Okla. Stat. tit. 36, § 36-1219.4

organizations - Penalties.

A. As used in this section:

1. "Direct contract" means a contractual arrangement tying the

ultimate seller purporting to offer discounts through the discount

card to the health care provider, which expressly states the intent

of this agreement to be used for the purpose of offering discounts

on health-related purchases to uninsured or noncovered persons;

2. "Discount card" means a card or any other purchasing

mechanism or device, which is not insurance, that purports to offer

discounts or access to discounts in health-related purchases from

health care providers;

Oklahoma Statutes - Title 36. Insurance Page 291

3. "Discount medical plan" means a business arrangement or

contract in which a person, in exchange for fees, dues, charges, or

other consideration, provides access for plan members to providers

of medical services and the right to receive medical services from

those providers at a discount. The term discount medical plan does

not include any product regulated as an insurance product, group

health service product or health maintenance organization (HMO)

product in the State of Oklahoma or discounts provided by an

insurer, group health service, or health maintenance organizations

(HMOs) where those discounts are provided at no cost to the insured

or member and are offered due to coverage with a licensed insurer,

group health service, or HMO;

4. "Discount medical plan organization" means a person or an

entity which operates a discount medical plan;

5. "Health care provider" means any person or entity licensed

by this state to provide health care services including, but not

limited to, physicians, hospitals, home health agencies, pharmacies,

and dentists;

6. “Health care provider network” means an entity which

directly contracts with physicians and hospitals and has contractual

rights to negotiate on behalf of those health care providers with a

discount medical plan organization to provide medical services to

members of the discount medical plan organization;

7. "Marketer" means a person or entity who markets, promotes,

sells or distributes a discount medical plan, including a private

label entity that places its name on and markets or distributes a

discount medical plan but does not operate a discount medical plan;

8. "Medical services" means any care, service or treatment of

illness or dysfunction of, or injury to, the human body including,

but not limited to, physician care, inpatient care, hospital

surgical services, emergency services, ambulance services, dental

care services, vision care services, mental health services,

substance abuse services, chiropractic services, podiatric care

services, laboratory services, and medical equipment and supplies.

The term does not include pharmaceutical supplies or prescriptions;

9. "Member" means any person who pays fees, dues, charges, or

other consideration for the right to receive the purported benefits

of a discount medical plan; and

10. "Person" means an individual, corporation, business trust,

estate, trust, partnership, association, joint venture, limited

liability company, or any other government or commercial entity.

B. 1. Before doing business in this state as a discount

medical plan organization, an entity shall be a corporation, limited

liability corporation, partnership, limited liability partnership or

other legal entity, organized under the laws of this state or, if a

foreign entity, authorized to transact business in this state, and

shall be registered as a discount medical plan organization with the

Oklahoma Statutes - Title 36. Insurance Page 292

Insurance Department or be licensed by the Insurance Department as a

licensed insurance company, licensed HMO, licensed group health

service organization or motor service club.

2. To register as a discount medical plan organization, an

applicant shall:

a. file with the Insurance Department an application on
medical plan organization with the

Oklahoma Statutes - Title 36. Insurance Page 292

Insurance Department or be licensed by the Insurance Department as a

licensed insurance company, licensed HMO, licensed group health

service organization or motor service club.

2. To register as a discount medical plan organization, an

applicant shall:

a. file with the Insurance Department an application on

the form that the Insurance Commissioner requires, and

b. pay to the Insurance Department an application fee of

Two Hundred Fifty Dollars ($250.00).

3. A registration is valid for a one-year term.

4. A registration expires one year following the registration

unless it is renewed as provided in this subsection.

5. Before it expires, a registrant may renew the registration

for an additional one-year term if the registrant:

a. otherwise is entitled to be registered,

b. files with the Insurance Department a renewal

application on the form that the Insurance

Commissioner requires, and

c. pays to the Insurance Department a renewal fee of Two

Hundred Fifty Dollars ($250.00).

6. The Insurance Commissioner may deny a registration to an

applicant or refuse to renew, suspend, or revoke the registration of

a registrant if the applicant or registrant, or an officer,

director, or employee of the applicant or registrant:

a. makes a material misstatement or misrepresentation in

an application for registration,

b. fraudulently or deceptively obtains or attempts to

obtain a registration for the applicant or registrant

or for another,

c. in connection with the administration of a health care

discount program, commits fraud or engages in illegal

or dishonest activities, or

d. has violated any provisions of this section.

7. Prior to registration by the Insurance Department, each

discount medical plan organization shall establish an Internet web

site.

8. All amounts collected as registration or renewal fees shall

be deposited into the General Revenue Fund.

9. Nothing in this subsection shall require a provider who

provides discounts to his or her own patients to obtain and maintain

a registration as a discount medical plan organization.

