AZ Circular Letter 1990-05A: Arizona House Bill 2181 (Chapter 394)

STATE OF ARIZONA

DEPARTMENT OF INSURANCE

JANE DEE HULL

2910 NORTH 44th STREET, SUITE 210

CHARLES R. COHEN

Governor

PHOENIX, ARIZONA 85018-7256

Director of Insurance

602/912-8456 (phone) 602/912-8452 (fax)

Former Director Susan Gallinger issued the following Circular Letter on September 27, 1990:

CIRCULAR LETTER 90-5A

TO:

ALL INSURANCE TRADE ASSOCIATIONS, INSURANCE MEDIA

PUBLICATIONS AND INTERESTED PERSONS

FROM:

SUSAN GALLINGER, DIRECTOR OF INSURANCE

DATE:

SEPTEMBER 27, 1990

RE:

ARIZONA HOUSE BILL 2181 (Chapter 394)

On September 27, 1990, House Bill 2181 will become effective. A number of questions

regarding interpretation of this bill have been raised by the insurance industry, health

care professionals, and consumers. The following guidelines are designed to address

the issues most often raised by those parties:

1.

Under H.B. 2181 insurance coverage must relate to the claimant’s “condition”

and practitioner reimbursement must also relate to reasonable and necessary

services to treat the condition rather than provide coverage for the procedures.

2.

Any preferred provider arrangement (PPO’s) subject to the provisions of H.B.

2181 must be structured so as not to discriminate against any type of practitioner

addressed by the bill. A non-discriminatory limit to the number of participating

practitioners is permitted.

3.

Similarly, all deductibles, coinsurance, cost containment measures and quality

assurance measures must be structured so as not to discriminate against any

type of practitioner addressed by the bill. A non-discriminatory limit to the

number of participating practitioners is permitted.

4.

H.B. 2181 does not require expansion of coverage to include conditions not

previously covered under the policy.

Similarly, all deductibles, coinsurance, cost containment measures and quality

assurance measures must be structured so as not to discriminate against any

type of practitioner addressed by the bill. A non-discriminatory limit to the

number of participating practitioners is permitted.

4.

H.B. 2181 does not require expansion of coverage to include conditions not

previously covered under the policy.

Circular Letter 90-5A

September 27, 1990

Page 2

5.

H.B. 2181 applies to existing health insurance policies already in force – not just

new policies. 1

6.

H.B. 2181 applies to all subscriber contracts underwritten by Hospital Services

Corporations.

7.

H.B. 2181 does not apply to group health insurance policies underwritten by

insurers.

8.

H.B. 2181 does not apply to health care service organizations.

1 Except to the extent that expansion of benefits and/or benefit reimbursement would be

required, in which case such expansion will be required only upon renewal.