§ 58‑67‑10. Establishment of health maintenance organizations.
(a) Notwithstanding anylaw of this State to the contrary, any person may apply to the Commissioner fora license to establish and operate a health maintenance organization incompliance with this Article. No person shall establish or operate a healthmaintenance organization in this State, nor sell or offer to sell, or solicitoffers to purchase or receive advance or periodic consideration in conjunctionwith a health maintenance organization without obtaining a license under thisArticle. A foreign corporation may qualify under this Article, subject to itsfull compliance with Article 16 of this Chapter.
(b) (1) Itis specifically the intention of this section to permit such persons as were providinghealth services on a prepaid basis on July 1, 1977, or receiving federal fundsunder Section 254(c) of Title 42, U.S. Code, as a community health center, tocontinue to operate in the manner which they have heretofore operated.
(2) Notwithstanding anythingcontained in this Article to the contrary, any person can provide healthservices on a fee for service basis to individuals who are not enrollees of theorganization, and to enrollees for services not covered by the contract,provided that the volume of services in this manner shall not be such as toaffect the ability of the health maintenance organization to provide on anadequate and timely basis those services to its enrolled members which it hascontracted to furnish under the enrollment contract.
(3) This Article shallnot apply to any employee benefit plan to the extent that the Federal EmployeeRetirement Income Security Act of 1974 preempts State regulation thereof.
(3a) This Article does notapply to any prepaid health service or capitation arrangement implemented oradministered by the Department of Health and Human Services or itsrepresentatives, pursuant to 42 U.S.C. § 1396n or Chapter 108A of the GeneralStatutes, a provider sponsored organization or other organization certified,qualified, or otherwise approved by the Division of Medical Assistance of theDepartment of Health and Human Services pursuant to Article 17 of Chapter 131Eof the General Statutes, or to any provider of health care servicesparticipating in such a prepaid health service or capitation arrangement.Article; provided, however, that to the extent this Article applies to any suchperson acting as a subcontractor to a Health Maintenance Organization licensedin this State, that person shall be considered a single service HealthMaintenance Organization for the purpose of G.S. 58‑67‑20(4), G.S.58‑67‑25, and G.S. 58‑67‑110.
(4) Except as providedin paragraphs (1), (2), (3), and (3a) of this subsection, the persons to whomthese paragraphs are applicable shall be required to comply with all provisionscontained in this Article.
(c) Each applicationfor a license shall be verified by an officer or authorized representative ofthe applicant, shall be in a form prescribed by the Commissioner, and shall beset forth or be accompanied by the following:
(1) A copy of the basicorganizational document, if any, of the applicant such as the articles ofincorporation, articles of association, partnership agreement, trust agreement,or other applicable documents, and all amendments thereto. Any proposedarticles of incorporation for the formation of a domestic health maintenanceorganization shall be filed with the Commissioner. The Commissioner shallexamine the proposed articles. If the Commissioner finds that the proposedarticles meet the requirements of the insurance laws of this State andotherwise determines that the articles should be approved, the Commissionershall place a certificate of approval on the articles and submit the approvedarticles to the Secretary of State;
(2) A copy of thebylaws, rules and regulations, or similar document, if any, regulating theconduct of the internal affairs of the applicant;
(3) A list of the names,addresses, and official positions of persons who are to be responsible for theconduct of the affairs of the applicant, including all members of the board ofdirectors, board of trustees, executive committee, or other governing board orcommittee, the principal officers in the case of a corporation, and thepartners or members in the case of a partnership or association;
(4) A copy of anycontract form made or to be made between any class of providers and the HMO anda copy of any contract form made or to be made between third partyadministrators, marketing consultants, or persons listed in subdivision (3) ofthis subsection and the HMO;
(5) A statementgenerally describing the health maintenance organization, its health care planor plans, facilities, and personnel;
(6) A copy of the formof evidence of coverage to be issued to the enrollees;
(7) A copy of the formof the group contract, if any, which is to be issued to employers, unions,trustees, or other organizations;
(8) Financial statementsshowing the applicant's assets, liabilities, and sources of financial support.If the applicant's financial affairs are audited by independent certifiedpublic accountants, a copy of the applicant's most recent regular certifiedfinancial statement shall be deemed to satisfy this requirement unless theCommissioner directs that additional or more recent financial information isrequired for the proper administration of this Article;
(9) A financialfeasibility plan, which includes detailed enrollment projections, themethodology for determining premium rates to be charged during the first 12months of operations certified by an actuary or a recognized actuarialconsultant, a projection of balance sheets, cash flow statements, showing anycapital expenditures, purchase and sale of investments and deposits with theState, and income and expense statements anticipated from the start ofoperations until the organization has had net income for at least one year; anda statement as to the sources of working capital as well as any other sourcesof funding;
(10) A power of attorneyduly executed by such applicant, if not domiciled in this State, appointing theCommissioner and his successors in office, and duly authorized deputies, as thetrue and lawful attorney of such applicant in and for this State upon whom alllawful process in any legal action or proceeding against the health maintenanceorganization on a cause of action arising in this State may be served;
(11) A statementreasonably describing the geographic area or areas to be served;
(12) A description of theprocedures to be implemented to meet the protection against insolvencyrequirements of G.S. 58‑67‑110;
(13) A description of theinternal grievance procedures to be utilized for the investigation andresolution of enrollee complaints and grievances; and
(14) Such otherinformation as the Commissioner may require to make the determinations requiredin G.S. 58‑67‑20.
