§244. Application for certificate of authority to do business as a health maintenance organization in this state

A. Notwithstanding any other provision of law to the contrary, an application for a certificate of authority shall be made by the corporation to the commissioner in compliance with Subsection C of this Section. No corporation or other person or legal entity shall establish or operate a health maintenance organization in this state without having first obtained a certificate of authority to do so under this Subpart.

B. Every health maintenance organization holding a certificate of authority issued by the commissioner prior to the effective date of this Subpart, may continue to operate as a health maintenance organization under this Subpart, provided that, within ninety days of the effective date, each health maintenance organization in existence on the effective date shall file with the commissioner any additional documents required by Subsection C of this Section that have not been previously filed and shall take the actions necessary for full compliance with this Subpart. Health maintenance organizations organized prior to the effective date of this Subpart and doing business as a Louisiana partnership shall not be required to become a corporate entity, and shall be deemed to meet and satisfy the definition of health maintenance organizations under R.S. 22:242(7). The additional filings shall constitute a reapplication for certification and each such health maintenance organization may continue to operate until the commissioner acts upon said reapplication. In the event that a health maintenance organization in existence on the effective date of this Subpart fails to timely file the additional documents and take the additional actions necessary for full compliance, the commissioner may suspend or revoke the health maintenance organization's certificate of authority as provided in R.S. 22:257.

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 bylaws, rules and regulations, or similar documents, if any, regulating the conduct of the internal affairs of the applicant.

(2) Biographical background information, on a form prescribed by the commissioner, for all of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the board of directors, the principal officers, and each shareholder with over ten percent interest.

(3) A copy of the contract or the form of any contract made, or to be made, between the applicant and any provider of health care services or between the applicant and those persons listed in Paragraph (2) of this Subsection. The payment rendered or to be rendered to such provider or person shall be deemed confidential and shall not be divulged by the commissioner, or his staff, except that payment may be disclosed and become public record in any legislative, administrative, or judicial proceeding or inquiry.

(4) A statement describing the applicant's method of providing for health care services and describing the professional services to be rendered. This statement shall include the health care delivery capabilities of the plan including the number of primary physicians, the number of nonprimary physicians identified by specialty, the numbers and types of licensed health care support staff, and the number of contracted hospitals. For purposes of this subdivision, primary physicians may include general and family practitioners, internists, pediatricians, obstetricians, and gynecologists.

(5) A copy of the form of evidence of coverage to be issued to the enrollees.

(6) A copy of the form of the individual contract which is to be issued to individual subscribers and the form of the group contract which is to be issued to employers, unions, trustees, or other organizations. These contracts shall provide coverage for basic health care services and may at the option of the health maintenance organization, provide coverage for other health care services.

(7) Financial statements verified by an officer or other authorized representative of the applicant showing the applicant's assets, liabilities, and sources of financial support. The commissioner may require that the financial statements be made on forms prescribed by the National Association of Insurance Commissioners. If the applicant's financial affairs are audited by independent certified accountants, a copy of the applicant's most recent certified financial statement shall be deemed to satisfy this requirement unless the commissioner directs that additional or more recent financial information is required for the proper administration of this Subpart.

(8) A description of the proposed method of marketing.

(9) A financial plan which includes a projection of operating results anticipated until the organization has had a net income for at least one year.

(10) A statement as to the sources of working capital as well as any other sources of funding.

(11) A statement reasonably describing the geographic service area or areas to be served by the health maintenance organization; this statement shall also include a listing of principal and other offices maintained in this state by the health maintenance organization.

(12) A description of the enrollee grievance procedures to be utilized which comply with R.S. 22:267.

(13) A description of the procedures and programs for internal review of the quality of health care. Such procedures and programs shall demonstrate adherence to nationally recognized standards which will reasonably lead to plan accreditation under standards recognized by the commissioner. The description of procedures and programs for internal review of the quality of health care shall include an accreditation plan outlining the steps being taken to become fully accredited.

(14) Reinsurance, stop loss, and excess loss insurance or agreements, if any.

(15) A fidelity bond or evidence of insurance which meets the requirements of R.S. 22:250(B).

D.(1) An applicant, or a health maintenance organization holding a certificate of authority granted hereunder, unless otherwise provided for in this Subpart, shall file a notice describing any material modification of the operation. A material modification shall be a change in operations as follows:

(a) A change of ten percent or more of the ownership of the health maintenance organization.

(b) A reduction or expansion of twenty percent or more in the service area of the health maintenance organization.

(c) A change in the evidence of coverage.

(d) A change in the individual contract or the group contract.

(e) A change in reinsurance, stop loss, or excess loss insurance or agreements.

(f) A change in the accreditation standing of the plan or, in the case of a plan which is in the process of being accredited, a change in the accreditation plan approved by the commissioner.

(2) The notice shall be filed with the commissioner prior to the modification. If the commissioner does not disapprove the proposed modification within thirty days of filing, or request a thirty day extension in writing, the modification shall be deemed approved.

Acts 1986, No. 1065, §1; Acts 1995, No. 1231, §1, eff. Sept. 1, 1995; Acts 1996, 1st Ex. Sess., No. 71, §1, eff. May 10, 1996; Acts 1997, No. 238, §1, eff. June 16, 1997; Redesignated from R.S. 22:2004 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.

NOTE: Former R.S. 22:244 redesignated as R.S. 22:2241 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.