§ 24-A §4204 — Issuance of certificate of authority

1.
Procedure upon receipt of an application for issuance of a certificate of authority.
2.
2-A.
The superintendent shall issue or deny a certificate of authority to any person filing an application pursuant to section 4203 within 50 business days of receipt of the notice from the Department of Health and Human Services that the applicant has been granted a certificate of need or, if a certificate of need is not required, within 50 business days of receipt of notice from the Department of Health and Human Services that the applicant is in compliance with the requirements of paragraph B. Issuance of a certificate of authority shall be granted upon payment of the application fee prescribed in section 4220 if the superintendent is satisfied that the following conditions are met.
3.
3-A.
Investments.
The health maintenance organization shall invest funds only in accordance with chapter 13‑A, except as follows.
4.
Uncovered expenditures involving deposit.
A health maintenance organization shall deposit with the superintendent or, at the discretion of the superintendent, with any organization or trustee acceptable to the superintendent through which a custodial or controlled account is maintained, cash or securities that are acceptable to the superintendent and that at all times are maintained in a fair market value of not less than an amount equal to the greater of $100,000 or 120% of the health maintenance organization's liability for uncovered expenditures for enrollees as of the end of the most recent calendar quarter, including but not limited to, liability for incurred but not reported claims. If the health maintenance organization's liability for uncovered expenditures increases more than 10% prior to the end of the calendar quarter, the health maintenance organization must, within 10 days of the determination, deposit an amount sufficient to ensure compliance with this section. In the case of domestic health maintenance organizations, "enrollees" for purposes of this subsection means all enrollees of the organization regardless of residence. In the case of foreign health maintenance organizations, "enrollees" for purposes of this subsection means only those enrollees who are residents of this State.
5.
Liabilities.
Every health maintenance organization shall, when determining liabilities, include an amount estimated in the aggregate to provide for any unearned premium and for the payment of all claims for health care expenditures that have been incurred, whether reported or unreported, that are unpaid, and for which the organization is or may be liable, and to provide for the expense of adjustment or settlement of those claims.
6.
Hold harmless.
Every contract between a health maintenance organization and a participating provider of health care services must be in writing and must set forth that in the event the health maintenance organization fails to pay for health care services as set forth in the contract, the subscriber or enrollee may not be liable to the provider for any sums owed by the health maintenance organization.
7.
Continuation of benefits.
The superintendent shall require that each health maintenance organization have a plan for handling insolvency that allows for continuation of benefits for the duration of the contract period for which premiums have been paid and continuation of benefits to covered persons who are confined on the date of insolvency in an inpatient facility until those covered persons are discharged or upon expiration of benefits. In considering such a plan, the superintendent may require:
8.
Notice of termination.
An agreement to provide health care services between a provider and a health maintenance organization must require that, if the provider terminates that agreement, the provider shall give the health maintenance organization not less than 60 days' notice in advance of termination. That agreement must not require more than 90 days' notice after an initial participation period not to exceed 6 months. If the health maintenance organization has a net loss of 5 or more primary care physicians in any county in any 30-day period, the health maintenance organization shall notify the Bureau of Insurance in writing within 10 days of acquiring knowledge of that loss.
9.
Denial.
A certificate of authority may be denied only after compliance with the requirements of section 4219.

Legislative History

PL 1975, c. 293, §5 (AMD). PL 1975, c. 503 (NEW). PL 1979, c. 216, §§2-5 (AMD). PL 1981, c. 501, §§49-51 (AMD). PL 1985, c. 704, §6 (AMD). PL 1989, c. 345, §1 (AMD). PL 1989, c. 842, §§8-13 (AMD). PL 1991, c. 709, §3 (AMD). RR 1993, c. 1, §67 (COR). PL 1993, c. 313, §32 (AMD). PL 1993, c. 702, §§A12,B1 (AMD). PL 1995, c. 332, §§I1,2,O2 (AMD). PL 1995, c. 673, §D3 (AMD). PL 1999, c. 222, §2 (AMD). PL 1999, c. 715, §19 (AMD). PL 2001, c. 72, §19 (AMD). PL 2001, c. 88, §§1,2 (AMD). PL 2001, c. 410, §A8 (AMD). PL 2003, c. 510, §§A20,21 (AMD). PL 2003, c. 689, §B6 (REV). PL 2007, c. 466, Pt. D, §7 (AMD). PL 2011, c. 90, Pt. F, §6 (AMD). PL 2013, c. 588, Pt. A, §29 (AMD). RR 2021, c. 1, Pt. B, §342 (COR).