CHAPTER 636

636.002 Short title. Sections 1-57, chapter 93-148, Laws of Florida, may be cited as the “Prepaid Limited Health Service Organization Act of Florida.” History. — s. 1, ch. 93-148. 636.003 Definitions. As used in this act, the term: (1) “Capitation” means the fixed amount paid by a prepaid limited health service organization to a health care provider under contract with the prepaid limited health service organization in exchange for the rendering of covered limited health services. (2) “Enrollee” means an individual, including dependents, who is entitled to limited health services pursuant to a contract, or any other evidence of coverage, with an entity authorized to provide or arrange for such services under this act. (3) “Evidence of coverage” means the certificate, agreement, membership card, or contract issued pursuant to this act setting forth the coverage to which an enrollee is entitled. (4) “Insolvent” means that all the statutory assets of the prepaid limited health service organization, if made immediately available, would not be sufficient to discharge all of its statutory liabilities or that the prepaid limited health service organization is unable to pay its debts as they become due in the usual course of business. (5) “Limited health service” means ambulance services, dental care services, vision care services, mental health services, substance abuse services, chiropractic services, podiatric care services, and pharmaceutical services. “Limited health service” does not include inpatient, hospital surgical services, or emergency services except as such services are provided incident to the limited health services set forth in this subsection. (6) “Prepaid limited health service contract” means any contract entered into by a prepaid limited health service organization with a subscriber or group of subscribers to provide limited health services in exchange for a prepaid per capita or prepaid aggregate fixed sum. (7) “Prepaid limited health service organization” means any person, corporation, partnership, or any other entity which, in return for a prepayment, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers. Prepaid limited health service organization does not include: (a) An entity otherwise authorized pursuant to the laws of this state to indemnify for any limited health service; (b) A provider or entity when providing limited health services pursuant to a contract with a prepaid limited health service organization, a health maintenance organization, a health insurer, or a self-insurance plan; or (c) Any person who is licensed pursuant to part II as a discount plan organization. (8) “Provider” means, but is not limited to, any physician, dentist, health facility, or other person or institution which is duly licensed in this state to deliver limited health services. (9) “Qualified independent actuary” means an actuary who is a member of the American Academy of Actuaries or the Society of Actuaries and has experience in establishing rates for limited health services and who has no financial or employment interest in the prepaid limited health service organization. (10) “Reporting period” means the annual accounting period or fiscal year, or any part thereof, of the prepaid limited health service organization. The calendar year shall be the fiscal year for each such organization other than those holding an existing certificate of authority as of October 1, 1993. (11) “Subscriber” means an individual who has contracted, or arranged, or on whose behalf a contract or arrangement has been entered into, with a prepaid limited health service organization for health care services or other persons who also receive health care services as a result of the contract. (12) “Surplus” means total statutory assets in excess of total liabilities, except that assets pledged to secure debts not reflected on the books of the prepaid limited health service organization shall not be included in surplus. Surplus includes capital stock, capital in excess of par, other contributed capital, retained earnings, and surplus notes. (13) “Surplus notes” means debt which has been subordinated to all claims of subscribers and general creditors of the organization and the debt instrument shall so state. (14) “Statutory accounting principles” means generally accepted accounting principles, except as modified by this act. (15) “Qualified employee” means an employee of the organization: (a) Who has a minimum of 5 years of experience in rate determinations for prepaid health services, and who demonstrates through filings with the office that the person is in fact qualified under the terms of this act; or (b) Who is a member of the American Academy of Actuaries or the Society of Actuaries and has experience in establishing rates for limited health service. History. — s. 2, ch. 93-148; s. 1, ch. 97-159; s. 1523, ch. 2003-261; s. 30, ch. 2004-297; s. 16, ch. 2017-112. 636.004 Applicability of other laws. Except as provided in this act, prepaid limited health service organizations are governed by the provisions of this act and are exempt from the Florida Insurance Code unless specifically referenced. History. — s. 3, ch. 93-148. 636.005 Incorporation required; exceptions. (1) On or after October 1, 1993, any entity that has not yet obtained a certificate of authority to operate a prepaid limited health service organization in this state must be incorporated. (2) A prepaid limited health service organization may be organized as a profit or nonprofit corporation. (3) A prepaid limited health service organization may be incorporated in another state if the entity maintains a certificate of authority or license in the state in which it is domiciled to provide services which the applicant intends to provide in this state and maintains a certificate of authority in this state. (4) This section shall not apply to providers licensed pursuant to chapter 463 or any other licensed professional if incorporation is limited or restricted by law. History. — s. 4, ch. 93-148; s. 68, ch. 99-5. 636.006 Insurance business not authorized. Nothing in the Florida Insurance Code or this act authorizes any prepaid limited health service organization to transact any insurance business other than that specifically authorized by this act, or otherwise to engage in any other type of insurance unless it is authorized under a certificate of authority issued by the office under the provisions of the Florida Insurance Code. History. — s. 5, ch. 93-148; s. 1524, ch. 2003-261. 636.007 Certificate of authority required. A person, corporation, partnership, or other entity may not operate a prepaid limited health service organization in this state without obtaining and maintaining a certificate of authority from the office pursuant to this act. A political subdivision of this state which is operating an emergency medical services system and offers a prepaid ambulance service plan as a part of its emergency medical services system shall be exempt from the provisions of this act and all other provisions of the insurance code. An insurer, while authorized to transact health insurance in this state, or a health maintenance organization possessing a valid certificate of authority in this state, may also provide services under this act without additional qualification or authority, but shall be otherwise subject to the applicable provisions of this act. History. — s. 6, ch. 93-148; s. 1525, ch. 2003-261. 