It is enacted by the General Assembly as follows:

SECTION 1. Section 27-41-14 of the General Laws in Chapter 27-41 entitled "Health Maintenance Organizations" is hereby amended to read as follows:

27-41-14. Prohibited practices. -- (a) No health maintenance organization, or representative thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading, or any form of evidence of coverage which is deceptive. For purposes of this chapter:

(1) A statement or item of information shall be deemed to be untrue if it does not conform to fact in any respect which is or may be significant to an enrollee of, or a person considering enrollment with, a health maintenance organization;

(2) A statement or item of information shall be deemed to be misleading, whether or not it may be literally untrue, if, in the total context in which the statement is made or the item of information is communicated, the statement or item of information may be reasonably understood by a reasonable person, not possessing special knowledge regarding health care coverage, as indicating any benefit or advantage or the absence of any exclusion, limitation, or disadvantage of possible significance to an enrollee of, or a person considering enrollment in, a health maintenance organization, if the benefit or advantage or absence of limitation, exclusion, or disadvantage does not in fact exist; and

(3) An evidence of coverage shall be deemed to be deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, shall be such as to cause a reasonable person, not possessing special knowledge regarding health maintenance organizations and evidences of coverage therefor, to expect benefits, services, charges, or other advantages which the evidence of coverage does not provide or which the health maintenance organization issuing the evidence of coverage does not regularly make available for enrollees covered under the evidence of coverage.

(b) Section 42-62-12 and regulations pursuant thereto and chapter 29 of this title, relating to unfair competition and practices, shall be construed to apply to health maintenance organizations and evidences of coverage except to the extent that the director of business regulation determines that the nature of health maintenance organizations, and evidences of coverage, render those sections clearly inappropriate.

(c) An enrollee may not be cancelled or nonrenewed except for reasons stated in the rules of the health maintenance organization applicable to all enrollees, for the failure to pay the charge for coverage, or for such other reasons as may be approved by the director of business regulation.

(d) No health maintenance organization, unless licensed as an insurer, may use in its name, contracts, or literature any of the words "insurance", "casualty", "surety", or "mutual", or any words descriptive of the insurance, casualty, or surety business or deceptively similar to the name or description of any insurance or surety corporation doing business in this state.

(e) No person, unless in possession of a valid license as a health maintenance organization pursuant to the laws of this state, shall hold himself or herself out as a health maintenance organization or HMO or shall do business as a health maintenance organization or a HMO in the state of Rhode Island, and no person shall do business in this state under a name deceptively similar to the name of any health maintenance organization possessing a valid license pursuant to this chapter.

(f) No health maintenance organization shall fail to contract with any provider who is licensed by this state to provide the services delineated in section 27-41-2(h)(1) solely because that provider is a podiatrist as defined in chapter 29 of title 5.

{ADD (g) Except as provided in section 27-41-13(i), no contract between a health maintenance organization and a physician for the provisions of services to patients may require that the physicians indemnify or hold harmless the health maintenance organization for any expenses and liabilities, including without limitation, judgments, settlements, attorneys' fees, court costs, and any associated charges, incurred in connection with any plan or action brought against the plan based on the health maintenance organization's management decisions or utilization review provisions for any patient. ADD}

SECTION 2. This act shall take effect upon passage.