26-34-117. Prohibited practices.

(a) No health maintenance organization, or representative thereof, shall cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading or any form of evidence of coverage which is deceptive. For purposes of this chapter:

(i) A statement or item of information is:

(A) Untrue if it does not conform to fact in any respect which is or may be significant to an enrollee of or person considering enrollment with a health maintenance organization;

(B) Misleading, whether or not it may be literally untrue, if, in the total context in which the statement is made or the item of information is communicated, the statement or item of information may be reasonably understood by a reasonable person, not possessing special knowledge regarding health care coverage, as indicating any benefit or advantage or the absence of any exclusion, limitation or disadvantage of possible significance to an enrollee of, or person considering enrollment in a health maintenance organization if the benefit or advantage or absence of limitation, exclusion or disadvantage does not in fact exist.

(ii) An evidence of coverage is deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, is such as to cause a reasonable person, not possessing special knowledge regarding health maintenance organizations and evidences of coverage therefor, to expect benefits, services, premiums or other advantages which the evidence of coverage does not provide or which the health maintenance organization issuing the evidence of coverage does not regularly make available for enrollees covered under the evidence of coverage.

(b) Chapter 13 of this code applies to health maintenance organizations and evidences of coverage except to the extent that the commissioner determines that the nature of health maintenance organizations and evidences of coverage render that chapter, or any section thereof, clearly inappropriate.

(c) A health maintenance organization shall not cancel or refuse to review an enrollee, except for reasons stated in the organization's rules applicable to all enrollees or for the failure to pay the premiums for coverage, or for any other reasons the commissioner may specify by rule and regulation.

(d) No health maintenance organization unless licensed as an insurer shall refer to itself as an insurer or use a name deceptively similar to the name or description of any insurance or surety corporation doing business in the state.

(e) Any person not in possession of a valid certificate of authority issued pursuant to this chapter shall not use the phrase "health maintenance organization" or "HMO" in the course of operation.

(f) A health care maintenance organization shall not refuse to contract with or compensate for covered services an otherwise eligible health care provider solely because that provider has in good faith communicated with one (1) or more of his current, former or prospective patients regarding the provisions, terms or requirements of the organization's products as they related to the needs of that provider's patients.

(g) A health care maintenance organization shall not prohibit or restrict any health care provider from disclosing to any subscriber, enrollee or member any medically appropriate health care information the provider deems appropriate regarding the:

(i) Nature of treatment, risks or alternatives;

(ii) Decision of any plan to authorize or deny services;

(iii) Process used to authorize or deny health care services or benefits.