636.008 Application for certificate of authority. Before any entity may operate a prepaid limited health service organization, it must obtain a certificate of authority from the office. An application for a certificate of authority to operate a prepaid limited health service organization must be filed with the office on a form prescribed by the commission. Such application must be sworn to by an officer or authorized representative of the applicant and be accompanied by the following: (1) A copy of the applicant’s basic organizational document, including the articles of incorporation, articles of association, partnership agreements, trust agreement, or other applicable documents and all amendments to such documents. (2) A copy of all bylaws, rules, and regulations, or similar documents, if any, regulating the conduct of the applicant’s internal affairs. (3) A list of the names, addresses, official positions, and biographical information of the individuals who are responsible for conducting the applicant’s affairs, including, but not limited to, all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers, contracted management company personnel, and any person or entity owning or having the right to acquire 10 percent or more of the voting securities of the applicant. Such listing must fully disclose the extent and nature of any contracts or arrangements between any individual who is responsible for conducting the applicant’s affairs and the prepaid limited health service organization, including any possible conflicts of interest. (4) A complete biographical statement, on forms prescribed by the commission, an independent investigation report, and a set of fingerprints, as provided in chapter 624, with respect to each individual identified under subsection (3). (5) A statement generally describing the applicant, its facilities and personnel, and the limited health service or services to be offered. (6) A copy of the form of all contracts made or to be made between the applicant and any providers regarding the provision of limited health services to enrollees. (7) A copy of the form of any contract made or arrangement to be made between the applicant and any person listed in subsection (3). (8) A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant’s behalf of any function, including, but not limited to, marketing, administration, enrollment, investment management, and subcontracting for the provision of limited health services to enrollees. (9) A copy of the form of any prepaid limited health service contract which is to be issued to employers, unions, trustees, individuals, or other organizations and a copy of any form of evidence of coverage to be issued to subscribers. (10) A copy of the applicant’s most recent financial statements audited by an independent certified public accountant. (11) A copy of the applicant’s financial plan, including a 3-year projection of anticipated operating results, a statement of the sources of funding, and provisions for contingencies, for which projection all material assumptions shall be disclosed. (12) A schedule of rates and charges for each contract to be used which contains an opinion from a qualified independent actuary or a qualified employee that the rates are not inadequate, excessive, or discriminatory. If a prepaid limited health service organization does not employ or otherwise retain the services of an independent actuary, the chief executive officer of the prepaid limited health service organization must review and sign the certification indicating her or his agreement with its conclusions. If the office determines that, based upon documents filed with the office, the qualified employee is not qualified, the organization shall retain the services of a qualified independent actuary. (13) A description of the proposed method of marketing. (14) A description of the subscriber complaint procedures to be established and maintained as required under s. 636.038. (15) A description of how the applicant will comply with s. 636.046. (16) The fee for issuance of a certificate of authority as provided in s. 636.057. (17) Such other information as the commission or office may reasonably require to make the determinations required by this act. The office shall issue a certificate of authority which shall expire on June 1 each year and which the office shall renew if the applicant pays the license fees provided in s. 636.057 and if the office is satisfied that the organization is in compliance with this act. History. — s. 7, ch. 93-148; s. 484, ch. 97-102; s. 1526, ch. 2003-261. 636.009 Issuance of certificate of authority; denial. (1) Following receipt of an application filed pursuant to s. 636.008, the office shall review such application and notify the applicant of any deficiencies contained therein. The office shall issue a certificate of authority to an applicant who has filed a completed application in conformity with s. 636.008, upon payment of the fees specified by s. 636.057 and upon the office being satisfied that the following conditions are met: (a) The requirements of s. 636.008 have been fulfilled. (b) The entity is actuarially sound. (c) The entity has met the applicable minimum surplus requirements specified in s. 636.045. (d) The procedures for offering limited health services and offering and terminating contracts to subscribers will not unfairly discriminate on the basis of age, sex, race, handicap, health, or economic status. However, this paragraph does not prohibit reasonable underwriting classifications for the purposes of establishing contract rates, nor does it prohibit prospective experience rating. (e) The entity furnished evidence of adequate insurance coverage, including, but not limited to, general liability or professional liability coverage, or an adequate plan for self-insurance to respond to claims for injuries arising out of the furnishing covered services. (f) The ownership, control, and management of the entity are competent and trustworthy and possess managerial experience that would make the proposed operation beneficial to the subscribers. The office shall not grant or continue authority to transact the business of a prepaid limited health service organization in this state at any time during which the office has good reason to believe that the ownership, control, or management of the organization includes any person whose business operations are or have been marked by business practices or conduct that is to the detriment of the public, stockholders, investors, or creditors. (g) The entity has demonstrated compliance with s. 636.047 by obtaining a blanket fidelity bond in the amount of at least $50,000, issued by a licensed insurance carrier in this state, that will reimburse the entity in the event that anyone handling the funds of the entity either misappropriates or absconds with the funds. All employees handling the funds must be covered by the blanket fidelity bond. However, the fidelity bond need not cover an individual who owns 100 percent of the stock of the organization if such stockholder maintains total control of the organization’s financial assets, books and records, and fidelity bond coverage is not available for such individual. An agent licensed under the provisions of the Florida Insurance Code may, either directly or indirectly, represent the prepaid limited health service organization in the solicitation, negotiation, effectuation, procurement, receipt, delivery, or forwarding of any subscriber’s contract, or collect or forward any consideration paid by the subscriber to the prepaid limited health service organization. The licensed agent shall not be required to post the bond required by this subsection. (h) The prepaid limited health service organization has a grievance procedure that will facilitate the resolution of subscriber grievances and that includes both formal and informal steps available within the organization. (i) The applicant is financially responsible and may reasonably be expected to meet its obligations to enrollees and to prospective enrollees. In making this determination, the office may consider: 1. The financial soundness of the applicant’s arrangements for limited health services and the minimum standard rates, deductibles, copayments, and other patient charges used in connection therewith. 