(a) Except for nonpayment of premium or termination of eligibility, a prepaid limited health service organization may not cancel or otherwise terminate or fail to renew a prepaid limited health services contract without giving the subscriber and the health maintenance organization or state or federal agency with whom it has contracted at least forty-five (45) days’ notice in writing of the cancellation, termination, or nonrenewal of the contract. The written notice must state the reason or reasons for the cancellation, termination, or nonrenewal. The only reasons for cancellation at the time other than the renewal period shall be as follows:

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Terms Used In Tennessee Code 56-51-123

  • Contract: A legal written agreement that becomes binding when signed.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Fraud: Intentional deception resulting in injury to another.
  • Limited health service: means dental care services, vision care services, mental health services, substance abuse services, and pharmaceutical services. See Tennessee Code 56-51-102
  • Prepaid limited health service organization: means any person, corporation, partnership, or any other entity that, in return for a prepayment from a health maintenance organization or a state or federal agency, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers. See Tennessee Code 56-51-102
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Subscriber: means an individual on whose behalf a contract or arrangement has been entered into with a prepaid limited health service organization for health care services or other persons who also receive health care services as a result of the contract. See Tennessee Code 56-51-102
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) The subscriber’s behavior is disruptive, unruly, abusive, unlawful, fraudulent, or uncooperative to the extent that the subscriber’s continuing participation seriously impairs the organization’s ability to provide services to other subscribers;
(2) Fraud or material misrepresentation in applying for or presenting any claim for benefits under the contract;
(3) Misuse of the documents provided as evidence of benefits available pursuant to the contract; or
(4) Furnishing to the organization, by the subscriber, incorrect or incomplete information for the purposes of fraudulently obtaining services.
(b) Prior to disenrollment, the organization must make an effort to resolve the problem through the grievance procedure and must determine that the subscriber’s behavior is not due to use of the services provided or mental illness. All prepaid limited health services contracts must contain a clause that requires that this notice be given. In the case of a prepaid limited health services contract issued to an employer holding the contract on behalf of the subscriber group, the prepaid limited health service organization may make the notification through the employer, and, if the prepaid limited health service organization elects to take this action through the employer, the organization shall be deemed to have complied with this section upon notifying the employer of the requirements of this section and requesting the employer to forward the required notice to all subscribers.
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