discount card.

      (6) Maintain a surety bond in the amount of $50,000 issued by a
surety company authorized to do business in this state, or establish and
maintain a surety account in the amount of $50,000 at a federally insured
bank, savings and loan association or federal savings bank located in this
state. Each surety bond and surety account shall be subject to the follow-
ing:

      (A) A copy of the bond or a statement identifying the depository,
trustee and account number of the surety account, and thereafter proof
of annual renewal of the bond or maintenance of the surety account, shall
be filed with the secretary of state. Each such filing shall be accompanied
by a filing fee of no more than $250 to cover the cost of filing and ad-
ministration. Fees received under this act by the secretary of state shall
be deposited in the state treasury to the credit of the information and copy
service fee fund.

      (B) A surety account shall be maintained until two years after the
date that the discount card company ceases operations in the state. Funds
from any surety account shall not be released to the discount card com-
pany without the specific consent of the attorney general.

      (C) No surety on a discount card company bond shall cancel such
bond without giving written notice thereof to the secretary of state. When-
ever the secretary of state receives notice of a surety's intention to cancel
a discount card company's bond, the secretary of state shall notify the
affected discount card company that, unless such discount card company
files another $50,000 surety bond with the secretary of state or establishes
a $50,000 surety account on or before the cancellation date of such dis-
count card company's surety bond, then such discount card company will
no longer be authorized to do business in this state.

      (D) The bond or surety account shall be in favor of any person and
the attorney general for the benefit of any person who is damaged by any
violation of this act, including any violation by the supplier or by any
other person which markets, promotes, advertises or otherwise distributes
a discount card on behalf of the supplier. The bond shall cover any vio-
lation occurring during the time period during which the bond is in effect.

      (E) Any person claiming against the bond or surety account for a
violation of this act may maintain an action at law against the discount
card company and against the surety or trustee of the surety account. The
aggregate liability of the surety or trustee of the surety account to all
persons damaged by violations of this act may not exceed the amount of
the surety bond or account.

      Sec.  3. K.S.A. 2001 Supp. 50-1,103 is hereby amended to read as
follows: 50-1,103. Any person supplier who sells, markets, promotes,
advertises or otherwise distributes any discount card in Kansas shall des-
ignate a resident agent, who is a resident of Kansas, for service of process
and such resident agent shall register with the secretary of state pursuant
to K.S.A. 60-306 and amendments thereto.

      Sec.  4. K.S.A. 2001 Supp. 50-1,105 is hereby amended to read as
follows: 50-1,105. (a) K.S.A. 2001 Supp. 50-1,100 through 50-1,105
shall be known as the Kansas discount card deceptive practice act.

      (b) This act shall be part of and supplemental to the Kansas consumer
protection act.

      (c) Any violation of this act shall constitute an unconscionable act and
practice under the Kansas consumer protection act and amendments
thereto and shall be subject to any and all of the remedies and enforcement
provisions of the Kansas consumer protection act.

      (d) Any person alleging a violation of this act may bring a private
action to seek relief pursuant to K.S.A. 50-634, 50-636 and this act, and
amendments thereto, and such person shall be considered a consumer
pursuant to K.S.A. 50-624, and amendments thereto, for the purposes of
such private action.

      (e) The requirements and remedies of this act are in addition to and
not in substitution for any other requirements and remedies provided by
law.

      Sec.  5. K.S.A. 2001 Supp. 75-438 is hereby amended to read as fol-
lows: 75-438. (a) There is hereby created the information and copy service
fee fund in the state treasury. The secretary of state shall remit all moneys
received from fees and charges under K.S.A. 75-409 or 75-437 or K.S.A.
2001 Supp. 50-1,101, and amendments thereto, to the state treasurer in
accordance with the provisions of K.S.A. 75-4215, and amendments
thereto. Upon receipt of each such remittance, the state treasurer shall
deposit the entire amount in the state treasury to the credit of the infor-
mation and copy service fee fund.

      (b) All expenditures from the information and copy service fee fund
shall be in accordance with appropriations acts upon warrants of the di-
rector of accounts and reports issued pursuant to vouchers approved by
the secretary of state or by a person or persons designated by the secre-
tary.

      (c) On the effective date of this act, the secretary of state shall certify
to the director of accounts and reports the amount of money in the con-
version of materials and equipment fund of the secretary of state which
moneys are from fees charged for copies of public documents under
K.S.A. 75-409, and amendments thereto. Upon receipt of such certifi-
cation, the director of accounts and reports shall transfer the amount of
money certified from the conversion of materials and equipment fund to
the information and copy service fee fund. All liabilities of the conversion
of materials and equipment fund of the secretary of state which are at-
tributable to the service of providing copies of public documents under
K.S.A. 75-409, and amendments thereto, are hereby transferred to and
imposed on the information and copy service fee fund.

 Sec.  6. K.S.A. 2001 Supp. 50-1,100, 50-1,101, 50-1,102, 50-1,103,
50-1,105 and 75-438 are hereby repealed.

 Sec.  7. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 29, 2002.
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