NON-PROFIT HOSPITAL SERVICE CORPORATIONS
Conditions to issuance or delivery of contract
Section 8. No contract between the subscriber and the corporation shall be issued or delivered in the commonwealth which provides full room and board benefits in an extended care facility for other than the period of hospitalization coverage provided, or which provides benefits for any service which is not medically necessary. No contract between the subscriber and the corporation shall be issued or delivered in the commonwealth unless it contains in substance the following provisions:
(a) A statement of the hospital services and reimbursement for other health services to be furnished by the corporation or its participating hospitals and the period during which they will be furnished, and, if any hospital services are excluded, a statement of such exception.
(b) A statement of the period of grace which will be allowed for making any payment due from the subscriber under its contract, which in any event shall not be less than ten days.
(c) A provision that the subscriber or any person claiming under a subscriber’s contract shall have a period of at least two years from the time the cause of action arises to bring suit thereon.
(d) A provision that any child who is mentally or physically incapable of earning his own living, who is covered under the membership of his parent as a member of a family group, shall be covered under the membership of his parent as a member of such family group so long as he continues to be mentally or physically incapable of earning his own living, without any limitation as to age, subject however, to such rules and regulations, premiums or additional premiums as the commissioner of insurance may approve.
(e) A statement that within fifteen days after the receipt by the corporation of notice by a subscriber, or someone acting on his behalf, that such subscriber or a covered dependent of such subscriber has received services for which the subscriber is entitled to direct payment of benefits under a contract, the corporation shall furnish the subscriber such forms as are usually furnished by it to establish a subscriber’s entitlement to such benefits; and that within forty-five days after the receipt by the corporation of completed forms for such benefits, the corporation will (i) make payments for such benefits, (ii) notify the subscriber in writing of the reason or reasons for nonpayment, or (iii) notify the subscriber in writing of what additional information or documentation is necessary to establish entitlement to such benefits. If the nonprofit hospital service corporation fails to comply with the provisions of this paragraph, said corporation shall pay, in additional to any benefits which inure to such subscriber or provider, interest on such benefits which shall accrue beginning forty-five days after the corporation’s receipt of notice of claim at the rate of one and one-half percent per month, not to exceed eighteen percent per year. The provisions of this paragraph relating to interest payments shall not apply to a claim which a nonprofit hospital service corporation is investigating because of suspected fraud.
(f) To the extent that this section is inconsistent with the provisions of chapter one hundred and seventy-six K and any regulations promulgated thereunder, medicare supplement insurance and medicare select insurance plans as defined in said chapter one hundred and seventy-six K shall be subject to the provisions of said chapter one hundred and seventy-six K and any regulations promulgated thereunder.
(g) To the extent that this section is inconsistent with the provisions of chapter one hundred and seventy-six M and any regulations promulgated thereunder, any nongroup plan that is within the definition of a guaranteed issue health plan in said chapter one hundred and seventy-six M shall be subject to the provisions of said chapter one hundred and seventy-six M and any regulations promulgated thereunder.