§ 27-41-3 - Establishment of health maintenance organizations. - Rhode Island Statutes

SECTION 27-41-3

   § 27-41-3  Establishment of healthmaintenance organizations. – (a) Notwithstanding chapter 5.1 of title 7, sections 27-2-22, 27-19-4, 27-20-4,27-20.1-2, and 27-20.2-2, or any other law of this state to the contrary, anypublic or private organization may apply to the director of business regulationfor and obtain a license to establish and operate a health maintenanceorganization in compliance with this chapter. No public or private organizationshall establish or operate a health maintenance organization in this statewithout obtaining a license under this chapter. A foreign corporation mayqualify under this chapter, subject to its registration to do business in thisstate as a foreign corporation under § 7-1.2-1401;

   (2) Notwithstanding anything to the contrary in § 7-6-4,a non-profit corporation may be organized for the purpose of a healthmaintenance organization and that corporation shall not be subject to limits inits assets except as provided in this chapter.

   (b) Each application for a license shall be verified by anofficer or authorized representative of the applicant, shall be in a formprescribed by the director in consultation with the director of health, andshall set forth or be accompanied by the following:

   (1) A copy of the organizational documents of the applicant,such as the articles of incorporation;

   (2) A copy of the bylaws, rules and regulations, or similardocument, if any, regulating the conduct of the internal affairs of theapplicant;

   (3) A list of the names, addresses, and official positions ofthe persons who are to be responsible for the conduct of the affairs of theapplicant, including all members of the board of directors, board of trustees,executive committee, or other governing board or committee, the principalofficers of the corporation;

   (4) A copy of any contract made or to be made, including anyrevisions to the document between any providers or persons listed insubdivision (3) of this subsection and the applicant;

   (5) A copy of the form of evidence of coverage to be issuedto the enrollees;

   (6) A copy of the form of the group contract, if any, whichis to be issued to employers, unions, trustees, or other organizations;

   (7) Financial statements showing the applicant's assets,liabilities, and sources of financial support. If the applicant's financialaffairs are audited by independent certified public accountants, a copy of theapplicant's most recent regular certified financial statement shall be deemedto satisfy this requirement unless the director directs that additional or morerecent financial information is required for the proper administration of thischapter;

   (8) An examination report prepared by the insurancedepartment of the company's state of domicile or port of entry state. Thisrequirement shall be deemed to be satisfied if the report is less than five (5)years old and: (i) the insurance department at the time of the examination wasaccredited under the National Association of Insurance Commissioners' financialregulations standards and accreditation program or (ii) the examination isperformed under the supervision of an accredited insurance department or withthe participation of one or more examiners who are employed by an accreditedstate insurance department and who, after a review of the examination workpapers and report, state under oath that the examination was performed in amanner consistent with the standards and procedures required by their insurancedepartment. In lieu of an examination meeting the requirements set forth inthis section, an examination of the company may be performed, prior tolicensure, by the Rhode Island insurance division. The examination shall beperformed and the associated costs shall be borne by the company in accordancewith all the provisions of chapter 13.1 of this title.

   (9) A description of the proposed method of marketing thehealth maintenance organization, a financial plan which includes a projectionof the initial operating results anticipated until the organization has had netincome for at least one year, and a statement as to the sources of workingcapital and any other sources of funding;

   (10) A power of attorney duly executed by the applicant, ifnot domiciled in this state, appointing the director and his or her successorsin office, and duly authorized deputies, as the true and lawful attorney of theapplicant in and for this state upon whom all lawful process in any legalaction or proceeding against the health maintenance organization on a cause ofaction arising in this state may be served;

   (11) A statement reasonably describing the geographic area orareas to be served;

   (12) A description of the complaint procedures to be utilizedas required under § 27-41-11;

   (13) A description of the procedures and programs to beimplemented to meet the quality of health care requirements in §27-41-4(a)(2);

   (14) A description of the mechanism by which enrollees willbe afforded an opportunity to participate in matters of policy and operationunder § 27-41-6(b);

   (15) A description of the provider networks to be utilized toprovide health care services to enrollees;

   (16) A description of the utilization management mechanismsby which enrollees' access to and use of health services will be controlled; and

   (17) Any other information that the director in consultationwith the director of health may require to make the determinations required in§ 27-41-4.

   (c) An applicant or a licensed health maintenanceorganization shall, unless otherwise provided for in this chapter, file anotice describing any material modification of the operation including, but notlimited to, systematic changes in provider networks and mechanisms for themanagement and control of the use of covered services by enrollees, set out inthe information required by subsection (b) of this section. The notice shall befiled with the director and with the director of health prior to themodification. If the director or the director of health does not disapprovewithin ninety (90) days of the filing, the modification shall be deemedapproved.

   (d) An applicant or a licensed health maintenanceorganization shall file all contracts of reinsurance. Any agreement between theorganization and an insurer shall be subject to the laws of this stateregarding reinsurance. All reinsurance agreements and any modifications to themmust be filed and approved. Reinsurance agreements shall remain in full forceand effect for at least ninety (90) days following written notice by registeredmail of cancellation to the director by either party.