2. The adequacy of surplus, other sources of funding, and provisions for contingencies. 3. The manner in which the requirements of s. 636.046 have been fulfilled. (j) The agreements with providers for the provision of limited health services contain the provisions required by s. 636.035. (k) Any deficiencies identified by the office have been corrected. (l) All requirements of this chapter have been met. (2) If the certificate of authority is denied, the office shall notify the applicant and shall specify the reasons for denial in the notice. History. — s. 8, ch. 93-148; s. 1527, ch. 2003-261. 636.012 Continued eligibility for certificate of authority. In order to maintain its eligibility for a certificate of authority, a prepaid limited health service organization must continue to meet all conditions required to be met under this act and the rules adopted thereunder for the initial application for and issuance of its certificate of authority under ss. 636.008 and 636.009. History. — s. 9, ch. 93-148. 636.0145 Certain entities contracting with Medicaid. An entity that is providing comprehensive inpatient and outpatient mental health care services to certain Medicaid recipients in Hillsborough, Highlands, Hardee, Manatee, and Polk Counties through a capitated, prepaid arrangement pursuant to the federal waiver provided for in s. 409.905(5) must become licensed under this chapter by December 31, 1998. Any entity licensed under this chapter which provides services solely to Medicaid recipients under a contract with Medicaid is exempt from ss. 636.017, 636.018, 636.022, 636.028, 636.034, and 636.066(1). History. — s. 4, ch. 97-65; s. 130, ch. 2004-5; s. 26, ch. 2004-344; s. 14, ch. 2011-61; s. 29, ch. 2015-3. 636.015 Language used in contracts and advertisements; translations. (1)(a) All contracts or forms must be printed in English. (b) If the negotiations leading up to the effectuation of a prepaid limited health service organization contract are conducted in a language other than English, the prepaid limited health service organization must supply to the member a written translation of the contract, which translation accurately reflects the substance of the contract and is in the language used to negotiate the contract. The written translation must be affixed to, and shall become a part of, the contract or form, including a certification that the written translation is identical to the English version. Any such translation must be furnished to the office as part of the filing of the prepaid limited health services contract form. No translation of a prepaid limited health services contract form may be approved by the office unless the translation accurately reflects the substance of the prepaid limited health services contract form in translation. (2) The text of all advertisements by a prepaid limited health service organization, if printed or broadcast in a language other than English, also must be available in English and must be furnished to the office upon request. As used in this subsection, the term “advertisement” means any advertisement, circular, pamphlet, brochure, or other printed material disclosing or disseminating advertising material or information by a prepaid limited health service organization to prospective or existing subscribers and includes any radio or television transmittal of an advertisement or information. History. — s. 12, ch. 93-148; s. 1528, ch. 2003-261. 636.0155 Disclosures required in contracts and marketing materials. All prepaid limited health services contracts, marketing materials, and literature printed after October 1, 1997, must disclose in boldfaced type the name of the organization and disclose that the organization is a prepaid limited health service organization licensed under this chapter. History. — s. 1, ch. 97-65. 636.016 Prepaid limited health service contracts. For any entity licensed prior to October 1, 1993, all subscriber contracts in force at such time shall be in compliance with this section upon renewal of such contract. (1) Any entity issued a certificate of authority and otherwise in compliance with this act may enter into contracts in this state to provide an agreed-upon set of limited health services to subscribers in exchange for a prepaid per capita sum or a prepaid aggregate fixed sum. (a) The office shall disapprove any form filed under this subsection, or withdraw any previous approval thereof, if the form: 1. Is in any respect in violation of, or does not comply with, any provision of this act or rule adopted thereunder. 2. Contains or incorporates by reference, where such incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract. 3. Has any title, heading, or other indication of its provisions which is misleading. 4. Is printed or otherwise reproduced in such a manner as to render any material provision of the form substantially illegible. 5. Contains provisions which are unfair, inequitable, or contrary to the public policy of this state or which encourage misrepresentation. 6. Charges rates that are determined by the office to be inadequate, excessive, or unfairly discriminatory, or if the rating methodology followed by the prepaid limited health service organization is determined by the office to be inconsistent with the provisions of s. 636.017. (b) It is not the intent of this subsection to restrict unduly the right to modify rates in the exercise of reasonable business judgment. (c) All contracts shall be for a minimum period of 12 months, unless the contract holder requests, in writing, a shorter contract period. (2) Every prepaid limited health service organization shall provide each subscriber a contract, a certificate, membership card, or member handbook which must clearly state all of the services to which a subscriber is entitled under the contract and must include a clear and understandable statement of any limitations on the services or kinds of services to be provided, including any copayment feature or schedule of benefits required by the contract or by any insurer or entity which is underwriting any of the services offered by the prepaid limited health service organization. The contract, certificate, provider listing, or member handbook must also state where and in what manner the health services may be obtained. (3) The documents provided pursuant to subsection (2) must have a clear and understandable description of the method used by the prepaid limited health