§ 38-33-50 — Powers of health maintenance organization; notice prior to exercise of powers.

(A) The powers of a health maintenance organization include, but are not limited to, the following: (1) the purchase, lease, construction, renovation, operation, or maintenance of hospitals, medical facilities, or both, and their ancillary equipment, and such property as may reasonably be required for its principal office or for such purposes as may be necessary in the transaction of the business of the organization; (2) the making of loans to a medical group under contract with it in furtherance of its program or the making of loans to a corporation under its control for the purpose of acquiring or constructing medical facilities and hospitals or in furtherance of a program providing health care services to enrollees; (3) the furnishing of health care services through providers which are under contract with or employed by the health maintenance organization; (4) the contracting with any person for the performance on its behalf of certain functions such as marketing, enrollment, and administration; (5) the contracting with an insurance company licensed in this State for the provision of insurance, indemnity, or reimbursement against the cost of health care services provided by the health maintenance organization; (6) the offering of other health care services, in addition to basic health care services; (7) providing services included in federal health care programs such as "Medicare", "Medicaid", "Champus", and veterans administration and other health programs funded in whole or in part by federal funds, in accordance with the laws governing these programs. (8) the offering of an out-of-network coverage under a point of service option; the Director of the Department of Insurance shall, by regulations and/or policy bulletin, implement the provisions of this item. (B)(1) A health maintenance organization shall file notice, with adequate supporting information, with the director or his designee prior to the exercise of any power granted in subsection (A)(1), (2), (4), or (7). The director or his designee may disapprove such exercise of power if in his opinion it would adversely affect the financial soundness of the health maintenance organization and endanger its ability to meet its obligations. If the director or his designee does not disapprove within thirty days of the filing, it is considered approved. (2) The department may promulgate regulations exempting from the filing requirement of item (1) those activities having a de minimis effect. (C) Any contract issued by a Health Maintenance Organization in this State on or after January 1, 1988, may include provision for subrogation by the Health Maintenance Organization to the enrollee's right of recovery against a liable third party for not more than the amount of insurance benefits that the Health Maintenance Organization has paid previously in relation to the enrollee's injury by the liable third party. If the director or his designee, upon being petitioned by the enrollee, determines that the exercise of subrogation by a Health Maintenance Organization is inequitable and commits an injustice to the enrollee, subrogation is not allowed. Attorney's fees and costs must be paid by the Health Maintenance Organization from the amounts recovered. This determination by the director or his designee may be appealed to the Administrative Law Court as provided by law in accordance with Section 38-3-210.

Legislative History

HISTORY: Former 1976 Code SECTION 38-33-50 [1962 Code SECTION 37-335; 1968 (55) 2407; 1978 Act No. 441 SECTION 5] recodified as SECTION 38-67-50 by 1987 Act No. 155, SECTION 1; Former 1976 Code SECTION 38-25-50 [1962 Code SECTION 37-1135; 1974 (58) 2378] recodified as SECTION 38-33-50 by 1987 Act No. 155, SECTION 1; 1987 Act No. 83, SECTION 1 [amendment to former 1976 Code SECTION 38-25-50 transferred to SECTION 38-33-50 by 1987 Act No. 155, SECTION 24]; 1993 Act No. 181, SECTION 633; 1999 Act No. 98, SECTION 1; 2000 Act No. 380, SECTION 2A.