Tennessee Code Annotated

Title 56: Insurance

Chapter 7: Policies and Policyholders

Part 30: Cover Tennessee Act of 2006 [Effective until June 30, 2015]

TCA 56-7-3007: Contracts to provide a plan of health benefits coverage. -- [Effective until June 30, 2015. See the Compiler's Notes.]

(a)  The department may enter into contracts with one (1) or more health insurance carriers or third party administrators selected through a competitive procurement process to provide a plan of health benefits coverage to eligible individuals. In soliciting proposals to provide coverage, the department may:

     (1)  Specify rates to be paid by the program to the contractor;

     (2)  Specify minimum requirements with respect to the health benefits to be covered by the plan, which shall prioritize preventative health services. The department shall consider requiring the plan to cover generic prescription drugs and physician visits with only limited cost sharing. The department may permit limitations on the amount of the services covered by the plan, and may permit increased cost sharing at higher utilization levels;

     (3)  Solicit proposals with respect to specific benefits to be covered by the plan, including any limits on the benefits; provided, that the department encourages as broad a benefit package as possible for the rates provided, with benefit limits or higher cost sharing for appropriate services, such as non-preventative services, preferred over exclusions as a mechanism for controlling costs;

     (4)  Provide other incentives for the development of benefit packages emphasizing preventative and primary care coverage;

     (5)  Specify requirements and/or solicit proposals with respect to plan coverage of dependents of eligible individuals, including separate rates for dependent coverage or a requirement or proposal that no dependent coverage be offered;

     (6)  Specify requirements and/or solicit proposals with respect to plan coverage of maternity services, including separate rates for the coverage;

     (7)  Specify requirements and/or solicit proposals with respect to plan coverage or exclusions of preexisting conditions; provided, that no preexisting condition provision subjects an enrollee to an exclusion of longer than twelve (12) months;

     (8)  Specify requirements and/or solicit proposals with respect to enrollee cost sharing, including cost sharing based on a sliding scale in accordance with income, as appropriate;

     (9)  Specify requirements and/or solicit proposals with respect to provider networks, consistent with the prioritization of primary care services. Where geographically appropriate, the department should encourage selective contracting with high performance provider networks meeting specified quality, cost and patient satisfaction criteria, and should encourage pay-for-performance provider rate structures designed to reward quality of care and cost-effective medicine, where appropriate;

     (10)  Specify requirements and/or solicit proposals with respect to quality assurance, quality improvement, disease prevention, disease and/or case management, cost containment, provider reimbursement mechanisms, the use of health information technology, wellness programs, incentives for healthy living and any other programmatic innovations or requirements. The department should encourage plans to promote enrollee wellness and personal responsibility, such as mandatory twelve-month waiting periods for enrollees who have previously dropped coverage, and to establish equity programs in which enrollees can earn reduced cost sharing and/or increased benefits through appropriate behavior, such as extended participation in the plan or participation in disease management or other designated programs offered by the plan;

     (11)  Specify requirements and/or solicit proposals with respect to application and enrollment processes;

     (12)  Specify requirements and/or solicit proposals with respect to procedures for the plan to collect premium contributions required pursuant to § 56-7-3013;

     (13)  Specify requirements and/or solicit proposals with respect to continuing coverage for enrollees who leave the employment of a contributing employer;

     (14)  Specify any applicable marketing guidelines, requirements and/or restrictions, including the use of the existing commercial brokerage or agent network or other more direct distribution mechanisms, where appropriate;

     (15)  Specify any applicable reporting requirements for contractors; and

     (16)  Include any other specifications or incentives as the department deems appropriate.

(b)  Notwithstanding the requirements of § 12-4-109, the department may:

     (1)  Consult with experts from outside the department and outside of state government in evaluating proposals to provide coverage under the program; and

     (2)  Consider the factors specified in its solicitation of proposals in awarding contracts.

(c)  The department shall ensure that at least two (2) plans are offered to eligible individuals and shall enter into contracts to provide the plans with one (1) or more contractors. Each contract shall set forth the department's agreements with the contractor with respect to the items set forth in subsection (a), to the extent applicable, and shall also set forth any other necessary terms and conditions.

(d)  Contractors shall be permitted to design the health benefits coverage offered through the plans, consistent with the requirements of this part and with any additional requirements established by the department.

(e)  Contractors may subcontract for the provision of medical, administrative or other services in connection with the plan.

(f)  The department shall compensate contractors as provided in the contract. The department may offer incentives, including a bonus payment to the contractors that meet enrollment criteria specified by the department, or for meeting other performance criteria specified by the department.

(g)  Notwithstanding any other provisions of this part to the contrary, the state shall place all insurance risk for the health benefits provided pursuant to this part on the contractors as of January 1, 2010, so that the state, after that date, assumes no insurance risk for the health benefits coverage.

History: [Acts 2006, ch. 867, §§ 5, 14(a).]