56-32-117 - Rehabilitation, liquidation, conservation or supervision of HMOs. - Tennessee Statutes

56-32-117. Rehabilitation, liquidation, conservation or supervision of HMOs.

(a)  Any rehabilitation, liquidation, conservation or supervision of an HMO shall be deemed to be the rehabilitation, liquidation, conservation or supervision of an insurance company and shall be conducted under the supervision of the commissioner pursuant to chapter 9 of this title. The commissioner may apply for an order directing the commissioner to rehabilitate, liquidate, conserve or supervise an HMO upon any one (1) or more grounds set out in chapter 9 of this title, or when in the commissioner's opinion the continued operation of the HMO would be hazardous either to the enrollees or to the people of this state. Enrollees shall have the same priority in the event of liquidation or rehabilitation as the law provides to policyholders of an insurer.

(b)  A claim by a health care provider for an uncovered expenditure has the same priority as an enrollee; provided, that the provider of services agrees not to assert the claim against any enrollee of the HMO.

(c)  (1)  For the purposes of supervision, rehabilitation, or liquidation of HMOs that participate in the TennCare program under Title XIX of the federal Social Security Act, compiled in 42 U.S.C. § 1396 et seq., or any successor to the TennCare program, and in addition to the powers and duties set forth in this chapter, the department or the chancery court shall have the power to examine and investigate the affairs of every person, entity, HMO, an affiliate of the parent of the HMO, or an affiliate of the HMO, in order to determine whether the person, entity, HMO, an affiliate of the parent of the HMO, or an affiliate of the HMO, is operating in accordance with this chapter and title 71, chapter 5. For purposes of this subdivision (c)(1), “affiliate” means any entity that exercises control over or is controlled by the HMO, directly or indirectly through:

          (A)  Equity ownership of voting securities;

          (B)  Common managerial control; or

          (C)  Collusive participation by the management of the HMO and affiliate in the management of the HMO or the affiliate.

     (2)  For purposes of subdivision (c)(1), “person” includes an individual, insurer, company, association, organization, Lloyds, society, reciprocal insurer or interinsurance exchange, partnership, syndicate, business trust, corporation, agent, general agent, broker, solicitor, service representative, adjuster, and every legal entity.

[Acts 1986, ch. 713, § 17; 1999, ch. 322, §§ 4, 7; 2000, ch. 708, §§ 1, 7; T.C.A. § 56-32-217.]