(d) (1) Ahealth maintenance organization shall file a notice describing any significantmodification of the operation set out in the information required by subsection(c) of this section. Such notice shall be filed with the Commissioner prior tothe modification. If the Commissioner does not disapprove within 90 days afterthe filing, such modification shall be deemed to be approved. Changes subjectto the terms of this section include expansion of service area, changes inprovider contract forms and group contract forms where the distribution of riskis significantly changed, and any other changes that the Commissioner describesin properly promulgated rules. Every HMO shall report to the Commissioner forhis information material changes in the provider network, the addition ordeletion of Medicare risk or Medicaid risk arrangements and the addition ordeletion of employer groups that exceed ten percent (10%) of the healthmaintenance organization's book of business or such other information as theCommissioner may require. Such information shall be filed with the Commissionerwithin 15 days after implementation of the reported changes. Every HMO shallfile with the Commissioner all subsequent changes in the information or formsthat are required by this Article to be filed with the Commissioner.
(1a) Any proposed changeto the articles of incorporation shall be filed with the Commissioner. TheCommissioner shall examine the proposed change to the articles. If theCommissioner determines that the proposed change should be approved, theCommissioner shall place a certificate of approval on the change and submit theapproved change to the Secretary of State.
(2) The Commissioner maypromulgate rules and regulations exempting from the filing requirements ofsubdivision (1) those items he deems unnecessary. (1977, c. 580, s. 1; 1979, c.876, s. 1; 1983, c. 386, s. 1; 1985 (Reg. Sess., 1986), c. 1027, s. 49; 1987,c. 631, ss. 6, 7; 1989, c. 776, ss. 4‑8; 1991, c. 720, ss. 41, 69; 1993,c. 529, s. 7.2; 1993 (Reg. Sess., 1994), c. 769, s. 25.48; 1997‑443, s.11A.118(a); 1998‑227, s. 2; 2005‑215, s. 23.)
§ 58‑67‑10. Establishment of health maintenance organizations.
(a) Notwithstanding anylaw of this State to the contrary, any person may apply to the Commissioner fora license to establish and operate a health maintenance organization incompliance with this Article. No person shall establish or operate a healthmaintenance organization in this State, nor sell or offer to sell, or solicitoffers to purchase or receive advance or periodic consideration in conjunctionwith a health maintenance organization without obtaining a license under thisArticle. A foreign corporation may qualify under this Article, subject to itsfull compliance with Article 16 of this Chapter.
(b) (1) Itis specifically the intention of this section to permit such persons as were providinghealth services on a prepaid basis on July 1, 1977, or receiving federal fundsunder Section 254(c) of Title 42, U.S. Code, as a community health center, tocontinue to operate in the manner which they have heretofore operated.
(2) Notwithstanding anythingcontained in this Article to the contrary, any person can provide healthservices on a fee for service basis to individuals who are not enrollees of theorganization, and to enrollees for services not covered by the contract,provided that the volume of services in this manner shall not be such as toaffect the ability of the health maintenance organization to provide on anadequate and timely basis those services to its enrolled members which it hascontracted to furnish under the enrollment contract.
(3) This Article shallnot apply to any employee benefit plan to the extent that the Federal EmployeeRetirement Income Security Act of 1974 preempts State regulation thereof.