10. a. Nothing in this subsection shall apply to an affiliate

of a licensed insurance company, HMO, group health

service organization or motor service club, provided

that the affiliate registers with and maintains

registration in good standing with the Insurance

Oklahoma Statutes - Title 36. Insurance Page 293

Department in accordance with subparagraphs b and c of

this paragraph.

b. An affiliate shall register as a discount medical plan

organization on a form prescribed by the Insurance

Commissioner prior to the sale, marketing or

solicitation of a discount medical plan and pay an

application fee of One Hundred Dollars ($100.00).

c. A registration shall expire one (1) year after the

date of registration, and each year on that date

thereafter. A registrant may renew the registration

if the registrant pays an annual registration fee of

One Hundred Dollars ($100.00) and remains in good

standing with the Insurance Department.

d. For purposes of this section, “affiliate” means a

person that, directly or indirectly through one or

more intermediaries, controls or is controlled by or

is under common control with an insurance company,

HMO, group health service organization or motor

service club licensed in this state.

C. 1. The Insurance Department may examine or investigate the

business and affairs of any discount medical plan organization. The

Insurance Department may require any discount medical plan

organization or applicant to produce any records, books, files,

advertising and solicitation materials, or other information and may

take statements under oath to determine whether the discount medical

plan organization or applicant is in violation of the law or is

acting contrary to the public interest. The expenses incurred in
The

Insurance Department may require any discount medical plan

organization or applicant to produce any records, books, files,

advertising and solicitation materials, or other information and may

take statements under oath to determine whether the discount medical

plan organization or applicant is in violation of the law or is

acting contrary to the public interest. The expenses incurred in

conducting any examination or investigation shall be paid by the

discount medical plan organization or applicant. Examinations and

investigations shall be conducted as provided in Sections 309.1 and

309.3 through 309.7 of this title. Discount medical plan

organizations shall be governed by the provisions of this section

and shall not be subject to the provisions of the Insurance Code

unless specifically referenced.

2. All work papers, recorded information, documents, books,

files, advertising and solicitation materials, copies or other

information produced by, obtained by or disclosed to the

Commissioner or any other person in the course of an examination or

investigation made pursuant to this section or in the course of

analysis by the Commissioner or other person, shall be given

confidential treatment by the Commissioner and may not be made

public by the Commissioner or any other person who obtained the

information in the course of the examination or investigation,

except to the extent provided in this section. Access may be

granted to the National Association of Insurance Commissioners. The

parties shall agree in writing prior to receiving the information to

provide to it the same confidential treatment as required by this

Oklahoma Statutes - Title 36. Insurance Page 294

section, unless the prior written consent of the company to which it

pertains has been obtained. The confidentiality and protection from

discovery by subpoena provided for in this paragraph shall not be

construed to be extended to identical, similar or other related

documents or information or to the work papers that are not deemed

to be in the possession, custody or control of the Commissioner.

3. Failure by the discount medical plan organization to pay the

expenses incurred under paragraph 1 of this subsection shall be

grounds for denial or revocation of the discount medical plan

organization’s registration.

D. 1. A discount medical plan organization may charge a

reasonable one-time processing fee and a periodic charge.

2. If the member cancels the membership within the first thirty

(30) days after receipt of the discount card and other membership

materials, the member shall receive a reimbursement of all periodic

charges paid. The return of all periodic charges shall be made

within thirty (30) days of the date of the cancellation. If all of

the periodic charges have not been paid within thirty (30) days,

interest shall be assessed and paid on the proceeds at a rate of the

Treasury Bill rate of the preceding calendar year, plus two (2)

percentage points.

3. The right of cancellation shall be set out in the contract

on the first page, in ten-point type or larger.

4. If a discount medical plan charges for a time period in

excess of one (1) month, the plan shall, in the event of

cancellation of the membership by either party, make a pro rata

reimbursement of all periodic charges to the member.

E. 1. A discount medical plan organization may not:

a. use in its advertisements, marketing material,

brochures, and discount cards the terms “insurance”,

"health plan", "coverage", "copay", "copayments",

"preexisting conditions", "guaranteed issue",

"premium", "PPO", "preferred provider organization”,

or other terms in a manner that could reasonably

mislead a person to believe that the discount medical

plan is health insurance,

b. except for hospital services, have restrictions on

free access to plan providers including waiting

periods and notification periods, or

c. pay providers any fees for medical services.
s", "guaranteed issue",

"premium", "PPO", "preferred provider organization”,

or other terms in a manner that could reasonably

mislead a person to believe that the discount medical

plan is health insurance,

b. except for hospital services, have restrictions on

free access to plan providers including waiting

periods and notification periods, or

c. pay providers any fees for medical services.