service organization for resolving subscriber grievances and, for such documents printed after October 1, 1998, must contain the address of the department and the department’s toll-free consumer hotline. (4) The rate of payment for a prepaid limited health services contract sold on an individual basis must be a part of the contract and must be stated in individual contracts issued to subscribers. (5) All prepaid limited health service coverage, benefits, or services for a member of the family of the subscriber must, as to such family member’s coverage, benefits, or services, provide also that the coverage, benefits, or services applicable for children will be provided with respect to a preenrolled newborn child of the subscriber, or covered family member of the subscriber, from the moment of birth, or adoption pursuant to chapter 63. (6) No alteration of any written application for any prepaid limited health services contract may be made by any person other than the applicant without his or her written consent, except that insertions may be made by the prepaid limited health service organization for administrative purposes only, in such manner as to indicate clearly that such insertions are not to be ascribed to the applicant. (7) No contract may contain any waiver of rights or benefits provided to or available to subscribers under the provisions of any law or rule applicable to prepaid limited health service organizations. (8) Each document provided pursuant to subsection (2) must state that emergency services, if any, will be provided to subscribers in emergency situations not permitting treatment through the prepaid limited health service organization providers, without prior notification to and approval of the organization. The prepaid limited health services document must contain a definition of emergency services, describe procedures for determination by the prepaid limited health service organization of whether the services qualify for reimbursement as emergency services, and contain specific examples of what does constitute an emergency. (9)(a) All prepaid limited health services contracts, certificates, and member handbooks must contain the following provision: “Grace Period: This contract has a (insert number of days, but not less than 10 days) -day grace period. This provision means that if any required premium is not paid on or before the date it is due, it may be paid subsequently during the grace period. During the grace period, the contract will stay in force.” (b) Paragraph (a) does not apply to certificates or member handbooks delivered to individual subscribers under a group prepaid limited health services contract when the employer who will hold the contract on behalf of the subscriber group pays the entire premium for the individual subscriber. However, such required provision applies to the group prepaid limited health services contract. (10) The contract must clearly disclose the intent of the prepaid limited health service organization as to the applicability or nonapplicability of coverage to preexisting conditions. The contract must also disclose what services are excludable. (11) All prepaid limited health service organization contracts which provide coverage for a member of the family of the subscriber, must, as to such family member’s coverage, provide that coverage, benefits, or services applicable for children will be provided with respect to an adopted child of the subscriber, which child is placed in compliance with chapter 63, from the moment of placement in the residence of the subscriber. In the case of a newborn child, coverage begins from the moment of birth if a written agreement to adopt such child has been entered into by the subscriber prior to the birth of the child whether or not such agreement is enforceable. However, coverage for such child is not required if the child is not ultimately adopted by the subscriber in compliance with chapter 63. (12) Each prepaid limited health service organization shall provide prospective enrollees, upon request, with written information about the terms and conditions of the plan in accordance with subsection (2) to enable prospective enrollees to make informed decisions about accepting a managed-care system of limited health care delivery. All marketing materials printed by the prepaid limited health services organization, after October 1, 1997, must contain a notice in boldfaced type which states that the information required under this section is available to prospective enrollees upon request. (13) Each prepaid limited health service organization shall make available to all subscribers, upon request, a description of the authorization and referral process for services or a description of the process used to analyze the qualifications and credentials of providers under contract with the organization. History. — s. 13, ch. 93-148; s. 2, ch. 97-65; s. 485, ch. 97-102; s. 1, ch. 98-156; s. 1529, ch. 2003-261. 636.017 Rates and charges. (1) The rates charged by any prepaid limited health service organization to its subscribers shall not be excessive, inadequate, or unfairly discriminatory. The commission or office may require whatever information it deems necessary to determine that a rate or proposed rate meets the requirements of this section. (2) In determining whether a rate is in compliance with subsection (1), the office must take into consideration the limited services provided, the method in which the services are provided, and the method of provider payment. This section may not be construed as authorizing the commission to establish by rule minimum loss ratios for prepaid limited health service organizations’ rates. History. — s. 14, ch. 93-148; s. 1530, ch. 2003-261. 636.018 Changes in rates and benefits; material modifications; addition of limited health services. (1)(a) No prepaid limited health services contract, certificate of coverage, application, enrollment form, rider, endorsement, and applicable rates to be charged may be delivered in this state unless the forms and rates have been filed with the office by or on behalf of the prepaid limited health service organization and have been approved by the office. Every form filed shall be identified by a unique form number placed in the lower left corner of each form. If a prepaid limited health service organization desires to amend any contract with its subscribers or any certificate or member handbook, or desires to change any rate charged for the contract or to change any basic prepaid limited health services contract, certificate, grievance procedure, or member handbook form, or application form where written application is required and is to be made a part of the contract, or printed amendment, addendum, rider, or endorsement form or form renewal certificate, it must file such changes 30 days prior to the effective date of the proposed change. At least 30 days’ written notice must be provided to the subscriber before application of any approved change in rates. In the case of a group enrollee, there may be a contractual agreement with the prepaid limited health service organization to have the contract holder provide the required notice to the individual enrollees of the group. Any proposed change must contain information as required by s. 636.017. (b) The prepaid limited health service organization’s certification must be prepared by an independent actuary or a qualified employee. The chief executive officer of the prepaid limited health service organization must review and sign the certification indicating her or his agreement with its conclusions. Following receipt of notice of any disapproval or withdrawal of approval, no prepaid limited health service organization may issue or use any form disapproved by the office or as to which the office has withdrawn approval. (2) If such filings are disapproved, the office shall notify the prepaid limited health service organization and shall specify the reasons for disapproval in the notice. The prepaid limited health service organization has 21 days from the date of receipt of notice to request a hearing before the office pursuant to chapter 120. History. — s. 15, ch. 93-148; s. 486, ch. 97-102; s. 1531, ch. 2003-261. 