(1) The general assembly recognizes that health care coverage may be offered to the citizens of this state by various entities with distinct organizational and functional forms. The placement of this part 4 in this article should in no way be construed so as to alter the distinct organizational and functional character of health maintenance organizations or to alter the legal distinctions between such organizations and other health care coverage entities.
Notwithstanding any law of this state to the contrary, any person may apply to thecommissioner for and obtain a certificate of authority to establish and operate a health maintenance organization in compliance with part 1 of this article and this part 4; however, the general assembly declares that nothing in part 1 of this article or this part 4 shall be construed to ensure the success of any health maintenance organization and the state accepts no responsibility for the financial obligations of such organizations. No person shall establish or operate a health maintenance organization in this state, nor sell or offer to sell, or solicit offers to purchase or receive advance or periodic consideration in conjunction with a health maintenance organization without obtaining a certificate of authority under this part 4. A foreign corporation may qualify under this part 4 subject to its registration to do business in this state as a foreign corporation.
Every health maintenance organization as of July 6, 1973, shall submit an applicationfor a certificate of authority under subsection (4) of this section within one hundred eighty days of the said date. Each such applicant may continue to operate until the commissioner acts upon the application. In the event that an application is denied under section 10-16-402, the applicant shall henceforth be treated as a health maintenance organization whose certificate of authority has been revoked.
Each application for a certificate of authority shall be verified by an officer or authorized representative of the applicant, shall be in a form prescribed by the commissioner, and shall set forth or be accompanied by the following:
A copy of the basic organizational document, if any, of the applicant such as thearticles of incorporation, articles of association, partnership agreement, trust agreement, or other applicable documents and all amendments thereto, in triplicate, for examination by the commissioner and attorney general. Where required, said articles shall be filed and recorded in the office of the secretary of state who shall issue a certificate of incorporation. A copy of such articles shall be filed with the commissioner.
A copy of the bylaws, rules and regulations, or similar document, if any, regulatingthe conduct of the internal affairs of the applicant;
A list of the names, addresses, and official positions of the persons who are to beresponsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the principal officers in the case of a corporation, and the partners or members in the case of a partnership or association;
A copy of any contract made or to be made between any providers or persons listedin paragraph (c) of this subsection (4) and the applicant;
A statement generally describing the health maintenance organization, its health careplan or plans, facilities, and personnel;
A copy of the form of evidence of coverage to be issued to the enrollees;
A copy of the form of the group contract, if any, which is to be issued to employers,unions, trustees, or other organizations;
Financial statements showing the applicant's assets, liabilities, and sources of financial support. If the applicant's financial affairs are audited by independent certified public accountants, a copy of the applicant's most recent regular certified financial statement shall be deemed to satisfy this requirement unless the commissioner directs that additional or more recent financial information is required for the proper administration of part 1 of this article and this part 4.
A description of the proposed method of marketing the plan, a financial plan whichincludes a three-year projection of the initial operating results anticipated, and a statement as to the sources of working capital as well as any other sources of funding;
A power of attorney duly executed by such applicant, if not domiciled in this state,appointing the commissioner and the commissioner's successors in office, and duly authorized deputies, as the true and lawful attorney of such applicant in and for this state upon whom all lawful process in any legal action or proceeding against the health maintenance organization on a cause of action arising in this state may be served;
A statement reasonably describing the geographic area or areas to be served;
A description of the complaint procedures to be utilized as required under section 10-
16-409;
A description of the procedures and programs to be implemented to meet the qualityof health care requirements in section 10-16-402 (1)(b);
A description of the mechanism by which enrollees will be afforded an opportunityto participate in matters of policy and operation under section 10-16-404 (2);
Such other information as the commissioner may require to make the determinationsrequired in section 10-16-402;
An access plan for each separate network of the health maintenance organization asspecified in section 10-16-704 (9). To the extent that the information in the access plan contains the required information specified in paragraphs (e), (f), (k), (l), (m), and (n) of this subsection (4), the health maintenance organization shall be deemed to be in compliance with said paragraphs.