(3a) This Article does notapply to any prepaid health service or capitation arrangement implemented oradministered by the Department of Health and Human Services or itsrepresentatives, pursuant to 42 U.S.C. § 1396n or Chapter 108A of the GeneralStatutes, a provider sponsored organization or other organization certified,qualified, or otherwise approved by the Division of Medical Assistance of theDepartment of Health and Human Services pursuant to Article 17 of Chapter 131Eof the General Statutes, or to any provider of health care servicesparticipating in such a prepaid health service or capitation arrangement.Article; provided, however, that to the extent this Article applies to any suchperson acting as a subcontractor to a Health Maintenance Organization licensedin this State, that person shall be considered a single service HealthMaintenance Organization for the purpose of G.S. 58‑67‑20(4), G.S.58‑67‑25, and G.S. 58‑67‑110.
(4) Except as providedin paragraphs (1), (2), (3), and (3a) of this subsection, the persons to whomthese paragraphs are applicable shall be required to comply with all provisionscontained in this Article.
(c) Each applicationfor a license shall be verified by an officer or authorized representative ofthe applicant, shall be in a form prescribed by the Commissioner, and shall beset forth or be accompanied by the following:
(1) A copy of the basicorganizational document, if any, of the applicant such as the articles ofincorporation, articles of association, partnership agreement, trust agreement,or other applicable documents, and all amendments thereto. Any proposedarticles of incorporation for the formation of a domestic health maintenanceorganization shall be filed with the Commissioner. The Commissioner shallexamine the proposed articles. If the Commissioner finds that the proposedarticles meet the requirements of the insurance laws of this State andotherwise determines that the articles should be approved, the Commissionershall place a certificate of approval on the articles and submit the approvedarticles to the Secretary of State;
(2) A copy of thebylaws, rules and regulations, or similar document, if any, regulating theconduct of the internal affairs of the applicant;
(3) A list of the names,addresses, and official positions of persons who are to be responsible for theconduct of the affairs of the applicant, including all members of the board ofdirectors, board of trustees, executive committee, or other governing board orcommittee, the principal officers in the case of a corporation, and thepartners or members in the case of a partnership or association;
(4) A copy of anycontract form made or to be made between any class of providers and the HMO anda copy of any contract form made or to be made between third partyadministrators, marketing consultants, or persons listed in subdivision (3) ofthis subsection and the HMO;
(5) A statementgenerally describing the health maintenance organization, its health care planor plans, facilities, and personnel;
(6) A copy of the formof evidence of coverage to be issued to the enrollees;
(7) A copy of the formof the group contract, if any, which is to be issued to employers, unions,trustees, or other organizations;
(8) Financial statementsshowing the applicant's assets, liabilities, and sources of financial support.If the applicant's financial affairs are audited by independent certifiedpublic accountants, a copy of the applicant's most recent regular certifiedfinancial statement shall be deemed to satisfy this requirement unless theCommissioner directs that additional or more recent financial information isrequired for the proper administration of this Article;
(9) A financialfeasibility plan, which includes detailed enrollment projections, themethodology for determining premium rates to be charged during the first 12months of operations certified by an actuary or a recognized actuarialconsultant, a projection of balance sheets, cash flow statements, showing anycapital expenditures, purchase and sale of investments and deposits with theState, and income and expense statements anticipated from the start ofoperations until the organization has had net income for at least one year; anda statement as to the sources of working capital as well as any other sourcesof funding;
(10) A power of attorneyduly executed by such applicant, if not domiciled in this State, appointing theCommissioner and his successors in office, and duly authorized deputies, as thetrue and lawful attorney of such applicant in and for this State upon whom alllawful process in any legal action or proceeding against the health maintenanceorganization on a cause of action arising in this State may be served;
(11) A statementreasonably describing the geographic area or areas to be served;
(12) A description of theprocedures to be implemented to meet the protection against insolvencyrequirements of G.S. 58‑67‑110;
(13) A description of theinternal grievance procedures to be utilized for the investigation andresolution of enrollee complaints and grievances; and
(14) Such otherinformation as the Commissioner may require to make the determinations requiredin G.S. 58‑67‑20.
