SECTION 1. Corporations governed by chapter; services received in nonparticipating hospital; substitution of benefits in nursing homes

Any corporation organized under the laws of the commonwealth for the purpose of establishing, maintaining and operating a non-profit hospital service plan whereby hospital care and reimbursement for other health services may be provided by such corporation, or by a hospital with which it has a contract for such care and which is maintained by the commonwealth or a political subdivision thereof, or maintained by a corporation organized for hospital purposes under the laws of the commonwealth, or such other hospitals as shall be approved by the commissioner of public health, to such of the public who become subscribers to said plan under a contract which entitles each subscriber or his dependents, or employees or dependents of employees of employers who contribute the subscription fees in whole or in part to certain hospital care and reimbursement for other health services, shall be governed by this chapter.

Nothing in this chapter shall prevent such a corporation from reimbursing a subscriber for services received in a non-participating hospital within or outside the commonwealth in the event of accident, illness or maternity or, upon the written direction of the subscriber, from making payment to said hospital for such services; provided, however, that the amount of such reimbursement and payment to any such hospital within the commonwealth shall conform with such method of payment and guarantee of benefits as shall have been in effect pursuant to section five of this chapter immediately prior to the expiration of the then most recent contract between said hospital and said corporation and shall be based upon the charges of the hospital in effect on such date.

Nothing in this section shall prevent any such corporation, with the approval of the commissioner of public health, from entering into contracts with the Soldiers' Home in Massachusetts and the Soldiers' Home in Holyoke, whereby in consideration of a contract fee, said soldiers' homes shall provide such care for non-service connected causes as would be provided in participating hospitals under contracts with subscribers.

Nothing in this section shall prevent any such corporation, with the approval of said commissioner, from entering into contracts with the Lemuel Shattuck Hospital whereby, in consideration of a contract fee, said hospital shall provide such hospitalization and such other care as would be provided in participating hospitals under contracts with subscribers, subject to such restrictions as to nature of disease and length of stay as may be specified from time to time in said contracts.