(5) A health maintenance organization shall, unless otherwise provided for in part 1 of this article or this part 4, file a notice describing any modification of the operation set out in the information required by subsection (4) of this section. Such notice shall be filed with the commissioner prior to the modification. If the commissioner does not disapprove within thirty days of filing, such modification shall be deemed approved.
Source: L. 92: Entire article R&RE, p. 1694, §1, effective July 1; (4)(a) amended, p. 1599,§ 123, effective July 1. L. 97: (4)(p) added, p. 1332, § 3, effective July 1.
Editor's note: This section is similar to former § 10-17-103 as it existed prior to 1992. 10-16-402. Issuance of certificate of authority - denial.
(1) (a) Repealed.
(b) The commissioner shall determine whether the applicant for a certificate of authority, with respect to health care services to be furnished:
Has demonstrated the willingness and potential ability to assure that such health careservices will be provided in a manner to assure both availability and accessibility of adequate personnel and facilities and in a manner enhancing availability, accessibility, and continuity of service;
Has arrangements, established in accordance with regulations promulgated by thecommissioner, for an ongoing quality of health care assurance program concerning health care processes and outcomes; and
Has a procedure, established in accordance with regulations of the commissioner, todevelop, compile, evaluate, and report statistics relating to the cost of its operations, the pattern of utilization of its services, the availability and accessibility of its services, and such other matters as may be reasonably required by the commissioner.
(c) Repealed.
(2) The commissioner shall issue a certificate of authority upon payment of the application fee prescribed in section 10-16-110 (2) if the commissioner is satisfied that the following conditions are met:
The persons responsible for the conduct of the affairs of the applicant are competent,trustworthy, and possess good reputations;
The commissioner determines in accordance with subsection (1) of this section thatthe health maintenance organization's proposed plan of operation meets the requirements of subsection (1)(b) of this section;
(I) The health maintenance organization will effectively provide or arrange for theprovision of basic health care services, through insurance or otherwise, except to the extent of reasonable requirements for copayments, deductibles, and payments for out-of-network services received pursuant to section 10-16-704 (2).
(II) Nothing in this paragraph (c) shall prohibit a carrier from offering to a small employer additional options of a health benefit plan that:
Provides for different benefits for insureds and dependents of insureds covered bythe same policy; and
Encourages appropriate health care condition management based on clinical guidelines by providing case management benefits to covered persons.
(d) The health maintenance organization is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the commissioner may consider:
The financial soundness of the health care plan's arrangements for health care services and the schedule of charges used in connection therewith;
The adequacy of working capital;
Any agreement with an insurer, a nonprofit hospital, medical-surgical, and healthservice corporation, a government, or any other organization for insuring the payment of the cost of health care services or the provision for automatic applicability of an alternative coverage in the event of discontinuance of the plan;
Any agreement with providers for the provision of health care services;
Any surety bond or deposit of cash or securities submitted in accordance with section 10-16-412 as a guarantee that the obligations will be duly performed.
The enrollees will be afforded an opportunity to participate in matters of policy andoperation pursuant to section 10-16-404;
Nothing in the proposed method of operation, as shown by the information submittedpursuant to section 10-16-401 or by independent investigation, is contrary to the public interest; (g) Any deficiencies certified by the commissioner have been corrected.
A certificate of authority shall be denied only after compliance with the requirementsof section 10-16-419.
A certificate of authority shall expire on the last day of June in each year and shall berenewed annually if the company has continued to comply with the laws of this state.
Source: L. 92: Entire article R&RE, p. 1696, § 1, effective July 1; (4) added, p. 1599, § 124, effective July 1. L. 93: (2)(d)(V) amended, p. 1772, § 26, effective June 6. L. 2002: (2)(c) amended, p. 1296, § 11, effective January 1, 2003. L. 2003: (2)(c) amended, p. 1778, § 13, effective January 1, 2004. L. 2006: (2)(c)(I) amended, p. 1491, § 16, effective June 1. L. 2017: (1)(a) and (1)(c) repealed and IP(1)(b), (1)(b)(II), (1)(b)(III), IP(2), (2)(b), and (2)(g) amended, (SB 17-249), ch. 283, p. 1545, § 7, effective June 1.
Editor's note: This section is similar to former § 10-17-104 as it existed prior to 1992.