SECTION 14. Optional insurance for services of health care organizations

The commission may enter into a contract, hereinafter described, to make available the services of a health care organization to certain eligible active and retired employees and dependents, including the surviving spouse and dependents of such active and retired employees, on a voluntary and optional basis, as it deems to be in the best interest of the commonwealth and such eligible persons as aforesaid, provided:—

(1) that the total monthly premium cost to be paid by the commission is to be paid under the terms of a contract to a carrier and not paid directly to a health care organization. For purposes of this chapter such a contract shall be deemed to be a contract of insurance;

(2) that the health care organization maintains fair and nondiscriminatory formulas for the payment of all vendor's services, and that such formulas result in the same relative charges to all fiscal intermediaries or carriers with whom the health care organization has an agreement; provided, however, that any difference in relative charges which may result from the application of a rate of payment approved under section five of chapter one hundred and seventy-six A shall be deemed to comply herewith.

Said commission may negotiate such a contract of insurance for and on behalf and in the name of the commonwealth for such a period of time not exceeding five years as it may in its discretion, deem to be most advantageous to the commonwealth and the persons insured thereunder.

All persons eligible for the insurance provided under sections four, five, six, ten B, ten C and twelve shall have the option to be insured for the services of a health care organization under this section but shall not be insured for both. For all such persons, the commonwealth shall contribute the same percent share of the total monthly premium or rate for coverage under this section as the percent share it contributes of the health insurance programs provided under sections four, five, six, ten B, ten C, and twelve; and such eligible persons having elected coverage under this section by making application as provided in section seven, shall pay the remainder premium or rate. Such payment by the insured shall be made to the commission as provided in section eight.

The commission shall require under the terms and provisions of such insurance contract an accounting at least annually of the payments made to providers of services on behalf of each person so insured; and, the extent and range of health care services shall be a matter of continuing analysis and study by the commission for the purpose of maintaining a reasonable relationship between the total monthly premium cost or rate and the range of health care services provided. On or before December first in each year the commission shall establish a list of the eligible health care organizations and a schedule of services as authorized by this section and shall so notify the appropriate public authorities in the political subdivisions of the commonwealth that have accepted the provisions of section ten of chapter thirty-two B.

Any dividend or its equivalent derived from insurance contracts issued pursuant to this section shall be applied as provided in section nine.

The commission may promulgate rules and regulations implementing the provisions of this section and such rules and regulations shall not be subject to the provisions of chapter thirty A.