§ 27-41-4 - Issuance of license. - Rhode Island Statutes

SECTION 27-41-4

   § 27-41-4  Issuance of license. – (a) Upon receipt of an application for issuance of a license, the directorshall transmit copies of the application and accompanying documents to thedirector of health;

   (2) The director of health shall determine whether theapplicant for a license, with respect to health care services to be furnished:

   (i) Has demonstrated that it fulfills the definition of ahealth maintenance organization delineated in § 27-41-2(h);

   (ii) Has demonstrated the willingness and potential abilityto assure that health care services will be provided in a manner to assure bothavailability and accessibility of adequate personnel and facilities and in amanner enhancing availability, accessibility, and continuity of service;

   (iii) Has arrangements, satisfactory to the director ofhealth, for an ongoing quality of health assurance program concerning healthcare processes and outcomes; and

   (iv) Has a procedure, satisfactory to the director of health,to develop, compile, evaluate, and report statistics relating to the cost ofits operations, the pattern of utilization of its services, the availabilityand accessibility of its services, and any other matters that may be reasonablyrequired by the director of health;

   (3) Within a reasonable time following receipt of theapplication for issuance of a license, the director of health shall certify tothe director that the proposed health maintenance organization meets therequirements of subdivision (2) of this section or notify the director that thehealth maintenance organization does not meet those requirements and specify inwhat respects it is deficient.

   (b) The director shall issue or deny a license to any personfiling an application pursuant to § 27-41-3 within a reasonable time ofreceipt of the certification from the director of health. No license shall beissued until the certification is received from the director of health.Issuance of a license shall be granted if the director is satisfied that thefollowing conditions are met:

   (1) The persons responsible for the conduct of the affairs ofthe applicant are competent, trustworthy, and possess good reputations;

   (2) The director of health certifies, in accordance withsubsection (a) of this section, that the health maintenance organization'sproposed plan of operation meets the requirements of subdivision (a)(2) of thissection;

   (3) The health maintenance organization will effectivelyprovide or arrange for the provision of basic health care services on a prepaidbasis, through insurance or otherwise, except to the extent of reasonablerequirements for copayments;

   (4) The health maintenance organization is financiallyresponsible and may reasonably be expected to meet its obligations to enrolleesand prospective enrollees. The director shall require health maintenanceorganizations licensed pursuant to this chapter to maintain protection againstinsolvency. In making these determinations, the director may consider:

   (i) The financial soundness of the health maintenanceorganization's arrangements for health care services and the schedule ofcharges used in connection with them;

   (ii) The adequacy of working capital;

   (iii) Any agreement with an insurance company for insuringthe payment of the cost of health care services or the provision for automaticapplicability of an alternative coverage in the event of discontinuance of thehealth maintenance organization;

   (iv) Any agreement with providers for the provision of healthcare services; and

   (v) Any deposit of securities submitted in accordance with§ 27-41-13 as a guarantee that the obligations will be duly performed;

   (5) The enrollees will be afforded an opportunity toparticipate in matters of policy and operation pursuant to § 27-41-6;

   (6) Nothing in the proposed method of operation, as shown bythe information submitted pursuant to § 27-41-3 or by independentinvestigation, is contrary to the public interest; and

   (7) Certification by the director of health that anydeficiencies cited by the director of health have been or will be corrected.

   (c) A license shall be denied only after compliance with therequirements of § 27-41-20.