This information explains two Michigan Health Maintenance Organization, or HMO, laws, including what an HMO needs to do to be licensed in Michigan and how a member’s right to independent review works.
The laws that affect Michigan HMOs are found in the Michigan Insurance Code. HMOs are overseen by the Department of Insurance and Financial Services, which is a division of the Michigan Department of Labor & Economic Growth. The Department of Insurance and Financial Services undertakes an annual site visit to each HMO in order to assess whether the HMO is complying fully with all requirements.
The Health Maintenance Organization Act outlines the requirements to be licensed as an HMO, including:
HMOs that have been in operation for two years must have an open enrollment period lasting at least 30 days at least once during each following 12-month period. For example, if an HMO began operation on March 15, 2001, its first open enrollment period would have to occur sometime between March 15, 2003 and March 14, 2004.
During its open enrollment, an HMO must accept individuals who apply, in the order that they apply for enrollment, up to the limit of its capacity as submitted to the Department of Insurance and Financial Services. Individuals cannot be refused because of preexisting medical conditions, although a waiting-period of up to six months may be applied before services for preexisting conditions will be covered.
The HMO Act requires that every HMO, by the end of its first year of operation, must have a board of directors structured so that a minimum of one-third of its members are adult enrollees of the HMO. These enrollee board members cannot be officers or employees of the HMO, cannot be stockholders of the HMO who own more than 5 percent of the HMO shares and cannot be responsible for or financially interested in the HMO's affairs.
Only the HMO's subscribers can vote for enrollee board members. Those individuals who receive the most votes are elected. Each subscriber has one vote for each open position.
The term of office for enrollee board members is three years. If an enrollee board member must leave the position before the term has expired, a majority of the remaining enrollee board members appoints a replacement individual who also must meet the qualifications for enrollee board members. That replacement enrollee board member serves only for the unexpired portion of the original term. Enrollee board members' terms may be staggered so that they expire on a staggered basis.
Another important set of rights for HMO members is provided by the Patient's Right to Independent Review Act. This law established an additional route for review in two situations:
The review is undertaken by the Insurance Commissioner (for questions about what are covered benefits or accuracy of coding) or by an independent review organization using health professionals not associated with the HMO (for questions that involve issues of medical necessity or clinical review criteria).
Whenever an HMO reviews a health care service or request for service and decides to deny, reduce or terminate the service, the HMO must send a notice about this decision to the member and must include information on both the HMO's internal grievance procedure and the independent review process. In this instance, Blue Care Network members will receive an explanation of benefits statement which includes this information.
Privacy issues: To report a concern or if you think your protected health information has been compromised, please call us at 1-800-552-8278 or email us. Don't include any protected health information in your email.
Other issues: For customer service, call the number on the back of your member ID card.