§ 62D.19 — Unreasonable Expenses
Plain-Language Summary
This section prohibits HMOs from paying unreasonably high expenses for services or goods. The commissioner enforces this through rules. When evaluating expenses paid to major participating entities, the commissioner considers whether the HMO's officers and trustees acted in good faith and in the best interests of the organization. The commissioner can sue HMO officers who breach their duty.
62D.19 UNREASONABLE EXPENSES.
No health maintenance organization shall incur or pay for any expense of any nature which is unreasonably high in relation to the value of the service or goods provided. The commissioner of health shall implement and enforce this section by rules adopted under this section.
In an effort to achieve the stated purposes of sections 62D.01 to 62D.30 and to ensure that the payment of health maintenance organization money to major participating entities results in a corresponding benefit to the health maintenance organization and its enrollees, when determining whether an organization has incurred an unreasonable expense in relation to a major participating entity, due consideration shall be given to, in addition to any other appropriate factors, whether the officers and trustees of the health maintenance organization have acted with good faith and in the best interests of the health maintenance organization in entering into, and performing under, a contract under which the health maintenance organization has incurred an expense. The commissioner has standing to sue, on behalf of a health maintenance organization, officers or trustees of the health maintenance organization who have breached their fiduciary duty in entering into and performing such contracts.
History:
1973 c 670 s 19; 1983 c 289 s 114 subd 1; 1984 c 464 s 41; 1984 c 655 art 1 s 92; 1Sp1985 c 10 s 62; 1987 c 384 art 2 s 1; 1988 c 612 s 26; 2017 c 2 art 2 s 8
History: History: 1973 c 670 s 19; 1983 c 289 s 114 subd 1; 1984 c 464 s 41; 1984 c 655 art 1 s 92; 1Sp1985 c 10 s 62; 1987 c 384 art 2 s 1; 1988 c 612 s 26; 2017 c 2 art 2 s 8