ORS Chapter 750

Chapter 750 — HealthCare Service Contractors; Multiple Employer Welfare Arrangements; Legal ExpenseOrganizations

2009 EDITION

HEALTHCARE CONTRACTOR; LEGAL EXPENSE ORGANIZATION

INSURANCE

HEALTHCARE SERVICE CONTRACTORS

750.003 Purpose

750.005 Definitions

750.015 Managementto include representatives of public

750.025 Restrictingdistribution of income; representation as health maintenance organization

750.035 Regulationof hospital care associations under prior law; exceptions

750.045 Requiredcapitalization; bond, security or letter of credit; exemptions; rules

750.055 Otherprovisions applicable to health care service contractors; rules

750.059 Exemptionof group practice maintenance organizations from reimbursement requirement forservices provided by state hospital or state-approved program

750.065 Paymentor reimbursement for services within scope of practice of optometrists

INSOLVENCYOF HEALTH CARE SERVICE CONTRACTOR

750.085 Offerof replacement coverage upon order of liquidation; procedure

750.095 Requirementsof contract between provider and subscriber; content

MULTIPLEEMPLOYER WELFARE ARRANGEMENTS

750.301 Definitionsfor ORS 750.301 to 750.341

750.303 Conditionsfor use of multiple employer welfare arrangement; permitted coverage

750.305 Applicationfor certificate

750.307 Requirementsfor association or group

750.309 Requirementsfor trust

750.311 Multipleemployer welfare arrangements established in another state

750.313 Issuanceor refusal of certificate of multiple employer welfare arrangement

750.315 Maintenanceof reserves; actuarial opinion; rules

750.317 Boardof trustees

750.318 Officersand persons appointed to act on behalf of board; bond

750.319 Salaries;other compensation

750.321 Assessment;maintenance of capital and surplus

750.323 Noticeof coverage under plan

750.325 Filingsby trust

750.327 Examinations

750.329 Taxation

750.331 Prohibitedactivities for trustee or officer

750.333 Applicableprovisions of Insurance Code

750.335 Delinquencyproceedings

750.337 Exclusionfrom membership in guaranty funds, joint underwriting associations and otherpools

750.339 Liabilityof excess loss insurer

750.341 Requirementfor multiple employer welfare arrangement to become traditional insurer

LEGALEXPENSE ORGANIZATIONS

750.505 Definitionsfor ORS 750.505 to 750.715

750.515 Certificateof registration required

750.525 Inapplicabilityof ORS 750.505 to 750.715 to certain legal services

750.535 Registrationrequirements

750.545 Application;fee

750.555 Issuanceof certificate of registration

750.565 Durationof certificate; renewal; fee

750.575 Groundsfor suspension or revocation of certificate or refusal to issue or renewcertificate

750.585 Writtenprovider agreement with providing attorney

750.595 Membershipagreement

750.605 Unfair,discriminatory or misleading provisions in agreements prohibited; record oftransactions

750.615 Depositto reimburse members for unearned premiums required

750.625 Payingproviding attorney contingent on claims experience prohibited

750.635 Registeredagent and registered office in state required

750.645 Annualreport; content; names of sales and marketing representatives to be submitted

750.655 Filingschedule of legal service rates required

750.675 Filingof provider and membership agreement with director

750.685 Indemnificationinsurance or bond required

750.695 ORS750.505 to 750.715 not to affect regulation of practice of law; plan notsubject to Insurance Code

750.705 Applicationof Insurance Code

750.715 Rules

HEALTHCARE SERVICE CONTRACTORS

750.003Purpose.The purpose of this section and ORS 750.005, 750.025 and 750.045 is toencourage and guarantee the development of health care service contractors bylicensing and regulating their operation to insure that they provide highquality health care services through state licensed organizations meetingreasonable standards as to administration, services and financial soundness. [1985c.747 §64]

750.005Definitions.As used in ORS 750.005 to 750.095:

(1)“Claims” means any amount incurred by the insurer covering contracted benefits.

