House File 146
HOUSE FILE
BY CONNORS and MADDOX
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act prohibiting the unauthorized discharge of a patient by
2 insurers, providing that organized delivery systems are in the
3 business of insurance for the purposes of provisions related
4 to unfair trade practices in the business of insurance, and
5 providing a penalty.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
7 TLSB 2165HH 80
8 jj/pj/5
PAG LIN
1 1 Section 1. Section 507B.2, subsection 1, Code 2003, is
1 2 amended to read as follows:
1 3 1. "Person" shall mean any of the following:
1 4 a. Any individual, corporation, association, partnership,
1 5 reciprocal exchange, interinsurer, fraternal beneficiary
1 6 association, and any other legal entity engaged in the
1 7 business of insurance, including agents producers, brokers and
1 8 adjusters. "Person" shall also mean any
1 9 b. Any corporation operating under the provisions of
1 10 chapter 514 and any benevolent association as defined and
1 11 operated under chapter 512A. For purposes of this chapter,
1 12 corporations operating under the provisions of chapter 514 and
1 13 chapter 512A shall be deemed to be engaged in the business of
1 14 insurance.
1 15 c. An organized delivery system authorized under 1993 Iowa
1 16 Acts, chapter 158, and licensed by the director of public
1 17 health. For purposes of this chapter, licensed organized
1 18 delivery systems operating under the provisions of 1993 Iowa
1 19 Acts, chapter 158, shall be deemed to be engaged in the
1 20 business of insurance.
1 21 Sec. 2. Section 507B.4, Code 2003, is amended by adding
1 22 the following new subsection:
1 23 NEW SUBSECTION. 9A. UNAUTHORIZED DISCHARGE FROM HOSPITAL.
1 24 Communicating to a covered individual who is hospitalized,
1 25 either directly or through an intermediary, that the covered
1 26 individual should or must be discharged or released from the
1 27 hospital by a certain time or date, without first providing
1 28 the covered individual with written consent to such discharge
1 29 or release endorsed by the covered individual's attending
1 30 health care provider.
1 31 EXPLANATION
1 32 This bill adds a new subsection to Code section 507B.4,
1 33 relating to unfair methods of competition and unfair or
1 34 deceptive acts or practices in the business of insurance.
1 35 The bill prohibits as an unfair act or practice by an
2 1 insurance company the communication to a covered individual
2 2 that the individual must be discharged or released from the
2 3 hospital by a certain time or date prior to the individual
2 4 receiving written consent to discharge from the individual's
2 5 health care provider.
2 6 A related amendment is made to Code section 507B.2
2 7 regarding the definition of "person" under Code chapter 507B
2 8 to include organized delivery systems. The definition states
2 9 that for purposes of the chapter, organized delivery systems
2 10 are deemed to be engaged in the business of insurance. This
2 11 definitional inclusion also makes the new unfair act or
2 12 practice in Code section 507B.4, as well as existing ones,
2 13 applicable to organized delivery systems.
2 14 A person who violates a provision of Code section 507B.4 is
2 15 subject to entry of a cease and desist order and payment of
2 16 monetary penalties under Code section 507B.7 and to a monetary
2 17 penalty under Code section 507B.11 for a violation of a cease
2 18 and desist order in the amount of up to $10,000 for each
2 19 violation, as well as potential suspension or revocation of
2 20 the person's license.
2 21 LSB 2165HH 80
2 22 jj/pj/5