(d) (1) Ahealth maintenance organization shall file a notice describing any significantmodification of the operation set out in the information required by subsection(c) of this section. Such notice shall be filed with the Commissioner prior tothe modification. If the Commissioner does not disapprove within 90 days afterthe filing, such modification shall be deemed to be approved. Changes subjectto the terms of this section include expansion of service area, changes inprovider contract forms and group contract forms where the distribution of riskis significantly changed, and any other changes that the Commissioner describesin properly promulgated rules. Every HMO shall report to the Commissioner forhis information material changes in the provider network, the addition ordeletion of Medicare risk or Medicaid risk arrangements and the addition ordeletion of employer groups that exceed ten percent (10%) of the healthmaintenance organization's book of business or such other information as theCommissioner may require. Such information shall be filed with the Commissionerwithin 15 days after implementation of the reported changes. Every HMO shallfile with the Commissioner all subsequent changes in the information or formsthat are required by this Article to be filed with the Commissioner.
(1a) Any proposed changeto the articles of incorporation shall be filed with the Commissioner. TheCommissioner shall examine the proposed change to the articles. If theCommissioner determines that the proposed change should be approved, theCommissioner shall place a certificate of approval on the change and submit theapproved change to the Secretary of State.
(2) The Commissioner maypromulgate rules and regulations exempting from the filing requirements ofsubdivision (1) those items he deems unnecessary. (1977, c. 580, s. 1; 1979, c.876, s. 1; 1983, c. 386, s. 1; 1985 (Reg. Sess., 1986), c. 1027, s. 49; 1987,c. 631, ss. 6, 7; 1989, c. 776, ss. 4‑8; 1991, c. 720, ss. 41, 69; 1993,c. 529, s. 7.2; 1993 (Reg. Sess., 1994), c. 769, s. 25.48; 1997‑443, s.11A.118(a); 1998‑227, s. 2; 2005‑215, s. 23.)
§ 58‑67‑10. Establishment of health maintenance organizations.
(a) Notwithstanding anylaw of this State to the contrary, any person may apply to the Commissioner fora license to establish and operate a health maintenance organization incompliance with this Article. No person shall establish or operate a healthmaintenance organization in this State, nor sell or offer to sell, or solicitoffers to purchase or receive advance or periodic consideration in conjunctionwith a health maintenance organization without obtaining a license under thisArticle. A foreign corporation may qualify under this Article, subject to itsfull compliance with Article 16 of this Chapter.
(b) (1) Itis specifically the intention of this section to permit such persons as were providinghealth services on a prepaid basis on July 1, 1977, or receiving federal fundsunder Section 254(c) of Title 42, U.S. Code, as a community health center, tocontinue to operate in the manner which they have heretofore operated.
(2) Notwithstanding anythingcontained in this Article to the contrary, any person can provide healthservices on a fee for service basis to individuals who are not enrollees of theorganization, and to enrollees for services not covered by the contract,provided that the volume of services in this manner shall not be such as toaffect the ability of the health maintenance organization to provide on anadequate and timely basis those services to its enrolled members which it hascontracted to furnish under the enrollment contract.
(3) This Article shallnot apply to any employee benefit plan to the extent that the Federal EmployeeRetirement Income Security Act of 1974 preempts State regulation thereof.
(3a) This Article does notapply to any prepaid health service or capitation arrangement implemented oradministered by the Department of Health and Human Services or itsrepresentatives, pursuant to 42 U.S.C. § 1396n or Chapter 108A of the GeneralStatutes, a provider sponsored organization or other organization certified,qualified, or otherwise approved by the Division of Medical Assistance of theDepartment of Health and Human Services pursuant to Article 17 of Chapter 131Eof the General Statutes, or to any provider of health care servicesparticipating in such a prepaid health service or capitation arrangement.Article; provided, however, that to the extent this Article applies to any suchperson acting as a subcontractor to a Health Maintenance Organization licensedin this State, that person shall be considered a single service HealthMaintenance Organization for the purpose of G.S. 58‑67‑20(4), G.S.58‑67‑25, and G.S. 58‑67‑110.
(4) Except as providedin paragraphs (1), (2), (3), and (3a) of this subsection, the persons to whomthese paragraphs are applicable shall be required to comply with all provisionscontained in this Article.