(2)“Complementary health services” means the following health care services:

(a)Chiropractic as defined in ORS 684.010;

(b)Naturopathic medicine as defined in ORS 685.010;

(c)Massage therapy as defined in ORS 687.011; or

(d)Acupuncture as defined in ORS 677.757.

(3)“Doctor” means any person lawfully licensed or authorized by statute to renderany health care services.

(4)“Health care service contractor” means:

(a)Any corporation that is sponsored by or otherwise intimately connected with agroup of doctors licensed by this state, or by a group of hospitals licensed bythis state, or both, under contracts with groups of doctors or hospitals thatinclude conditions holding the subscriber harmless in the event of nonpaymentby the health care service contract as provided in ORS 750.095, and thataccepts prepayment for health care services; or

(b)Any person referred to in ORS 750.035.

(5)“Health care services” means the furnishing of medicine, medical or surgicaltreatment, nursing, hospital service, dental service, optometrical service,complementary health services or any or all of the enumerated services or anyother necessary services of like character, whether or not contingent uponsickness or personal injury, as well as the furnishing to any person of any andall other services and goods for the purpose of preventing, alleviating, curingor healing human illness, physical disability or injury.

(6)“Health maintenance organization” means any health care service contractoroperated on a for-profit or not for-profit basis which:

(a)Qualifies under Title XIII of the Public Health Service Act; or

(b)(A)Provides or otherwise makes available to enrolled participants health careservices, including at least the following basic health care services:

(i)Usual physician services;

(ii)Hospitalization;

(iii)Laboratory;

(iv)X-ray;

(v)Emergency and preventive services; and

(vi)Out-of-area coverage;

(B)Is compensated, except for copayments, for the provision of basic health careservices listed in subparagraph (A) of this paragraph to enrolled participantson a predetermined periodic rate basis;

(C)Provides physicians’ services primarily directly through physicians who areeither employees or partners of such organization, or through arrangements withindividual physicians or one or more groups of physicians organized on a grouppractice or individual practice basis; and

(D)Employs the terms “health maintenance organization” or “HMO” in its name,contracts, literature or advertising media on or before July 13, 1985. [Formerly742.010; 1973 c.515 §5; 1979 c.799 §1; 1985 c.747 §65; 1989 c.783 §4; 1991c.958 §3; 2003 c.33 §1]

750.010 [Amended by1957 c.301 §1; 1961 c.116 §1; 1967 c.359 §548; renumbered 744.305]

750.015Management to include representatives of public. (1) Except asprovided in subsection (2) of this section, not less than one-third of thegroup of persons vested with the management of the affairs of a health careservice contractor, as defined in ORS 750.005 (4)(a), shall be representativesof the public who are not practicing doctors or employees or trustees of aparticipant hospital.

(2)(a)Notwithstanding subsection (1) of this section, the group of persons vestedwith the management of the affairs of a nonprofit private organizationdescribed in this subsection shall have at least two representatives of thepublic who are not practicing doctors, as defined in ORS 750.005, or employeesor trustees of a participant hospital.

(b)This subsection applies to a nonprofit private organization that is a healthmaintenance organization, as defined in ORS 442.015, that is controlled by asingle nonprofit hospital or by a group of nonprofit hospitals under commonownership and that operates in a county with a population of 200,000 or more. [Formerly742.015; 1983 c.804 §1; 2003 c.33 §6]

750.020 [Amended by1961 c.116 §2; 1967 c.359 §549; renumbered 744.315]

750.025Restricting distribution of income; representation as health maintenanceorganization.(1) A health care service contractor which is a not-for-profit corporation,shall not distribute, upon liquidation or otherwise, any part of its income toits members, directors, trustees or officers except for the reasonable value ofservices rendered such contractor.

(2)An organization that does not meet the definition of health maintenanceorganization in ORS 750.005 shall not hold itself out to the public to be ahealth maintenance organization. [Formerly 742.025; 1985 c.747 §66]

750.030 [Repealed by1967 c.359 §704]

750.035Regulation of hospital care associations under prior law; exceptions. (1)Notwithstanding any other provision of law, except as provided in subsection(2) of this section, any persons doing a hospital association business, asdefined in ORS 742.010 (1959 Replacement Part) in compliance with ORS chapter742 (1959 Replacement Part) on August 12, 1965, may continue such business incompliance with ORS chapter 742 (1959 Replacement Part).