636.019 Additional contract contents. A prepaid limited health services contract may contain additional provisions not inconsistent with this act which are: (1) Necessary because of the manner in which the organization is constituted or operated in order to state the rights and obligations of the parties to the contract; or (2) Desired by the organization and neither prohibited by law nor in conflict with any provisions required to be included. History. — s. 16, ch. 93-148. 636.0201 Genetic information restrictions. A prepaid limited health service organization must comply with the provisions of s. 627.4301. History. — s. 4, ch. 97-182. 636.022 Restrictions upon expulsion or refusal to issue or renew contract. A prepaid limited health service organization may not expel or refuse to renew the coverage of or refuse to enroll any individual member of a subscriber group on the basis of the race, color, creed, handicap, marital status, sex, or national origin of the subscriber or individual. A prepaid limited health service organization may not expel or refuse to renew the coverage of any individual member of a subscriber group on the basis of the age or health status of the subscriber or individual. For group solicitations, a prepaid limited health service organization may preunderwrite to determine group acceptability. However, once a contract is issued, a prepaid limited health service organization must provide coverage to all existing enrollees and their dependents, and newly employed enrollees and their dependents who have enrolled within 30 days of eligibility or membership. Late enrollees who apply during other than an open enrollment period may be subject to evidence of insurability requirements of the prepaid limited health service organization. Nothing in this section prohibits a prepaid limited health service organization from requiring that, as a condition of continued eligibility for membership, dependents of a subscriber upon reaching a specified age convert to a converted contract. Coverage must continue to be provided to handicapped children who are incapable of self-sustaining employment by reason of mental or physical handicap, and substantially dependent upon the enrollee for support and maintenance. History. — s. 17, ch. 93-148. 636.023 Charter; bylaw provisions. No prepaid limited health services contract may contain any provision purporting to make any portion of the articles of incorporation, charter, bylaws, or other organizational document of the prepaid limited health service organization a part of the contract unless the provision is set forth in full in the contract. Any contract provision in violation of this section is invalid unless the provision operates to the benefit of the subscriber. History. — s. 18, ch. 93-148. 636.024 Execution of contracts. (1) Every prepaid limited health services contract must be executed in the name of and on behalf of the prepaid limited health service organization by its officer, attorney in fact, employee, or representative duly authorized by the organization. (2) A facsimile signature of any executing individual may be used in lieu of an original signature. (3) No prepaid limited health services contract which is otherwise valid is rendered invalid by reason of the apparent execution thereof on behalf of the prepaid limited health service organization by the imprinted facsimile signature of an individual not authorized so to execute as of the date of the contract. History. — s. 19, ch. 93-148. 636.025 Validity of noncomplying contracts. (1) Any prepaid limited health services contract rider, endorsement, attachment, or addendum otherwise valid which contains any condition or provision not in compliance with the requirements of this act is not thereby rendered invalid, but must be construed and applied in accordance with such conditions and provisions as they would have applied had such contract, rider, endorsement, attachment, or addendum been in full compliance with this act. If an organization issues or delivers any contract for an amount which exceeds any limitations otherwise provided in this act, such organization is liable to the subscriber or his or her beneficiary for the full amount stated in the contract in addition to any other penalties that may be imposed under this act. (2) Any prepaid limited health services contract delivered or issued for delivery in this state covering a subscriber, which subscriber pursuant to the provisions of this act the organization may not lawfully cover under the contract, is cancelable at any time by the organization, any provision of the contract to the contrary notwithstanding, and the organization must promptly cancel the contract in accordance with the request of the office therefor. No such illegality or cancellation may be deemed to relieve the organization of any liability incurred by it under the contract while in force or to prohibit the organization from retaining the pro rata earned premium or rate thereon. This subsection does not relieve the organization from any penalty otherwise incurred by the organization under this act for any such violation. History. — s. 20, ch. 93-148; s. 487, ch. 97-102; s. 1532, ch. 2003-261. 636.026 Construction of contracts. Every prepaid limited health services contract must be construed according to the entirety of its terms and conditions as set forth in the contract and as amplified, extended, or modified by any application, endorsement, attachment, or addendum. History. — s. 21, ch. 93-148. 636.027 Delivery of contract. Unless delivered upon execution or issuance, a prepaid limited health services contract, certificate of coverage, or member handbook must be mailed or delivered to the subscriber or, in the case of a group prepaid limited health services contract, to the employer or other person who will hold the contract on behalf of the subscriber group, prior to the effective date of coverage by the prepaid limited health service organization. However, if the employer who will hold the contract on behalf of the subscriber group requires retroactive enrollment of a subscriber, the organization must deliver the contract certificate or member handbook to the subscriber within 10 days after receiving notice from the employer of the retroactive enrollment. History. — s. 22, ch. 93-148. 