(c) Each applicationfor a license shall be verified by an officer or authorized representative ofthe applicant, shall be in a form prescribed by the Commissioner, and shall beset forth or be accompanied by the following:
(1) A copy of the basicorganizational document, if any, of the applicant such as the articles ofincorporation, articles of association, partnership agreement, trust agreement,or other applicable documents, and all amendments thereto. Any proposedarticles of incorporation for the formation of a domestic health maintenanceorganization shall be filed with the Commissioner. The Commissioner shallexamine the proposed articles. If the Commissioner finds that the proposedarticles meet the requirements of the insurance laws of this State andotherwise determines that the articles should be approved, the Commissionershall place a certificate of approval on the articles and submit the approvedarticles to the Secretary of State;
(2) A copy of thebylaws, rules and regulations, or similar document, if any, regulating theconduct of the internal affairs of the applicant;
(3) A list of the names,addresses, and official positions of persons who are to be responsible for theconduct of the affairs of the applicant, including all members of the board ofdirectors, board of trustees, executive committee, or other governing board orcommittee, the principal officers in the case of a corporation, and thepartners or members in the case of a partnership or association;
(4) A copy of anycontract form made or to be made between any class of providers and the HMO anda copy of any contract form made or to be made between third partyadministrators, marketing consultants, or persons listed in subdivision (3) ofthis subsection and the HMO;
(5) A statementgenerally describing the health maintenance organization, its health care planor plans, facilities, and personnel;
(6) A copy of the formof evidence of coverage to be issued to the enrollees;
(7) A copy of the formof the group contract, if any, which is to be issued to employers, unions,trustees, or other organizations;
(8) Financial statementsshowing the applicant's assets, liabilities, and sources of financial support.If the applicant's financial affairs are audited by independent certifiedpublic accountants, a copy of the applicant's most recent regular certifiedfinancial statement shall be deemed to satisfy this requirement unless theCommissioner directs that additional or more recent financial information isrequired for the proper administration of this Article;
(9) A financialfeasibility plan, which includes detailed enrollment projections, themethodology for determining premium rates to be charged during the first 12months of operations certified by an actuary or a recognized actuarialconsultant, a projection of balance sheets, cash flow statements, showing anycapital expenditures, purchase and sale of investments and deposits with theState, and income and expense statements anticipated from the start ofoperations until the organization has had net income for at least one year; anda statement as to the sources of working capital as well as any other sourcesof funding;
(10) A power of attorneyduly executed by such applicant, if not domiciled in this State, appointing theCommissioner and his successors in office, and duly authorized deputies, as thetrue and lawful attorney of such applicant in and for this State upon whom alllawful process in any legal action or proceeding against the health maintenanceorganization on a cause of action arising in this State may be served;
(11) A statementreasonably describing the geographic area or areas to be served;
(12) A description of theprocedures to be implemented to meet the protection against insolvencyrequirements of G.S. 58‑67‑110;
(13) A description of theinternal grievance procedures to be utilized for the investigation andresolution of enrollee complaints and grievances; and
(14) Such otherinformation as the Commissioner may require to make the determinations requiredin G.S. 58‑67‑20.
(d) (1) Ahealth maintenance organization shall file a notice describing any significantmodification of the operation set out in the information required by subsection(c) of this section. Such notice shall be filed with the Commissioner prior tothe modification. If the Commissioner does not disapprove within 90 days afterthe filing, such modification shall be deemed to be approved. Changes subjectto the terms of this section include expansion of service area, changes inprovider contract forms and group contract forms where the distribution of riskis significantly changed, and any other changes that the Commissioner describesin properly promulgated rules. Every HMO shall report to the Commissioner forhis information material changes in the provider network, the addition ordeletion of Medicare risk or Medicaid risk arrangements and the addition ordeletion of employer groups that exceed ten percent (10%) of the healthmaintenance organization's book of business or such other information as theCommissioner may require. Such information shall be filed with the Commissionerwithin 15 days after implementation of the reported changes. Every HMO shallfile with the Commissioner all subsequent changes in the information or formsthat are required by this Article to be filed with the Commissioner.
(1a) Any proposed changeto the articles of incorporation shall be filed with the Commissioner. TheCommissioner shall examine the proposed change to the articles. If theCommissioner determines that the proposed change should be approved, theCommissioner shall place a certificate of approval on the change and submit theapproved change to the Secretary of State.
(2) The Commissioner maypromulgate rules and regulations exempting from the filing requirements ofsubdivision (1) those items he deems unnecessary. (1977, c. 580, s. 1; 1979, c.876, s. 1; 1983, c. 386, s. 1; 1985 (Reg. Sess., 1986), c. 1027, s. 49; 1987,c. 631, ss. 6, 7; 1989, c. 776, ss. 4‑8; 1991, c. 720, ss. 41, 69; 1993,c. 529, s. 7.2; 1993 (Reg. Sess., 1994), c. 769, s. 25.48; 1997‑443, s.11A.118(a); 1998‑227, s. 2; 2005‑215, s. 23.)
