Plan design is covered in the national Medical Plans guide: indemnity versus managed care, HMOs, PPOs, POS plans, cost sharing, and the ACA. This guide covers the Alabama rules that the Alabama Health exam adds. They come from the HMO Act (Ala. Code 27-21A), the prompt-pay statute, the Department's claims-handling rule (Ala. Admin. Code 482-1-124), and a few coverage laws.

HMOs in Alabama

• An HMO delivers prepaid, coordinated care through a network (27-21A-1).
• HMOs are regulated by the Commissioner of Insurance, who consults the State Health Officer on matters such as quality and complaint systems (27-21A-10, -16).
• Every HMO must keep an approved system for resolving written enrollee complaints and report on it every year.
• An HMO may solicit enrollees only through licensed insurance producers, unless a rule exempts the activity (27-21A-14).
• The first time an employer offers an HMO, each covered employee must make an affirmative written choice among the plans. After that, employees may change plans annually (27-21A-32).

Prompt payment and claims handling

Prompt pay (Ala. Code 27-1-17):

• Clean written claims from Alabama providers are paid within 45 calendar days.
• Clean electronic claims are paid within 30 calendar days.
• If a claim is not paid in that time, the provider must be told why it was denied or pended.
• Once requested information arrives, the insurer pays, denies, or adjudicates the claim within 21 calendar days.

Claims handling (482-1-124):

• Claim forms or instructions go out within 15 days of notice of a claim.
• Written notice of a denial, with reasons, goes out within 15 days of the decision. Each payment comes with an explanation of benefits.
• A penalty for failing to get precertification may be imposed only if the policy clearly states it.

Auto and other liability claims. A health insurer may not deny or delay a valid claim because the injury might also give rise to an auto liability, uninsured motorist, or medical payments claim. It pays first and may recover later through subrogation or reimbursement (27-12-25).

Coverage requirements

• Newborns. Expense-incurred individual and group policies with family coverage must cover a newborn from the moment of birth. Coverage includes injury, sickness, and diagnosed congenital defects and birth abnormalities, but need not include routine well-baby care (27-19-38).
• Prostate screening. Health benefit plans must offer coverage for annual prostate cancer screening (at least a PSA test and a digital rectal exam) for men over 40 (27-58-1, -2). Limited-benefit policies, such as Medicare supplement and disability income, are excluded.
• Coordination of benefits. The Department's COB rule sets order-of-benefit rules. The primary plan pays first, and total payments from all plans can't exceed the allowable expense (482-1-128).

Unfair discrimination

No person may unfairly discriminate in the premiums, fees, rates, benefits, or terms of disability (health) insurance between people of the same class (27-12-11(b)). Alabama's Domestic Abuse Insurance Protection Act also bars denying, cancelling, or surcharging coverage because of a person's abuse status (27-55-3).

Common exam traps

• Written clean claims: 45 days. Electronic clean claims: 30 days. Pended claims: 21 days after the information arrives.
• HMO enrollees must be solicited by licensed producers.
• A health insurer can't delay a claim because an auto policy might pay. It pays and then subrogates.
• Prostate screening must be offered for men over 40. It is not an automatic mandate.
• Newborn coverage starts at birth and includes congenital defects.