House Bill 740

AN ACT TO ESTABLISH A STATEWIDE SPONSORED INSURANCE PLAN FOR INMATE MEDICAL COSTS; TO PROVIDE DEFINITIONS FOR THE PLAN; TO PROVIDE THE DUTIES OF THE BOARD FOR THE PLAN; TO CREATE AN ADVISORY COUNCIL FOR THE BOARD; TO AUTHORIZE THE BOARD TO ENTER INTO CONTRACTS FOR THE PLAN; TO PROVIDE A CERTAIN AMOUNT OF CONTRIBUTION FROM THE STATE AND COUNTIES AND MUNICIPALITIES IN ORDER TO FUND THE PLAN; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. For the purposes of this chapter, the words and phrases used herein shall have the following meanings:

(a) "Inmate" means a person who is incarcerated in any municipal, or county jail or within any state correctional facility.

(b) "Department" means the Department of Finance and Administration.

(d) "Fund" means the Statewide Sponsored Insurance Plan for Inmate Medical Costs set up under this article.

(e) "Board" means the Statewide Sponsored Insurance Plan for Inmate Medical Costs Board.

SECTION 2. (1) The board shall administer the plan and is authorized to adopt and promulgate rules and regulations for its administration, subject to the terms and limitations contained in this article.

(2) The board shall develop a five-year strategic plan for the insurance plan established by Section 1 of this act. The strategic plan shall address, but not be limited to:

(a) Changing trends in the health care industry, and how they effect delivery of services to inmates of the plan.

(b) Alternative service delivery systems.

(c) Any foreseeable problems with the present system of delivering and administering health care benefits in Mississippi.

(d) The development of options and recommendations for changes in the plan.

(3) To carry out the requirements of subsection (2) of this section, the board may conduct formal research, including questionnaires and attitudinal surveys of inmates' needs and preferences with respect to service delivery.

(4) The board shall develop and make available for public review at its offices a comprehensive plan document which documents all benefits for which inmates of the plan created by Section 1 of this act are eligible.

(5) (a) The board may enter into contracts with accountants, actuaries and other persons from the private sector whose skills are necessary to carry out the purposes of the plan.

(b) Before the board enters into any contract for services as provided in paragraph (a) of this subsection, the board shall first determine that the services are required, and that the staff of the board and personnel of other state agencies are not sufficiently experienced to provide the services.

(c) The board is also authorized to procure legal services if it deems these services to be necessary to carry out its responsibilities under the plan.

SECTION 3. Such health insurance shall not include expense incurred by or on account of an inmate prior to the effective date of the plan as to him; dental care and treatment, except dental surgery and appliances to the extent necessary for the correction of damage caused by accidental injury while covered by the plan, or as a direct result of disease covered by the plan; eyeglasses, hearing aids and examinations for the prescription or fitting thereof; cosmetic surgery or treatment, except to the extent necessary for correction of damage by accidental injury while covered by the plan or as a direct result of disease covered by the plan; services received in a hospital owned or operated by the United States government for which no charge is made; services received for injury or sickness due to war or any act of war, whether declared or undeclared, which war or act of war shall have occurred after the effective date of this plan; expense for which the individual is not required to make payment; expenses to the extent of benefits provided under any employer group plan other than this plan, in which the state participates in the cost thereof; and such other expenses as may be excluded by regulations of the board.

SECTION 4. (1) (a) The board shall design a plan of health insurance for inmates which provides benefits for semiprivate rooms in addition to other incidental coverages which the board deems necessary. The amount of the coverages shall be in such reasonable amount as may be determined by the board to be adequate, after due consideration of current health costs in Mississippi. The plan shall also include major medical benefits in such amounts as the board shall determine. The board is also authorized to accept bids for such alternate coverage and optional benefits as the board shall deem proper. Any contract for alternative coverage and optional benefits shall be awarded by the board after it has carefully studied and evaluated the bids and selected the best and most cost-effective bid. The board may reject all such bids; however, the board shall notify all bidders of the rejection and shall actively solicit new bids if all bids are rejected. The board may employ or contract for such consulting or actuarial services as may be necessary to formulate the plan, and to assist the board in the preparation of specifications and in the process of advertising for the bids for the plan. The board shall keep a record of all persons, agents and corporations who contract with or assist the board in preparing and developing the plan. The board in a timely manner shall provide copies of this record to the members of the advisory council created in this section and those legislators, or their designees, who may attend meetings of the advisory council. The board shall provide copies of this record in the solicitation of bids for the administration or servicing of the self-insured program. Each person, agent or corporation which, during the previous fiscal year, has assisted in the development of the plan or employed or compensated any person who assisted in the development of the plan, and which bids on the administration or servicing of the plan, shall submit to the board a statement accompanying the bid explaining in detail its participation with the development of the plan. This statement shall include the amount of compensation paid by the bidder to any such employee during the previous fiscal year. The board shall make all such information available to the members of the advisory council and those legislators, or their designees, who may attend meetings of the advisory council before any action is taken by the board on the bids submitted. The failure of any bidder to fully and accurately comply with this paragraph shall result in the rejection of any bid submitted by that bidder or the cancellation of any contract executed when the failure is discovered after the acceptance of that bid. The board is authorized to promulgate rules and regulations to implement the provisions of this subsection.

