March 19, 1999

The Honorable Manny M. Aragon and

Members of the Senate

Executive-Legislative Building

Santa Fe, New Mexico 87503

Honorable President and Members of the Senate:

I have this day VETOED and am returning SENATE BILL 403, as amended, enacted by the Forty-Fourth Legislature, First Session, 1999.

This legislation would require contracts between Health Maintenance Organizations and their participating health care providers to include a provision imposing an interest penalty on the HMO if it does not pay the undisputed portion of any claims within 30 days. It also requires the Insurance Division to adopt rules by December 1, 1999 requiring HMO’s to provide timely notice to providers of claims received.

I vetoed this bill because current state law and Insurance Department rules already contain a requirement for payment in forty-five days and allow for the imposition of penalties for failing to make timely insurance claims. I am concerned that this bill may increase the cost of providing health care by imposing new requirements on HMO’s and establish a precedent for government involvement in private contracts.

Sincerely,

Gary E. Johnson

Governor