636.028 Notice of cancellation of contract. Except for nonpayment of premium or termination of eligibility, a prepaid limited health service organization may not cancel or otherwise terminate or fail to renew a prepaid limited health services contract without giving the subscriber at least 45 days’ notice in writing of the cancellation, termination, or nonrenewal of the contract. The written notice must state the reason or reasons for the cancellation, termination, or nonrenewal. The only reasons for cancellation at such time other than the renewal period shall be as follows: (1) The subscriber’s behavior is disruptive, unruly, abusive, unlawful, fraudulent, or uncooperative to the extent that the subscriber’s continuing participation seriously impairs the organization’s ability to provide services to other subscribers. (2) Fraud or material misrepresentation in applying for or presenting any claim for benefits under the contract. (3) Misuse of the documents provided as evidence of benefits available pursuant to the contract. (4) Furnishing to the organization, by the subscriber, incorrect or incomplete information for the purposes of fraudulently obtaining services. Prior to disenrollment, the organization must make an effort to resolve the problem through the grievance procedure and must determine that the subscriber’s behavior is not due to use of the services provided or mental illness. All prepaid limited health services contracts must contain a clause which requires that this notice be given. In the case of a prepaid limited health services contract issued to an employer holding the contract on behalf of the subscriber group, the prepaid limited health service organization may make the notification through the employer, and, if the prepaid limited health service organization elects to take this action through the employer, the organization shall be deemed to have complied with the provisions of this section upon notifying the employer of the requirements of this section and requesting the employer to forward the required notice to all subscribers. History. — s. 23, ch. 93-148. 636.029 Construction and relationship with other laws. (1) No other provision of the insurance code applies to a prepaid limited health service organization unless such an organization is specifically mentioned therein. (2) Except as provided in this act, the insurance code does not apply to prepaid limited health service organizations certificated under this act. Any person, entity, or prepaid limited health service organization operating without a subsisting certificate of authority in violation of this act or rules adopted thereunder, in addition to being subject to the provisions of this act, is subject to the provisions of the insurance code. (3) The department and office are vested with all powers granted to them under the insurance code with respect to the investigation of any violation of this act within their respective regulatory jurisdictions. History. — s. 24, ch. 93-148; s. 1533, ch. 2003-261; s. 131, ch. 2004-5. 636.032 Acceptable payments. (1) Each prepaid limited health service organization may accept from government agencies, corporations, groups, or individuals payments covering all or part of the cost of contracts entered into between the prepaid limited health service organization and its subscribers. (2)(a) A contract between a prepaid limited health service organization and a dentist licensed under chapter 466 for the provision of services to a subscriber may not specify credit card payment as the only acceptable method for payments from the prepaid limited health service organization to the dentist. (b) When a prepaid limited health service organization employs the method of claims payment to a dentist through electronic funds transfer, including, but not limited to, virtual credit card payment, the prepaid limited health service organization shall notify the dentist as provided in this paragraph and obtain the dentist’s consent before employing the electronic funds transfer. The dentist’s consent described in this paragraph applies to the dentist’s entire practice. For the purpose of this paragraph, the dentist’s consent, which may be given through e-mail, must bear the signature of the dentist. Such signature includes an electronic or digital signature if the form of signature is recognized as a valid signature under applicable federal law or state contract law or an act that demonstrates express consent, including, but not limited to, checking a box indicating consent. The prepaid limited health service organization or dentist may not require that a dentist’s consent as described in this paragraph be made on a patient-by-patient basis. The notification provided by the prepaid limited health service organization to the dentist must include all of the following: 1. The fees, if any, that are associated with the electronic funds transfer. 2. The available methods of payment of claims by the prepaid limited health service organization, with clear instructions to the dentist on how to select an alternative payment method. (c) A prepaid limited health service organization that pays a claim to a dentist through Automatic Clearing House transfer may not charge a fee solely to transmit the payment to the dentist unless the dentist has consented to the fee. (d) This subsection applies to contracts delivered, issued, or renewed on or after January 1, 2025. (e) The office has all rights and powers to enforce this subsection as provided by s. 624.307. (f) The commission may adopt rules to implement this subsection. History. — s. 25, ch. 93-148; s. 2, ch. 2024-196. 636.033 Certain words prohibited in name of organization. (1) No entity certificated as a prepaid limited health service organization, other than a licensed insurer or health maintenance organization insofar as its name is concerned, may use in its name, contracts, or literature any of the words “insurance,” “casualty,” “surety,” “mutual,” or “HMO,” or any other words descriptive of the insurance, casualty, HMO, or surety business or deceptively similar to the name or description of any insurance, HMO, or surety corporation doing business in the state. (2) No person, entity, or health care plan not certificated under the provisions of this act may use in its name, logo, contracts, or literature the phrase “prepaid limited health services contract” or the initials “PLHSC” to imply, directly or indirectly, that it is a prepaid limited health service organization or hold itself out to be a prepaid limited health service organization. History. — s. 26, ch. 93-148. 636.034 Extension of benefits. Every prepaid limited health services contract must provide that termination of the contract by the prepaid limited health service organization is without prejudice to any continuous loss which commenced while the contract was in force. Extension of benefits beyond the period the contract was in force must be until the specific treatment or procedure undertaken upon any subscriber has been completed or for 90 days, whichever is the lesser period of time. History. — s. 27, ch. 93-148. 