Under 28 TAC 11.506(3), a Texas HMO wants to cancel a group subscriber's coverage because the subscriber no longer resides, lives, or works in the HMO's service area. Which condition governs that action?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under 28 TAC 11.506(3), where a subscriber does not reside, live, or work in the service area of the HMO, the HMO may cancel that subscriber's coverage, but only if it terminates coverage uniformly without regard to any health status-related factor of enrollees. Two conditions therefore stack: the geographic trigger, and the uniform, health-status-neutral application of the termination. The same rule also protects a child who is the subject of a medical support order from being cancelled on this ground, so a producer cannot assume that a move out of the service area automatically ends coverage.
Why the other options are wrong
- A) The out-of-area ground is available only if coverage is terminated uniformly without regard to health status-related factors, not at the HMO's unlimited discretion.
- B) Comparing the subscriber's claims with the charges paid is not the test; the permitted grounds are those prescribed by rule and do not include cost experience.
- D) The group contract holder's written consent is not one of the conditions in 28 TAC 11.506(3) for cancelling on the service-area ground.
Memory hook
Out of area is a valid ground, but apply it uniformly and never by health status.