Section 432D-2 - Establishment of health maintenance organizations(a) Any person may apply to the commissioner for a certificate of authority to establish and operate a health maintenance organization in compliance with this chapter. No person shall establish or operate a health maintenance organization in this State without obtaining a certificate of authority under this chapter. A foreign corporation may qualify under this chapter, subject to its registration to do business in this State in compliance with all provisions of this chapter and other applicable state laws.(b) Any health maintenance organization which has not previously received a certificate of authority to operate as a health maintenance organization as of January 1, 1996, shall submit an application for a certificate of authority under subsection (c) within one-hundred-eighty days of January 1, 1996. Each applicant may continue to operate until the commissioner acts upon the application. In the event that an application is denied under this chapter, the applicant shall thereafter be treated as a health maintenance organization whose certificate of authority has been revoked.(c) Each application for a certificate of authority shall be verified by an officer or authorized representative of the applicant, shall be in a form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: (1) A copy of the organizational documents of the applicant, such as the articles of incorporation, articles of association, partnership agreement, trust agreement, or other applicable documents, and all amendments thereto;(2) A copy of the bylaws, rules and regulations, or similar document, if any, regulating the conduct of the internal affairs of the applicant;(3) A list of the names, addresses, official positions, and biographical information on forms acceptable to the commissioner of the persons who are to be responsible for the conduct of the affairs and day-to-day operations of the applicant, including all members of the board of directors, board of trustees, executive committee or other governing board or committee, and the principal officers in the case of a corporation, or the partners or members in the case of a partnership or association;(4) A copy of any contract form made or to be made between any class of providers and the health maintenance organization and a copy of any contract made or to be made between third party administrators, marketing consultants, or persons listed in paragraph (3) and the health maintenance organization;(5) A copy of the form of evidence of coverage to be issued to the enrollees;(6) A copy of the form of group contract, if any, which is to be issued to employers, unions, trustees, or other organizations;(7) Financial statements showing the applicant's assets, liabilities, and sources of financial support, and both a copy of the applicant's most recent certified financial statement and an unaudited current financial statement;(8) A financial feasibility plan which includes detailed enrollment projections, the methodology for determining premium rates to be charged during the first twelve months of operations certified by an actuary or other qualified person, a projection of balance sheets, cash flow statements showing any capital expenditures, purchase and sale of investments, deposits with the State, income and expense statements anticipated from the start of operations until the organization has had net income for at least one year, and a statement as to the sources of working capital as well as any other sources of funding;(9) 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;(10) A statement or map reasonably describing the geographic area or areas to be served;(11) A description of the internal grievance procedures to be utilized for the investigation and resolution of enrollee complaints and grievances;(12) A description of the proposed quality assurance program, including the formal organizational structure, methods for developing criteria, procedures for comprehensive evaluation of the quality of care rendered to enrollees, and processes to initiate corrective action and reevaluation when deficiencies in provider or organizational performance are identified;(13) A description of the procedures to be implemented to meet the protection against insolvency requirements in section 432D-8;(14) A list of the names, addresses, and license numbers of all providers or groups of providers with which the health maintenance organization has agreements; and(15) Such other information as the commissioner may require.(d) If the commissioner finds that the applicant has met the requirements for and is fully entitled thereto under the applicable insurance laws, the commissioner shall issue an appropriate certificate of authority to the applicant. If the commissioner does not so find, the commissioner shall deny the applicant the certificate of authority within a reasonable length of time following filing of the application by the applicant. A certificate of authority shall be denied only after the commissioner complies with the requirements of section 432D-14.(e) The commissioner may adopt rules under chapter 91 for the implementation and administration of this chapter.Revision Note
"January 1, 1996" substituted for "the effective date of this chapter".