636.035 Provider arrangements. (1) Whenever a contract exists between a prepaid limited health service organization and a provider, and the organization fails to meet its obligations to pay fees for services already rendered to a subscriber who is in good standing, the prepaid limited health service organization is liable for such fee or fees rather than the subscriber, and the contract must so state. (2) No subscriber, who is in good standing, of a prepaid limited health service organization is liable to any provider of health care services for any services covered by the prepaid limited health service organization. (3) No provider of prepaid limited health care services or any representative of such provider may collect or attempt to collect from a subscriber any money for services covered by a prepaid limited health service organization, and no provider or representative of such provider may maintain any action against a subscriber of a prepaid limited health service organization to collect money owed to such provider by a prepaid limited health service organization. (4) Every contract between a prepaid limited health service organization and a provider of health care services must be in writing and must contain a provision that the subscriber is not liable to the provider for any services covered by the subscriber’s or enrollee’s contract with the prepaid limited health service organization. (5) The provisions of this section do not apply to the amount of any deductible or copayment which is not covered by the contract, or for services not authorized by the prepaid limited health service organization. (6) For all provider contracts executed after October 1, 1993, and within 180 days after October 1, 1993, for contracts in existence as of October 1, 1993: (a) The contracts must provide that the provider will provide no less than 90 days’ advance written notice to the prepaid limited health service organization before canceling the contract with the prepaid limited health service organization for any reason. (b) The contract must also provide that nonpayment for goods or services rendered by the provider to the prepaid limited health service organization shall not be a valid reason for avoiding the 90-day advance notice of cancellation. (c) For all provider contracts in force on October 1, 1993, the organization shall be responsible for notifying all providers of the provisions of this section and their responsibilities under this part. (7) Upon receipt by the prepaid limited health service organization of a 90-day cancellation notice, the prepaid limited health service organization may, if requested by the provider, terminate the contract in less than 90 days if the prepaid limited health service organization is not financially impaired or insolvent. (8) Provider contracts executed after October 1, 1997, and within 180 days after October 1, 1997, for all contracts in existence on October 1, 1997, must provide that the prepaid limited health service organization will provide 90 days’ advance written notice to the provider before canceling, without cause, the contract with the provider, except where a patient’s health is subject to imminent danger or a provider’s ability to practice is effectively impaired by an action by the Board of Dentistry or another governmental agency. (9) Every contract between a prepaid limited health service organization and a provider of health care services must contain a provision that if any provision of the agreement is held to be unenforceable or otherwise contrary to any applicable laws, regulations, or rules, such provision shall have no effect and shall be severable without affecting the validity or enforceability of the remaining provisions of this agreement. This subsection applies to policies issued or renewed after October 1, 1997. (10) A contract between a prepaid limited health service organization and a provider of limited health care services may not contain any provision restricting the provider’s ability to communicate information to the provider’s patient regarding care or treatment options for the patient when the provider deems knowledge of such information by the patient to be in the best interest of the health of the patient. (11) A contract between a prepaid limited health service organization and a provider of limited health services may not contain any provision that in any way prohibits or restricts the limited health service provider from entering into or renewing a contract with any other prepaid limited health service organization. This subsection applies to all contracts entered into or renewed on or after July 1, 2009. (12) A prepaid limited health service organization may not require, as a condition of continuation or renewal of a contract, a contracted limited health service provider to accept the terms of other health care practitioner contracts with the prepaid limited health service organization or any insurer or other limited health service organization under common management and control with the prepaid limited health service organization, including, but not limited to, Medicare and Medicaid practitioner contracts and those authorized by s. 627.6471, s. 627.6472, s. 641.315, or this section, except for a practitioner in a group practice as defined in s. 456.053 who must accept the terms of a contract negotiated for the practitioner by the group. Any contract provision that violates this subsection is void. A violation of this subsection is not subject to the criminal penalty specified in s. 624.15. This subsection applies to all contracts entered into or renewed on or after July 1, 2009. (13) A contract between a prepaid limited health service organization and a dentist licensed under chapter 466 for the provision of services to a subscriber of the prepaid limited health service organization may not contain a provision that requires the dentist to provide services to the subscriber of the prepaid limited health service organization at a fee set by the prepaid limited health service organization unless such services are covered services under the applicable contract. As used in this subsection, the term “covered services” means dental care services for which a reimbursement is available under the subscriber’s contract, or for which a reimbursement would be available but for the application of contractual limitations such as deductibles, coinsurance, waiting periods, annual or lifetime maximums, frequency limitations, alternative benefit payments, or any other limitation. (14)(a) A prepaid limited health service organization may not require an ophthalmologist licensed pursuant to chapter 458 or chapter 459 or an optometrist licensed pursuant to chapter 463 to join a network solely for the purpose of credentialing the licensee for another organization’s vision network. This paragraph does not prevent such organization from entering into a contract with another organization’s vision care plan to use the vision network. (b) A prepaid limited health service organization may not restrict an ophthalmologist licensed pursuant to chapter 458 or chapter 459, an optometrist licensed pursuant to chapter 463, or an optician licensed pursuant to part I of chapter 484 to specific suppliers of materials or optical laboratories. This paragraph does not restrict such organization in determining specific amounts of coverage or reimbursement for the use of network or out-of-network suppliers or laboratories. (c) A prepaid limited health service organization’s online vision care network provider directory must be updated monthly to reflect the vision care providers currently participating in the organization’s network. (d) A knowing violation of paragraph (a) or paragraph (b) constitutes an unfair insurance trade practice under s. 626.9541(1)(d). (15)(a) A prepaid limited health service organization may not deny any claim subsequently submitted by a dentist licensed under chapter 466 for procedures specifically included in a prior authorization unless at least one of the following circumstances applies for each procedure denied: 1. Benefit limitations, such as annual maximums and frequency limitations not applicable at the time of the prior authorization, are reached subsequent to issuance of the prior authorization. 