The Rhode Island Department of Business Regulation has filed a motion for sanctions against HMA Administrators for an alleged violation of the temporary cease and desist order. The alleged violation involves the solicitation of business by HMA through and employee or agent. The temporary cease and desist order (available here) states: "HMA Administrators will not market or sell self-funded ERISA health benefit plans directly or through any affiliated entity to Rhode Island employers pending further order of the Director or Hearing Officer."
According to the motion and its attachments, a Rhode Island insurance producer, who holds himself out as an "Independent Benefits Consultant" for HMA Direct, sent an email to the East Greenwich Chamber of Commerce asking if he could "sit down and review" with the Chamber how HMA direct is "saving [its] clients significant money . . ." The producer also offers to put on a seminar for the Chamber's members.
A hearing has been requested for August 20, 2009. The Motion for Sanctions can be seen here: Motion for Sanctions.
Friday, July 24, 2009
Motion for sanctions against HMA Administrators
Thursday, July 23, 2009
Confidentiality and health insurance rate filings
Rate filings data, including trend data related to price, mix and utilization of inpatient, outpatient, med/surg and Rx, are now available to the public. The insurance carriers' arguments that such information be kept confidential have been rejected.
On May 15, 2009 the Rhode Island Office of the Health Insurance Commissioner (OHIC) received annual rate filings by Rhode Island's three major health insurance carriers. The filings, made by Blue Cross & Blue Shield of Rhode Island, UnitedHealthcare of New England, and Tufts Health Plan, cover both the large employer (more than 50 employees) and small employer (50 or fewer employees) markets. Rhode Island is the only state in the nation to require annual comprehensive rate and trend filings for the entire fully insured group market by major health insurance carriers. The details of the filings can be found here.
Second, we asked whether the APRA creates a general duty of nondisclosure. This question was posed because the carriers also assert that disclosure will violate the UTSA. In order to prevail in a UTSA claim, there must be a "misappropriation" of a trade secret.* Even if we assume that the documents contain trade secrets, there must still be a misappropriation for there to be a violation of the UTSA. Since the carriers do not suggest that the documents at issue were acquired under improper means** or by accident or mistake, and since the documents were obtained directly from the carriers, there can only be a “misappropriation” through disclosure if OHIC has a duty to maintain the secrecy or limit the use of the data forms or their contents.*** We concluded that no duty is created under the state's insurance laws, so we asked if the APRA created any general duty of nondisclosure. The AG indicated that it did not.
A copy of our letter to health insurers is here. A copy of our request for an advisory opinion is here. A link of the AG's opinion is here: AG Opinion Letter.
*R.I. Gen. Laws § 6-41-2(a) (“Actual or threatened misappropriation may be enjoined.”); Read & Lundy, Inc. v. Washington Trust Co. of Westerly, 2002 WL 31867868 at *8 (R.I. Super. Dec. 13, 2002) (“The UTSA proscribes the misappropriation of trade secrets.”); see also Deluxe Pattern Corp. v. Laser Design, Inc., 1995 WL 434433 at *5 (Minn. App. July 25, 1995) (“The uniform trade secrets act requires proof of an ‘actual or threatened misappropriation’ of the trade secret.”); Tubular Threading, Inc. v. Scandaliato, 443 So.2d 712, 715 (La. App. 5th Cir. 1983) (Injunctions may be issued in trade secret cases, but only if misappropriations are actual or threatened.).
**The UTSA provides that “’[i]mproper means includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.” R.I. Gen. Laws §6-41-1(1).
***R.I. Gen. Laws § 6-41-1(2)(ii)(B)(II).
A copy of our letter to health insurers is here. A copy of our request for an advisory opinion is here. A link of the AG's opinion is here: AG Opinion Letter.
*R.I. Gen. Laws § 6-41-2(a) (“Actual or threatened misappropriation may be enjoined.”); Read & Lundy, Inc. v. Washington Trust Co. of Westerly, 2002 WL 31867868 at *8 (R.I. Super. Dec. 13, 2002) (“The UTSA proscribes the misappropriation of trade secrets.”); see also Deluxe Pattern Corp. v. Laser Design, Inc., 1995 WL 434433 at *5 (Minn. App. July 25, 1995) (“The uniform trade secrets act requires proof of an ‘actual or threatened misappropriation’ of the trade secret.”); Tubular Threading, Inc. v. Scandaliato, 443 So.2d 712, 715 (La. App. 5th Cir. 1983) (Injunctions may be issued in trade secret cases, but only if misappropriations are actual or threatened.).
**The UTSA provides that “’[i]mproper means includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.” R.I. Gen. Laws §6-41-1(1).
***R.I. Gen. Laws § 6-41-1(2)(ii)(B)(II).
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