Any corporation, association, company or individual that contracts with the board for the third-party claims administration of the self-insured plan shall prepare and keep on file an explanation of benefits for each claim processed. The explanation of benefits shall contain such information relative to each processed claim which the board deems necessary, and, at a minimum, each explanation shall provide the claimant's name, claim number, provider number, provider name, service dates, type of services, amount of charges, amount allowed to the claimant and reason codes. The information contained in the explanation of benefits shall be available for inspection upon request by the board. The board shall have access to all claims information utilized in the issuance of payments to inmates and providers.

(b) There is created an advisory council to advise the board in the formulation of the Statewide Sponsored Insurance Plan for Inmate Medical Costs. The council shall be composed of the State Insurance Commissioner or his designee, an employee-representative of the institutions of higher learning appointed by the board of trustees thereof, an employee-representative of the Department of Transportation appointed by the director thereof, an employee-representative of the State Tax Commission appointed by the Commissioner of Revenue, an employee-representative of the Mississippi Department of Health appointed by the State Health Officer, an employee-representative of the Mississippi Department of Corrections appointed by the Commissioner of Corrections, and an employee-representative of the Department of Human Services appointed by the Executive Director of Human Services, two (2) certificated public school administrators appointed by the State Board of Education, two (2) certificated classroom teachers appointed by the State Board of Education, a noncertificated school employee appointed by the State Board of Education and a community/junior college employee appointed by the State Board for Community and Junior Colleges.

The Lieutenant Governor may designate the Secretary of the Senate, the Chairman of the Senate Appropriations Committee, the Chairman of the Senate Education Committee and the Chairman of the Senate Insurance Committee, and the Speaker of the House of Representatives may designate the Clerk of the House, the Chairman of the House Appropriations Committee, the Chairman of the House Education Committee and the Chairman of the House Insurance Committee, to attend any meeting of the Statewide Sponsored Insurance Plan for Inmate Medical Costs Advisory Council. The appointing authorities may designate an alternate member from their respective houses to serve when the regular designee is unable to attend such meetings of the council. Such designees shall have no jurisdiction or vote on any matter within the jurisdiction of the council. For attending meetings of the council, such legislators shall receive per diem and expenses which shall be paid from the contingent expense funds of their respective houses in the same amounts as provided for committee meetings when the Legislature is not in session; however, no per diem and expenses for attending meetings of the council will be paid while the Legislature is in session. No per diem and expenses will be paid except for attending meetings of the council without prior approval of the proper committee in their respective houses.

(c) No change in the terms of the Statewide Sponsored Insurance Plan for Inmate Medical Costs may be made effective unless the board, or its designee, has provided notice to the Statewide Sponsored Insurance Plan for Inmate Medical Costs Advisory Council and has called a meeting of the council at least fifteen (15) days before the effective date of such change. In the event that the Statewide Sponsored Insurance Plan for Inmate Medical Costs Advisory Council does not meet to advise the board on the proposed changes, the changes to the plan shall become effective at such time as the board has informed the council that the changes shall become effective.

SECTION 5. (1) The board is authorized to execute a contract or contracts to provide the benefits under the plan. Such contract or contracts may be executed with one or more corporations or associations licensed to transact health insurance business in this state; however, no such contract shall be executed with any corporation, association or company domiciled in any other state except that such corporation, association or company shall meet the conditions and terms for a like contract established by the state of the domicile of such corporation, association or company for a Mississippi corporation, association or company. No corporation, association or company with less than five (5) years' experience in the health field may bid. All of the benefits to be provided under the plan may be included in one or more similar contracts, or the benefits may be classified into different types with each type included under one or more similar contracts issued by the same or different companies.

The board shall supply the statistical information upon which a quotation is to be calculated, upon request, to all carriers licensed in the state. Bids may be accepted at the discretion of the board, and the board shall have the right to adjust rates on an annual basis if the board shall deem such adjustment necessary. Any additional written information the carrier wishes to submit, supporting the proposed benefits and premium rate, may accompany the proposal. After receiving the proposals, the board shall determine whether to contract with the carrier which has been determined to have submitted the lowest and best bid, or to reject all such bids and receive new proposals.