2. The documentation provided by the person submitting the claim fails to support the claim as originally authorized. 3. Subsequent to the issuance of the prior authorization, new procedures are provided to the patient or a change in the condition of the patient occurs such that the prior authorized procedure would no longer be considered medically necessary, based on the prevailing standard of care. 4. Subsequent to the issuance of the prior authorization, new procedures are provided to the patient or a change in the patient’s condition occurs such that the prior authorized procedure would at that time have required disapproval pursuant to the terms and conditions for coverage under the patient’s plan in effect at the time the prior authorization was issued. 5. The denial of the dental service claim was due to one of the following: a. Another payor is responsible for payment. b. The dentist has already been paid for the procedures identified in the claim. c. The claim was submitted fraudulently, or the prior authorization was based in whole or material part on erroneous information provided to the prepaid limited health service organization by the dentist, patient, or other person not related to the organization. d. The person receiving the procedure was not eligible to receive the procedure on the date of service. e. The services were provided during the grace period established under s. 627.608 or applicable federal regulations, and the dental insurer notified the provider that the patient was in the grace period when the provider requested eligibility or enrollment verification from the dental insurer, if such request was made. (b) This subsection applies to all contracts delivered, issued, or renewed on or after January 1, 2025. (c) The office has all rights and powers to enforce this subsection as provided by s. 624.307. (d) The commission may adopt rules to implement this subsection. History. — s. 28, ch. 93-148; s. 3, ch. 97-65; s. 2, ch. 2009-41; s. 2, ch. 2014-64; s. 2, ch. 2016-69; s. 3, ch. 2024-196. 636.036 Administrative, provider, and management contracts. (1) The office may require a prepaid limited health service organization to submit any contract for administrative services, contract with a provider physician, contract for management services, or contract with an affiliated entity to the office if the office has information that the prepaid limited health service organization has entered into a contract which requires it to pay a fee which is unreasonably high in relation to the service provided. (2) After review of a contract, the office may order the prepaid limited health service organization to cancel the contract if it determines that the fees to be paid by the prepaid limited health service organization under the contract are so unreasonably high as compared with similar contracts entered into by the prepaid limited health service organization in similar circumstances that the contract is detrimental to the subscribers, stockholders, investors, or creditors of the prepaid limited health service organization. (3) All contracts for administrative services, management services, or provider services or contracts with affiliated entities, entered into or renewed by a prepaid limited health service organization on or after October 1, 1993, must contain a provision that the contract will be canceled upon issuance of an order by the office pursuant to this section. History. — s. 29, ch. 93-148; s. 1534, ch. 2003-261. 636.037 Contract providers. Each prepaid limited health service organization must, upon the request of the office, file financial statements for all contract providers of limited health care services who have assumed through capitation or other means more than 10 percent of the health care risks of the prepaid limited health service organization. History. — s. 30, ch. 93-148; s. 1535, ch. 2003-261. 636.038 Complaint system; annual report. (1) Every prepaid limited health service organization must establish and maintain a complaint system providing reasonable procedures for resolving written complaints initiated by enrollees and providers. This section does not preclude an enrollee or a provider from filing a complaint with the department or office or limit the department’s or office’s ability to investigate such complaints. (2) Every prepaid limited health service organization shall report annually to the department and office the total number of grievances handled, a categorization of the cases underlying the grievances, and the final disposition of the grievances. History. — s. 31, ch. 93-148; s. 2, ch. 98-156; s. 1536, ch. 2003-261. 636.039 Examination by the office. The office shall examine the affairs, transactions, accounts, business records, and assets of any prepaid limited health service organization, in the same manner and subject to the same terms and conditions that apply to insurers under part II of chapter 624, as often as it deems it expedient for the protection of the people of this state, but not less frequently than once every 3 years. In lieu of making its own financial examination, the office may accept an independent certified public accountant’s audit report prepared on a statutory accounting basis consistent with this act. However, except when the medical records are requested and copies furnished pursuant to s. 456.057, medical records of individuals and records of physicians providing service under contract to the prepaid limited health service organization are not subject to audit, but may be subject to subpoena by court order upon a showing of good cause. For the purpose of examinations, the office may administer oaths to and examine the officers and agents of a prepaid limited health service organization concerning its business and affairs. The expenses of examination of each prepaid limited health service organization by the office are subject to the same terms and conditions as apply to insurers under part II of chapter 624. Expenses of all examinations of a prepaid limited health service organization may never exceed a maximum of $20,000 for any 1-year period. History. — s. 32, ch. 93-148; s. 160, ch. 98-166; s. 221, ch. 2000-160; s. 1537, ch. 2003-261. 636.042 Assets, liabilities, and investments. Section 641.35 applies in its entirety to determine what assets, liabilities, and investments are acceptable for a prepaid limited health service organization. History. — s. 33, ch. 93-148. 636.043 Annual, quarterly, and miscellaneous reports. (1) Each prepaid limited health service organization must file with the office annually, within 3 months after the end of its fiscal year, a report verified by the oath of at least two officers covering the preceding calendar year. Any organization licensed prior to October 1, 1993, shall not be required to file a financial statement, as required by paragraph (2)(a), based on statutory accounting principles until the first annual report for fiscal years ending after December 31, 1994. (2) Such report must be on forms prescribed by the commission and must include: (a)1. A statutory financ