Discount Medical Plans & RX Cards What Are They? AICP 2008 - PowerPoint PPT Presentation

Discount Medical Plans & RX Cards – What Are They? AICP 2008 ANNUAL CONFERENCE Atlanta, GA Session 58 October 7, 2008 3/2/2012 1

Discount Medical Plans & RX Cards – What Are They? PANEL MEMBERS Susan Coulter Coulter & Associates Ginny McHugh McHugh Consulting Resources, Inc. 3/2/2012 2

DMPO’s What are they? How are they marketed? Why & or How are they regulated? Overview of NAIC Model What are other states perspectives? Associations and DMPO’s. 3/2/2012 3

What are “DMPO’s”? Discount Medical Plan Organization (DMPO): An entity that in exchange for fees, dues, or other consideration provides access for DMPO members to providers of medical or ancillary services and the right to receive medical or ancillary services from those providers at a discount. DMPO’s contract with the providers and provider networks etc. to offer access to their services at a discount; and they determine the charge to their members. (NAIC Definition summarized) Discount Prescription Drug Cards may or may not be considered a DMPO. 3/2/2012 4

What are they NOT? They are not insurance 3/2/2012 5

Discount RX Cards They are NOT insurance Discount Prescription Drug Plan Organization: – An entity that in exchange for fees, dues, or other consideration provides access for members to providers of pharmacy services and the right to receive pharmacy services from those providers at a discount. They contract with the providers, pharmacy networks etc. to offer access to their services at a discount; and they determine the charge to their members. (NAIC Definition summarized) 3/2/2012 6

How are they marketed? Through direct mail as independent products In combination with insurance products As a benefit of membership in associations and other groups etc. Other ways such as convenience stores, etc. 3/2/2012 7

Why are they regulated? Why? – Growing concern over increased consumer complaints – Perception of abuses – Adequate Accessibility 3/2/2012 8

How are they regulated? How? – Consumer protection regulation – Fraud regulation – Advertising Regulation – Insurance Regulation – Combination 3/2/2012 9

NAIC Model Overview Purpose Applicability and Scope – DMPO’s – Prescription Drug Cards 3/2/2012 10

NAIC Model Overview Licensing or Registration Option Minimum Capitol Requirements or Surety Bond Requirements 3/2/2012 11

NAIC Model Overview Charges and Fees ; Bundling: when sold in conjunction with other products – Separate charges must be disclosed – cancellation must provide pro-rata reimbursement – A DMPO that is also a health carrier that provides a DMPO product which is sold incidental to an insurance product is not subject to this section of the Act 3/2/2012 12

NAIC Model Overview Charge and Form Filing Requirements – Option 1: prior approval a list of all member fees and charges are filed with the DOI. Any fee greater than $30 per mo or $360 a year must e filed prior to use .The DMPO has burden to prove the fees are reasonable. All DMPO forms including the required new member information document describing the terms and conditions must be first filed and approved. 3/2/2012 13

NAIC Model Overview Charge and Form Filing Requirements – Option 2- informational filing All fees and charges are filed with the DOI All DMPO forms including required new member information document describing the terms and conditions are filed 3/2/2012 14

NAIC Model Overview Provider Agreement /Listing Requirements – DMPO shall have a written provider agreement with all providers including ancillary providers that provides: A list of all services to be discounted Amounts or schedule of the discount A statement the provider will not charge the member more than the discounted rate – DMPO shall maintain a website with a current listing of providers & include the website on all advertising. 3/2/2012 15

NAIC Model Overview Marketing Requirements – DMPO may market directly or contract with other marketers. – Must have written agreement with marketer – The Agreement shall prohibit marketer from using advertising or marketing materials that it has not approved in writing. – DMPO is responsible for all marketing materials. – Commissioner may request marketing material . 3/2/2012 16

NAIC Model Overview Marketing Restrictions- – May not describe itself as an insurance product – May not have any restrictions on access to the DMPO providers – May not pay providers any fees for medical services or collect money from a member to pay a provider for services unless the DMPO has an active COA to act as a TPA – Each member must receive a written document describing the terms and conditions of the plan 3/2/2012 17

What are other State perspectives ? Overview of Survey & Chart 29 states regulate through the insurance division ( even though it is not insurance) or via consumer protection, business regulation area, attorney general office or otherwise. – Of the 29 that regulate via the DOI, 22 require licensing or registration of the DMPO 22 states do not have any specific regulation. 3/2/2012 18

Associations and DMPO’s Bundling with Association membership does not subject the Association to DMPO regulation if it is clear they are separate. – Association Dues and DMPO dues should be separate – No private labeling- Clear identifications of the DMPO – No transfer of risk for either entity otherwise considered insurance. 3/2/2012 19

Most Common Misunderstandings Consumers – think they are obtaining insurance Marketing – Failure to grasp the growing regulation of these programs Regulators – Where they have authority and how to protect their consumers 3/2/2012 20

Questions? Thank you! 3/2/2012 21