Brief ⁽¹⁾

HB 2115, as amended, relates to the Kansas Life and Health Insurance Guaranty Association Act and concerns the Kansas Life and Health Insurance Guaranty Association. The Association is an organization of member Kansas life and health insurers responsible for paying claims owed by an insolvent member insurer to the same extent that the insolvent member insurer would have been liable but for the insolvency.

The bill defines "provider," to be a person who is entitled to receive compensation for providing medical services to an insured covered by a member insurer of the Association whether or not the provider is obligated by law or agreement with the member insurer to hold the covered insured harmless from liability for services rendered. The definition of "person" also is amended to include a "provider."

Lastly, the bill directs the Kansas Life and Health Insurance Guaranty Association to pay any and all persons who, as a provider, may have claims as a result of a member insurer being found insolvent between March 1, 1999 and June 1, 1999.

The House Committee amendment adds "providers" to another statute in the act to clarify who is covered under the act.

Background

HB 2115, as amended, is supported by the Kansas Medical Society, the Kansas Hospital Association, and the Kansas Insurance Department whose representatives explained that the bill is a clarification of existing Kansas law rather than an addition to the law. Confronted with the Kansas Life and Health Insurance Guaranty Association's refusal to pay certain claims of providers arising out of the insolvency of one of its members, Heartland Health Plan, Inc., and the district court concurrence with the Association's refusal to pay, proponents asked that the original intent of the legislature to pay claims be clarified as proposed in the bill.

Further, advocates of the bill, believing their claims against the Association to be valid, since Heartland remains in liquidation, support the provision of the bill directing the Association to make payments to providers who extended services to insureds of Heartland.

The Kansas Life and Health Insurance Guaranty Association neither advocated for nor opposed the bill.

The fiscal note prepared by the Division of the Budget indicates passage of the bill would have no fiscal effect.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi