# Title 26.1 — Insurance

## Chapter 26.1-47 — Preferred Provider Organizations

### § 26.1-47-01. Definitions.

As used in this chapter, unless the context indicates otherwise:
1. "Air ambulance" means a specially equipped aircraft licensed by the department of
health and human services for transporting patients.
2. "Air ambulance provider" means a publicly or privately owned organization that is
licensed or applies for licensure by the department of health and human services to
provide transportation and care of patients by air ambulance.
3. "Authorized representative" means:
a. A person to which a covered person has given express written consent to
represent the covered person;
b. A person authorized by law to provide substituted consent for a covered person;
or
c. If a covered person is unable to provide consent, the covered person's treating
health care professional or a family member of the covered person.
4. "Balance billing" means the practice of an air ambulance provider billing for the
difference between the air ambulance provider's charge and the health care insurer's
allowed amount.
5. "Commissioner" means the insurance commissioner of the state of North Dakota.
6. "Covered person" means an individual on whose behalf the health care insurer is
obligated to pay for or provide health care services.
7. "Facility" means an institution or other immobile health care setting providing physical,
mental, or behavioral health care services.
8. "Health benefit plan" means the health insurance policy or subscriber agreement
between the covered person or the policyholder and the health care insurer which
defines the services covered.
9. "Health care insurer" includes an insurance company as defined in section 26.1-02-01,
a health service corporation as defined in section 26.1-17-01, a health maintenance
organization as defined in section 26.1-18.1-01, and a fraternal benefit society as
defined in section 26.1-15.1-02.
10. "Health care provider" means licensed providers of health care services in this state.
11. "Health care services" means services rendered or products sold by a health care
provider within the scope of the provider's license. The term includes hospital, medical,
surgical, dental, vision, chiropractic, and pharmaceutical services or products.
12. "Network" means a group of preferred providers providing services under a network
plan.
13. "Network plan" means a health benefit plan that requires a covered person to use, or
creates incentives, including financial incentives, for a covered person to use health
care providers managed by, owned by, under contract with, or employed by the health
care insurer.
14. "Out-of-network" means a provider that is not providing the service under a network
plan.
15. "Preferred provider" means a duly licensed health care provider or group of providers
who have contracted with the health care insurer, under this chapter, to provide health
care services to covered persons under a health benefit plan.
16. "Preferred provider arrangement" means a contract between the health care insurer
and one or more health care providers which complies with all the requirements of this
chapter.
17. "Prior authorization" means confirmation by the covered person's health care insurer
that the air ambulance services sought to be provided by the air ambulance provider
meet the criteria for coverage under the covered person's health benefit plan as
defined by the provisions of the covered person's health benefit plan.
### § 26.1-47-02. Preferred provider arrangements.


Notwithstanding any provision of law to the contrary, any health care insurer may enter into
preferred provider arrangements.
1. Preferred provider arrangements must:
a. Establish the amount and manner of payment to the preferred provider. The
amount and manner of payment may include capitation payments for preferred
providers.
b. Include mechanisms, subject to the minimum standards imposed by chapter
26.1-26.4, which are designed to review and control the utilization of health care
services and establish a procedure for determining whether health care services
rendered are medically necessary.
c. Include mechanisms which are designed to preserve the quality of health care.
d. With regard to an arrangement in which the preferred provider is placed at risk for
the cost or utilization of health care services, specifically include a description of
the preferred provider's responsibilities with respect to the health care insurer's
applicable administrative policies and programs, including utilization review,
quality assessment and improvement programs, credentialing, grievance
procedures, and data reporting requirements. Any administrative responsibilities
or costs not specifically described or allocated in the contract establishing the
arrangement as the responsibility of the preferred provider are the responsibility
of the health care insurer.
e. Provide that in the event the health care insurer fails to pay for health care
services as set forth in the contract, the covered person is not liable to the
provider for any sums owed by the health care insurer.
f. Provide that in the event of the health care insurer insolvency, services for a
covered person continue for the period for which premium payment has been
made and until the covered person's discharge from inpatient facilities.
g. Provide that either party terminating the contract without cause provide the other
party at least sixty days' advance written notice of the termination.
2. Preferred provider arrangements may not unfairly deny health benefits to persons for
covered medically necessary services.
3. Preferred provider arrangements may not restrict a health care provider from entering
into preferred provider arrangements or other arrangements with other health care
insurers.
4. A health care insurer must file all its preferred provider arrangements with the
commissioner within ten days of implementing the arrangements. If the preferred
provider arrangement does not meet the requirements of this chapter, the
commissioner may declare the contract void and disapprove the preferred provider
arrangement in accordance with the procedure for policies set out in chapter 26.1-30.
5. A preferred provider arrangement may not offer an inducement to a preferred provider
to provide less than medically necessary services to a covered person. This
subsection does not prohibit a preferred provider arrangement from including
capitation payments or shared-risk arrangements authorized under subdivision a of
subsection 1 which are not tied to specific medical decisions with respect to a patient.
6. A health care insurer may not penalize a provider because the provider, in good faith,
reports to state or federal authorities any act or practice by the health care insurer
which jeopardizes patient health or welfare.
### § 26.1-47-02.1. Fees for dental services - Prohibition.

1. As used in this section, "covered services" means dental care services for which a
reimbursement is available under an enrollee's plan or for which a reimbursement
would be available but for the application of a deductible, copayment, coinsurance,
waiting period, annual or lifetime maximum, or frequency limitation.
2. Except for fees for covered services, a preferred provider arrangement for a dental
plan may not directly or indirectly set or otherwise regulate the fees charged by the
preferred provider for dental care services.

3. A preferred provider arrangement may not restrict a covered person from receiving or
paying for additional dental care services that were denied by the covered person's
dental plan.
4. Unless disclosed to the covered person before receiving dental care, a covered person
receiving or paying for additional dental care services described in subsection 3 may
not be charged a rate in excess of the preferred provider arrangement's contracted
rate for covered services.
### § 26.1-47-02.2. Dental networks.

1. As used in this section:
a. "Affiliate" means a person that directly or indirectly through one or more
intermediaries controls, or is under the control of, or is under common control
with, the person specified.
b. "Contracting entity" means a person that enters a direct contract with a dental
provider for the delivery of dental services.
c. "Network" means a group of preferred dental providers providing services under a
network plan.
d. "Network plan" means a dental benefit plan that requires a covered individual to
use, or creates incentives, including financial incentives, for a covered individual
to use a dental provider managed by, owned by, under contract with, or employed
by the dental insurer.
e. "Third party" means an entity that is not a party to a contracting entity's dental
provider network.
2. A contracting entity may grant a third party access to a dental provider network
contract, or a provider's dental services or contractual discounts provided pursuant to
a dental provider network contract, if all of the following are met:
a. The contract specifically states the contracting entity may enter an agreement
with a third party allowing the third party to obtain the contracting entity's rights
and responsibilities as if the third party were the contracting entity.
b. If the contracting entity is a dental insurer, the dental provider may opt out of the
third-party access at the time the dental provider network contract was entered or
renewed.
c. The contracting entity identifies, in writing or electronic form to the dental
provider, all third parties in existence as of the date the contract is entered or
renewed.
d. The contracting entity notifies dental network providers that a new third party is
leasing or purchasing the network at least thirty days in advance of the
relationship taking effect.
e. The contracting entity makes available a copy of the dental provider network
contract relied on in the adjudication of a claim to a participating dental provider
within thirty days of a request from the dental provider.
3. A dental provider's refusal to agree in writing to the third-party access to the dental
provider network does not permit the contracting entity to end the contractual
relationship with the dental provider.
4. The provisions of this section do not apply if access to a provider network contract is
granted to a dental carrier or an entity operating in accordance with the same brand
licensee program as the contracting entity or to an entity that is an affiliate of the
contracting entity.
### § 26.1-47-02.3. Postpayment of dental claims - Payment recovery limitations.

1. As used in this section, "dental care provider" means a licensed provider of dental care
services in this state.
2. Other than recovery for duplicate payments, a dental insurer, if engaging in
overpayment recovery efforts, shall provide written notice to the dental care provider
which identifies the error made in the processing or payment of the claim and justifies
the overpayment recovery.

3. A dental insurer shall provide a dental care provider with the opportunity to challenge
an overpayment recovery, including the sharing of claims information, and shall
establish written policies and procedures for a dental care provider to follow to
challenge an overpayment recovery.
4. A dental insurer may not initiate overpayment recovery efforts more than twelve
months after the original payment for the claim was made. This time limit does not
apply to overpayment recovery efforts that are:
a. Based on reasonable belief of fraud, abuse, or other intentional misconduct;
b. Required by, or initiated at the request of, a self-insured plan; or
c. Required by a state or federal government plan.
### § 26.1-47-02.4. Method of dental payment option.

1. A preferred provider arrangement may not include restrictions on methods of payment
from the dental insurer or third-party payor vendor to the dental provider in which the
only acceptable payment method is a credit card payment.
2. If initiating or changing payments to a dental provider using electronic funds transfer
payments, including virtual credit card payments, a dental insurer or the contracted
vendor shall:
a. Notify the dental provider if any fees are associated with a particular payment
method;
b. Advise the dental provider of the available methods of payment and provide clear
instructions to the dental provider as to how to select an alternative payment
method that does not impose fees or similar charges on the provider; and
c. Notify the dental provider if the dental insurer is sharing a part of the profit of the
fee charged by the credit card company to pay the claim.
3. A dental provider or a contracted vendor, which initiates or changes payments to a
dental provider through the automated clearinghouse network, under title 45, Code of
Federal Regulations, sections 162.1601 and 162.1602, may not charge a fee solely to
transmit the payment to a dental provider unless the dental provider has consented to
the fee. A dental provider's agent may charge reasonable fees if transmitting an
automated clearinghouse network payment related to transaction management, data
management, portal services, and other value-added services in addition to the bank
transmittal.
4. As used in this section, "dental insurer" and "dental provider" have the same meaning
as in section 26.1-36.9-01.
### § 26.1-47-03. Health benefits plans.

1. Health care insurers may issue policies or subscriber agreements which provide for
incentives for covered persons to use the health care services of preferred providers.
These policies or subscriber agreements must contain all of the following provisions:
a. A provision that if a covered person receives emergency care and cannot
reasonably reach a preferred provider that care will be reimbursed as though the
covered person had been treated by a preferred provider.
b. A provision that if covered services are not available through a preferred provider,
reimbursement for those services will be made as though the covered person had
been treated by a preferred provider.
c. A provision which clearly discloses differentials between benefit levels for health
care services of preferred providers and benefit levels for health care services of
other providers.
d. A provision that entitles the covered person, if any health care services covered
under the health benefit plan are not available through a preferred provider within
fifty miles [80.47 kilometers] of the policyholder's legal residence, to the provision
of those covered services under the health benefit plan by a health care provider
not under contract with the health care insurer and located within fifty miles [80.47
kilometers] of the policyholder's legal residence. For the covered person to be
eligible for benefits under this subdivision, the health care provider not under

contract with the health care insurer must furnish the health care services at the
same cost or less that would have been incurred had the covered person secured
the health care services through a preferred provider.
2. If the policy or subscriber agreement provides differences in benefit levels payable to
preferred providers compared to other providers, the differences may not unfairly deny
payment for covered services and may be no greater than necessary to provide a
reasonable incentive for covered persons to use the preferred provider.
### § 26.1-47-04. Preferred provider participation requirements.

Health care insurers may place reasonable limits on the number of classes of preferred
providers which satisfy the standards set forth by the health care insurer, provided that there be
no discrimination against any providers on the basis of religion, race, color, national origin, age,
sex, or marital status, and further provided that selection of preferred providers is made on the
combined basis of least cost and highest quality of service.
### § 26.1-47-04.1. Maintenance of certification.

1. As used in this section, the terms "continuing medical education", "maintenance of
certification", "physician", and "specialty medical board certification" have the same
meaning as provided under section 23-16-18.
2. A health care insurer may not deny reimbursement to or prevent a physician from
being a preferred provider based solely on a physician's decision to not participate in
maintenance of certification, including basing a physician's network participation on
any form of maintenance of certification participation or status.
3. A health care insurer may not discriminate with respect to reimbursement levels based
solely on a physician's decision to not participate in any form of maintenance of
certification.
### § 26.1-47-05. General requirements.

Health care insurers complying with this chapter are subject to all other applicable laws,
rules, and regulations of this state.
### § 26.1-47-06. Rules.

The commissioner may adopt rules necessary to enforce and administer this chapter.
### § 26.1-47-07. Penalty.

The commissioner may levy an administrative penalty not to exceed ten thousand dollars
for a violation of this chapter.
### § 26.1-47-08. Air ambulance subscription agreements - Prohibition.

An air ambulance provider, or an agent of an air ambulance provider, may not sell, solicit, or
negotiate a subscription agreement or contract relating to services or the billing of services
provided by an air ambulance provider. An air ambulance provider, or agent of an air ambulance
provider, which violates this section is subject to a civil fine in an amount not to exceed ten
thousand dollars for each violation. The fine may be collected and recovered in an action
brought in the name of the state.
### § 26.1-47-09. Air ambulances.

1. A health benefit plan may not be issued in this state unless the plan provides the
reimbursement rate for out-of-network air ambulance provider services is equal to the
average of the insurer's in-network rates for air ambulance providers in the state.
2. An insurer may not use the average of an insurer's in-network rates for air ambulance
providers in the state in order to decrease current or future contractual rates between
an insurer and an air ambulance provider.
3. For purposes of settling a claim made by the insured for air ambulance services, a
payment made by an insurer under the plan in compliance with this section is deemed

to be the same as an in-network payment and is considered a full and final payment by
the insured for out-of-network air ambulance services billed to the insured.
4. This section does not apply to a policy or certificate of insurance, whether written on a
group or individual basis, which provides coverage limited to:
a. A specified disease, a specified accident, or accident-only coverage;
b. Credit;
c. Dental;
d. Disability;
e. Hospital;
f. Long-term care insurance as defined by chapter 26.1-45;
g. Vision care or any other limited supplemental benefit;
h. A Medicare supplement policy of insurance, as defined by the commissioner by
rule or coverage under a plan through Medicare;
i. Medicaid;
j. The federal employees health benefits program and any coverage issued as a
supplement to that coverage;
k. Coverage issued as supplemental to liability insurance, workers' compensation,
or similar insurance; or
l. Automobile medical payment insurance.
### § 26.1-47-10. Preferred provider arrangements - Requirements for accessing air

ambulance providers.
1. In addition to the other preferred provider arrangement requirements under this
chapter, a preferred provider arrangement must require the health care insurer and
health care provider comply with this section.
2. Except as otherwise provided under this section, before a health care provider
arranges for air ambulance services for an individual the health care provider knows to
be a covered person, the health care provider shall request a prior authorization from
the covered person's health care insurer for the air ambulance services to be provided
to the covered person. If the health care provider is unable to request or obtain prior
authorization from the covered person's health care insurer:
a. The health care provider shall provide the covered person or the covered
person's authorized representative an out-of-network services written disclosure
stating the following:
(1) Certain air ambulance providers may be called upon to render care to the
covered person during the course of treatment;
(2) These air ambulance providers might not have contracts with the covered
person's health care insurer and are, therefore, considered to be out of
network;
(3) If these air ambulance providers do not have contracts with the covered
person's health care insurer, the air ambulance services will be provided on
an out-of-network basis;
(4) A description of the range of the charges for the out-of-network air
ambulance services for which the covered person may be responsible;
(5) A notification the covered person or the covered person's authorized
representative may agree to accept and pay the charges for the
out-of-network air ambulance services, contact the covered person's health
care insurer for additional assistance, or rely on other rights and remedies
that may be available under state or federal law; and
(6) A statement indicating the covered person or the covered person's
authorized representative may obtain a list of air ambulance providers from
the covered person's health care insurer which are preferred providers and
the covered person or the covered person's representative may request
those participating air ambulance providers be accessed by the health care
provider.

b. Before air ambulance services are accessed for the covered person, the health
care provider shall provide the covered person or the covered person's
authorized representative the written disclosure, as outlined by subdivision a and
obtain the covered person's or the covered person's authorized representative's
signature on the disclosure document acknowledging the covered person or the
covered person's authorized representative received the disclosure document
before the air ambulance services were accessed. If the health care provider is
unable to provide the written disclosure or obtain the signature required under
this subdivision, the health care provider shall document the reason, which may
include the health and safety of the patient. The health care provider
documentation satisfies the requirement under this subdivision.
3. The rights and remedies provided under this section to covered persons are in addition
to and may not preempt any other rights and remedies available to covered persons
under state or federal law.
4. The department shall enforce this section and shall report a violation of this section by
a facility to the department of health and human services.
5. This section does not apply to a policy or certificate of insurance, whether written on a
group or individual basis, which provides coverage limited to:
a. A specified disease, a specified accident, or accident-only coverage;
b. Credit;
c. Dental;
d. Disability;
e. Hospital;
f. Long-term care insurance as defined by chapter 26.1-45;
g. Vision care or any other limited supplemental benefit;
h. A Medicare supplement policy of insurance, as defined by the commissioner by
rule or coverage under a plan through Medicare;
i. Medicaid;
j. The federal employees health benefits program and any coverage issued as a
supplement to that coverage;
k. Coverage issued as supplemental to liability insurance, workers' compensation,
or similar insurance; or
l. Automobile medical payment insurance.
6. A health care provider is exempt from complying with this section if the health care
provider determines and documents that due to emergency circumstances,
compliance might jeopardize the health or safety of the patient.
7. The commissioner may adopt rules to implement this section.
### § 26.1-47-11. Rules - Air ambulance.

If an action of Congress, the president of the United States, or a federal agency allows the
state to regulate the rates, routes, or services of air ambulance providers, the commissioner
may adopt rules consistent with the action taken.
### § 26.1-47-12. Ambulance insurance coverage - Direct payment required - Determination

of reimbursement rate for out-of-network ambulance service providers.
1. As used in this section:
a. "Ambulance service provider" means a service entity licensed under chapter
23-27 as a basic life support or advanced life support ambulance service. The
term does not include an air ambulance provider.
b. "Covered person" means an individual eligible to receive coverage of covered
services by a health care insurer under a health benefit plan.
c. "Covered services" means medically necessary patient care or transportation
provided by ambulance service providers.
d. "Health care insurer" means an entity subject to state insurance regulation that
provides health benefit coverage in this state. The term includes:
(1) An insurance company;

(2) A health maintenance organization;
(3) A hospital or medical service corporation; and
(4) A risk-based provider organization.
e. "Medicare reimbursement rate" means the reimbursement rate for a particular
health care service provided under the Health Insurance for the Aged and
Disabled Act, title XVIII of the federal Social Security Act of 1965 [42 U.S.C.
1395 et seq.], as amended.
2. All reimbursements made by a health care insurer for the provision of ambulance
services to a covered person must be paid directly to the ambulance service provider
or the provider's designee.
3. If a covered person receives ambulance services from an out-of-network ambulance
service provider, the health care insurer shall pay the ambulance service provider the
lesser of:
a. Two hundred fifty percent of the Medicare reimbursement rate for the same
service in the same geographic area; or
b. The ambulance provider's billed charges.
4. Any rate the health care insurer pays under this section may not be required to include
the coinsurance, copayment, and deductible owed or already paid by the covered
person.
5. The insurance commissioner may adopt rules to implement and enforce this section.