The board shall authorize any corporation licensed to transact health insurance business in this state issuing any such contract to reinsure portions of such contract with any other such corporation which elected to be a reinsurer and is legally competent to enter into a reinsurance agreement. The board may designate one or more of such corporations as the administering corporation or corporations.

The board may, as of the end of any contract year, discontinue any contract or contracts it has executed with any corporation or corporations and replace it or them with a contract or contracts in any other corporation or corporations meeting the requirements of this section.

The board may reject any and all bids and contracts under this section and may elect for the state to become a self-insurer; however, administration and service of any such self-insured program may be contracted to a third party by the board. Any contract with a third party to administer the plan shall be bid.

(2) By September 30 of each year, the board shall report to the Joint Legislative Budget Committee, Senate Insurance Committee, House Insurance Committee, Senate Corrections Committee, House Corrections Committee and Joint Legislative Committee on Performance Evaluation and Expenditure Review the condition of the Statewide Sponsored Insurance Plan for Inmate Medical Costs. Such report shall contain for the most recently completed fiscal year, but not be limited to, the following:

(a) The plan's financial condition at the close of the fiscal year.

(b) The history of yearly claims paid and premiums received for each premium class, including, but not limited to, active employees, dependents and retirees.

(i) A detailed breakdown of all expenditures of the plan, administrative and otherwise, for the most recently completed fiscal year and projected expenditures, administrative and otherwise, for the current and next fiscal year;

(ii) A schedule of all contracts, administrative and otherwise, executed for the benefit of the plan during the most recent completed fiscal year and those executed and anticipated for the current fiscal year; and

(iii) A description of the processes used by the board to procure all contracts, administrative and otherwise, as well as a description of the scope of services to be provided by each contractor.

Budgetary information shall be provided in a format designated by the Joint Legislative Budget Committee.

The Joint Legislative Budget Committee, Senate Insurance Committee, House Insurance Committee, Senate Corrections Committee, House Corrections Committee and Joint Legislative Committee on Performance Evaluation and Expenditure Review may request additional information or reports from the board on an as-needed basis.

(3) Annually, the board shall request, and the Department of Audit shall conduct, a comprehensive audit of the Statewide Sponsored Insurance Plan for Inmate Medical Costs. For purposes of this section, the audit required herein shall be separate and distinct from any audit prepared in conjunction with the development of the Comprehensive Annual Financial Report (CAFR).

SECTION 6. (1) The board is authorized to determine the manner in which premiums and contributions by the municipalities, counties and the state that house inmates shall be collected to provide the self-insured health insurance program for employees as provided under this article. The state shall provide seventy-five percent (75%) of the cost of the above health insurance plan for inmates and municipalities and counties shall provide twenty-five percent (25%) of the cost of the plan. The amount of the municipal and county contribution shall be based on the state population.

(2) When the use of federal funding is allowable to defray, in full or in part, the cost of participation in the insurance plan by those who house inmates the allowance under this section shall be reduced to the extent of the federal funding.

(3) The board may establish and enforce late charges and interest penalties or other penalties for the purpose of requiring the prompt payment of all premiums. All funds in excess of the amount needed for disbursement of claims shall be deposited in a special fund in the State Treasury to be known as the Statewide Sponsored Insurance Plan For Inmate Medical Costs Fund. The State Treasurer shall invest all funds in the Statewide Sponsored Insurance Plan For Inmate Medical Costs Fund and all interest earned shall be credited to the Statewide Sponsored Insurance Plan For Inmate Medical Costs Fund. Such funds shall be placed with one or more depositories of the state and invested on the first day such funds are available for investment in certificates of deposit, repurchase agreements or in United States Treasury bills or as otherwise authorized by law for the investment of Public Employees' Retirement System funds, as long as such investment is made from competitive offering and at the highest and best market rate obtainable consistent with any available investment alternatives; however, such investments shall not be made in shares of stock, common or preferred, or in any other investments which would mature more than one (1) year from the date of investment. The board shall have the authority to draw from this fund periodically such funds as are necessary to operate the plan or to pay to the insurance carrier the cost of operation of this plan.

(4) The board shall also provide for the creation of an Insurance Reserve Fund and funds therein shall be invested by the State Treasurer with all interest earned credited to the Statewide Sponsored Insurance Plan for Inmate Medical Costs Insurance Fund.

SECTION 7. Any benefits payable under the plan may be made either directly to the attending physicians, hospitals, medical groups, or others furnishing the services upon which a claim is based, or to the covered employee, upon presentation of valid bills for such services, subject to such provisions to facilitate payment as may be made by the board.

SECTION 8. This act shall take effect and be in force from and after July 1, 2007.