2. A discount medical plan organization may not collect or

accept money from a member for payment to a provider for specific

medical services furnished or to be furnished to the member unless

the organization has an active license from the Insurance Department

to act as an administrator.

F. 1. The following disclosures, to be printed in not less

than twelve-point type, shall be made in writing to any prospective

Oklahoma Statutes - Title 36. Insurance Page 295

member and shall appear on the first page of any advertisements,

marketing materials or brochures relating to a discount medical

plan:

a. that the plan is not insurance,

b. that the plan provides discounts with certain health

care providers for medical services,

c. that the plan does not make payments directly to the

providers of medical services,

d. that the plan member is obligated to pay for all

health care services but will receive a discount from

those health care providers who have contracted with

the discount plan organization, and

e. the name and the location of the registered discount

medical plan organization, including the current

telephone number of the registered discount medical

plan organization or other entity responsible for

customer service for the plan, if different from the

registered discount medical plan organization.

2. If the discount medical plan is sold, marketed, or solicited

by telephone, the disclosures required by this section shall be made

orally and provided in the initial written materials that describe

the benefits under the discount medical plan provided to the

prospective or new member.

3. The discount card provided to members shall prominently

display the words “This is not insurance”.

G. 1. All providers offering medical services to members under

a discount medical plan shall provide such services pursuant to a

written agreement. The agreement may be entered into directly by

the health care provider or by a health care provider network to

which the provider belongs if the provider network has contracts

with the health care provider that allow the provider network to

contract on behalf of the health care provider.

2. A health care provider agreement shall provide the

following:

a. a description of the services and products to be

provided at a discount,

b. the amount or amounts of the discounts or,

alternatively, a fee schedule which reflects the

health care provider's discounted rates, and

c. a provision that the health care provider will not

charge members more than the discounted rates.

3. A health care provider agreement with a health care provider

network shall require that the health care provider network have

written agreements with its health care providers that:

a. contain the terms described in paragraph 2 of this

subsection,

Oklahoma Statutes - Title 36. Insurance Page 296

b. authorize the health care provider network to contract

with the discount medical plan organization on behalf

of the provider, and

c. require the network to maintain an up-to-date list of

its contracted health care providers and to provide

that list on a quarterly basis to the discount medical

plan organization.

4. The discount medical plan organization shall maintain a copy

of each active health care provider agreement into which it has

entered.

H. 1. There shall be a written agreement between the discount

medical plan organization and the member specifying the benefits

under the discount medical plan and complying with the disclosure

requirements of this section.
count medical

plan organization.

4. The discount medical plan organization shall maintain a copy

of each active health care provider agreement into which it has

entered.

H. 1. There shall be a written agreement between the discount

medical plan organization and the member specifying the benefits

under the discount medical plan and complying with the disclosure

requirements of this section.

2. All forms used, including the written agreement pursuant to

the provisions of subsection G of this section, shall first be filed

with the Insurance Department. Every form filed shall be identified

by a unique form number placed in the lower left corner of each

form. A filing fee of Twenty-five Dollars ($25.00) per form shall

be payable to the Insurance Department for deposit into the General

Revenue Fund.

I. 1. Each discount medical plan organization required to be

registered pursuant to this section except an affiliate shall, at

all times, maintain a net worth of at least One Hundred Fifty

Thousand Dollars ($150,000.00).

2. The Insurance Department may not allow a registration unless

the discount medical plan organization has a net worth of at least

One Hundred Fifty Thousand Dollars ($150,000.00).

J. 1. The Insurance Department may suspend the authority of a

discount medical plan organization to enroll new members, revoke any

registration issued to a discount medical plan organization, or

order compliance if the Department finds that any of the following

conditions exist:

a. the organization is not operating in compliance with

the provisions of this section,

b. the organization does not have the minimum net worth

as required by this section,

c. the organization has advertised, merchandised or

attempted to merchandise its services in such a manner

as to misrepresent its services or capacity for

service or has engaged in deceptive, misleading or

unfair practices with respect to advertising or

merchandising,

d. the organization is not fulfilling its obligations as

a discount medical plan organization, or

e. the continued operation of the organization would be

hazardous to its members.

Oklahoma Statutes - Title 36. Insurance Page 297

2. If the Insurance Department has cause to believe that

grounds for the suspension or revocation of a registration exist,

the Insurance Department shall notify the discount medical plan

organization in writing, specifically stating the grounds for

suspension or revocation, and shall provide opportunity for a

hearing on the matter in accordance with the Administrative

Procedures Act and the Oklahoma Insurance Code.

3. When the certificate of registration of a discount medical

plan organization is nonrenewed, surrendered or revoked, such

organization shall proceed, immediately following the effective date

of the order of revocation, or in the case of nonrenewal, the date

of expiration of the certificate of registration, to wind up its

affairs transacted under the certificate of registration. The

organization may not engage in any further advertising,

solicitation, collecting of fees, or renewal of contracts.