(2)Every person doing a hospital association business, as defined in ORS 742.010(1959 Replacement Part), on August 12, 1965, shall comply with the provisionsof ORS 750.045, 750.055, 750.085 and 750.095. [Formerly 742.035; 1989 c.783 §5]

750.040 [Amended by1967 c.359 §552; renumbered 744.345]

750.045Required capitalization; bond, security or letter of credit; exemptions; rules. (1) A healthcare service contractor that is a for-profit or not-for-profit corporationshall possess and thereafter maintain capital or surplus, or any combinationthereof, of not less than $2.5 million.

(2)A health care service contractor that is a for-profit or not-for-profitcorporation shall file a surety bond or such other bond or securities in thesum of $250,000 as are authorized by the Insurance Code as a guarantee of thedue execution of the policies to be entered into by such contractor inaccordance with ORS 750.005 to 750.095. In lieu of such bond or securities, ahealth care service contractor may file an irrevocable letter of credit issuedby an insured institution as defined in ORS 706.008 in the sum of $250,000.This subsection does not apply to a health care service contractor that has atleast 75 percent of its assets invested in health care service facilitiespursuant to ORS 733.700.

(3)Subsections (1) and (2) of this section do not apply to a health care servicecontractor furnishing only complementary health services, dental service oroptometrical service operated on a for-profit or not-for-profit basis if:

(a)The services referred to in this subsection maintain capital or surplus, or anycombination thereof, of not less than $1 million.

(b)The services referred to in this subsection file a surety bond or other suchbond or securities in the sum of $50,000 as are authorized by the InsuranceCode as a guarantee of the due execution of the policies to be entered into bysuch contractor in accordance with ORS 750.005 to 750.095.

(4)A health care service contractor that is a for-profit or not-for-profitcorporation applying for its original certificate of authority in this stateshall possess, when first so authorized, additional capital or surplus, or anycombination thereof, of not less than $500,000.

(5)For the protection of the public, the Director of the Department of Consumerand Business Services may require a health care service contractor to possessand maintain capital or surplus, or any combination thereof, in excess of theamount otherwise required under this section owing to the type, volume andnature of insurance business transacted by the health care service contractor,if the director determines that the greater amount is necessary for maintainingthe health care service contractor’s solvency according to standards establishedby rule. In developing such standards, the director shall consider modelstandards adopted by the National Association of Insurance Commissioners or itssuccessor organization. For the purpose of determining the reasonableness andadequacy of a health care service contractor’s capital and surplus, thedirector must consider at least the following factors, as applicable:

(a)The size of the health care service contractor, as measured by its assets,capital and surplus, reserves, premium writings, insurance in force and otherappropriate criteria.

(b)The number of lives insured.

(c)The extent of the geographical dispersion of the lives insured by the healthcare service contractor.

(d)The nature and extent of the reinsurance program of the health care servicecontractor.

(e)The quality, diversification and liquidity of the investment portfolio of thehealth care service contractor.

(f)The recent past and projected future trend in the size of the investmentportfolio of the health care service contractor.

(g)The combined capital and surplus maintained by comparable health care servicecontractors.

(h)The adequacy of the reserves of the health care service contractor.

(i)The quality and liquidity of investments in affiliates. The director may treatany such investment as a disallowed asset for purposes of determining theadequacy of combined capital and surplus whenever in the judgment of thedirector the investment so warrants.

(j)The quality of the earnings of the health care service contractor and theextent to which the reported earnings include extraordinary items. [Formerly742.050; 1975 c.273 §1; 1977 c.402 §1; 1985 c.747 §67; 1991 c.331 §132; 1991c.958 §4; 1997 c.631 §552; 2001 c.318 §6; 2003 c.33 §2]

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