4. The Insurance Department shall, in its order suspending the

authority of a discount medical plan organization to enroll new

members, specify the period during which the suspension is to be in

effect and the conditions, if any, which shall be met by the

discount medical plan organization prior to reinstatement of its

registration to enroll new members. The order of suspension is

subject to rescission or modification by further order of the

Insurance Department prior to the expiration of the suspension

period. Reinstatement may not be made unless requested by the

discount medical plan organization; however, the Insurance

Department may not grant reinstatement if it finds that the

circumstances for which the suspension occurred still exist or are

likely to reoccur.

K. Each discount medical plan organization required to be
f the

Insurance Department prior to the expiration of the suspension

period. Reinstatement may not be made unless requested by the

discount medical plan organization; however, the Insurance

Department may not grant reinstatement if it finds that the

circumstances for which the suspension occurred still exist or are

likely to reoccur.

K. Each discount medical plan organization required to be

registered pursuant to this section shall provide the Insurance

Department at least thirty (30) days' advance notice of any change

in the discount medical plan organization's name, address, principal

business address, or mailing address.

L. Each discount medical plan organization shall maintain an

up-to-date list of the names and addresses of the providers with

which it has contracted on an Internet web site page, the address of

which shall be prominently displayed on all its advertisements,

marketing materials, brochures, and discount cards. This section

applies to those providers with whom the discount medical plan

organization has contracted directly, as well as those who are

members of a provider network with which the discount medical plan

organization has contracted.

M. 1. All advertisements, marketing materials, brochures and

discount cards used by marketers shall be approved in writing for

such use by the discount medical plan organization.

2. The discount medical plan organization shall have an

executed written agreement with a marketer prior to the marketer's

Oklahoma Statutes - Title 36. Insurance Page 298

marketing, promoting, selling, or distributing the discount medical

plan.

N. The Insurance Commissioner may promulgate rules to

administer the provisions of this section.

O. Regulation of discount medical plan organizations shall be

done pursuant to the Administrative Procedures Act.

P. 1. A discount medical plan organization required to be

registered pursuant to this section except an affiliate shall

maintain a surety bond with the Insurance Department, having at all

times a value of not less than Thirty-five Thousand Dollars

($35,000.00), for use by the Insurance Department in protecting plan

members.

2. No judgment creditor or other claimant of a discount medical

plan organization, other than the Insurance Department, shall have

the right to levy upon the surety bond held pursuant to the

provisions of paragraph 1 of this subsection.

Q. 1. A person who knowingly and willfully operates as or aids

and abets another operating as a discount medical plan organization

in violation of subsection B of this section commits a felony,

punishable as provided for in Oklahoma law, as if the discount

medical plan organization were an unauthorized insurer, and the

fees, dues, charges, or other consideration collected from the

members by the discount medical plan organization or marketer were

insurance premium.

2. A person who collects fees for purported membership in a

discount medical plan but fails to provide the promised benefits

commits a theft, punishable as provided in Oklahoma law.

R. 1. In addition to the penalties and other enforcement

provisions of this section, the Insurance Department may seek both

temporary and permanent injunctive relief if:

a. a discount medical plan organization is being operated

by any person or entity that is not registered

pursuant to this section, or

b. any person, entity, or discount medical plan

organization has engaged in any activity prohibited by

this section or any rule adopted pursuant to this

section.

2. The venue for any proceeding brought pursuant to the

provisions of this section shall be in the district court of

Oklahoma County.

S. 1. The provisions of this section apply to the activities

of a discount medical plan organization that is not registered

pursuant to this section as if the discount medical plan

organization were an unauthorized insurer.

2. A discount medical plan organization being operated by any
eding brought pursuant to the

provisions of this section shall be in the district court of

Oklahoma County.

S. 1. The provisions of this section apply to the activities

of a discount medical plan organization that is not registered

pursuant to this section as if the discount medical plan

organization were an unauthorized insurer.

2. A discount medical plan organization being operated by any

person or entity that is not registered pursuant to this section, or

any person, entity or discount medical plan organization that has

Oklahoma Statutes - Title 36. Insurance Page 299

engaged or is engaging in any activity prohibited by this section or

any rules adopted pursuant to this section shall be subject to the

Unauthorized Insurer Act as if the discount medical plan

organization were an unauthorized insurer, and shall be subject to

all the remedies available to the Insurance Commissioner under the

Unauthorized Insurer Act.

T. If the Insurance Commissioner finds that a discount medical

plan organization has violated any provision of this section or that

grounds exist for the discretionary revocation or suspension of a

registration, the Commissioner, in lieu of such revocation or

suspension, may impose a fine upon the discount medical plan

organization in an amount not to exceed One Thousand Dollars

($1,000.00) per violation.