A. Any certificate of authority issued under the provisions of the Health Maintenance Organization Law may be suspended or revoked, and any application for a certificate of authority may be denied if the superintendent finds that:

(1) the health maintenance organization is operating significantly in contravention of its basic organizational document or in a manner contrary to that described in any other information submitted under Section 59A-46-3 NMSA 1978, unless amendments to such submissions have been filed with and approved by the superintendent;

(2) the health maintenance organization issues an evidence of coverage or uses a schedule of charges for health care services that does not comply with the requirements of Sections 59A-46-8 and 59A-46-16 NMSA 1978;

(3) the health maintenance organization does not provide or arrange for basic health care services;

(4) the secretary of health has certified to the superintendent that:

(a) the health maintenance organization does not meet the requirements of Paragraph (2) of Subsection A of Section 59A-46-4 NMSA 1978; or

(b) the health maintenance organization is unable to fulfill its obligations to furnish health care services;

(5) the health maintenance organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees;

(6) the health maintenance organization has failed to correct, within the time prescribed by Subsection C of this section, any deficiency occurring due to the health maintenance organization's prescribed minimum net worth being impaired;

(7) the health maintenance organization has failed to implement the grievance procedures required by Section 59A-46-11 NMSA 1978 in a reasonable manner to resolve valid complaints;

(8) the health maintenance organization, or any person on its behalf, has engaged in any practice that under Chapter 59A, Article 16 NMSA 1978 is defined or prohibited as, or determined to be, an unfair method of competition, or an unfair or deceptive act or practice, or fraudulent;

(9) the continued operation of the health maintenance organization would be hazardous to its enrollees; or

(10) the health maintenance organization has otherwise failed substantially to comply with the provisions of the Health Maintenance Organization Law.

B. In addition to or in lieu of suspension or revocation of a certificate of authority pursuant to this section, the applicant or health maintenance organization may be subjected to an administrative penalty of up to five thousand dollars ($5,000) for each cause for suspension or revocation, but if the violation is willful or intentional, the administrative penalty may be up to ten thousand dollars ($10,000).

C. Whenever the superintendent finds that the net worth maintained by any health maintenance organization subject to the provisions of the Health Maintenance Organization Law is less than the minimum net worth required to be maintained pursuant to the provisions of Section 59A-46-13 NMSA 1978, he shall give written notice to the health maintenance organization of the amount of the deficiency and require the health maintenance organization to:

(1) file with the superintendent a plan for correction of the deficiency acceptable to the superintendent; and

(2) correct the deficiency within a reasonable time, not to exceed sixty days, unless an extension of time, not to exceed sixty additional days, is granted by the superintendent.

D. A deficiency found to exist by the superintendent pursuant to the provisions of Subsection C of this section shall be deemed an impairment, and failure to correct the impairment in the prescribed time shall be grounds for suspension or revocation of the certificate of authority of the health maintenance organization or for placing it in conservation, rehabilitation or liquidation.

E. Unless allowed by the superintendent no health maintenance organization or person acting on its behalf may, directly or indirectly, renew, issue or deliver any certificate, agreement or contract of coverage in this state, for which a premium is charged or collected, when the health maintenance organization writing such coverage is impaired, and the fact of such impairment is known to the health maintenance organization or to such person. However, the existence of an impairment shall not prevent the issuance or renewal of a certificate, agreement or contract when the enrollee exercises an option granted under the plan to obtain a new, renewed or converted coverage.

F. A certificate of authority shall not be suspended or revoked or an application for a certificate of authority denied or an administrative penalty imposed unless:

(1) the suspension, revocation, denial or imposition is by written order and is sent to the health maintenance organization or applicant by certified or registered mail; and

(2) the written order states the grounds, charges or conduct on which the suspension, revocation, denial or imposition is based.

G. The health maintenance organization or applicant may in writing request a hearing within thirty days from the date of mailing of an order suspending or revoking a certificate of authority, denying an application or imposing an administrative penalty. If no written request is made, such order shall be final upon the expiration of the thirty days.

H. If the health maintenance organization or applicant requests a hearing pursuant to the provisions of Subsection G of this section, the superintendent shall issue a written notice of hearing and send it to the health maintenance organization or applicant by certified or registered mail stating:

(1) a specific time for the hearing, which may not be less than twenty nor more than thirty days after mailing of the notice of hearing; and

(2) a specific place for the hearing, which may be either in Santa Fe county or in the county where the health maintenance organization's or applicant's principal place of business is located.

I. After a hearing held pursuant to the provisions of Subsection H of this section or upon failure of the health maintenance organization to appear at the hearing, the superintendent shall take whatever action he deems necessary based on written findings and shall mail his decision to the health maintenance organization or applicant.

J. The provisions of Chapter 59A, Article 4 NMSA 1978 shall apply to proceedings under this section to the extent they are not in conflict with Subsection H of this section.

K. When the certificate of authority of a health maintenance organization is suspended, the health maintenance organization shall not, during the period of such suspension, enroll any additional enrollees except newborn children or other newly acquired dependents of existing enrollees, and shall not engage in any advertising or solicitation whatsoever.

L. When the certificate of authority of a health maintenance organization is revoked, that organization shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs, and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of the organization. It shall engage in no further advertising or solicitation whatsoever. The superintendent may, by written order, permit such further operation of the organization as he may find to be in the best interest of enrollees, to the end that enrollees will be afforded the greatest practical opportunity to obtain continuing health care coverage.

History: 1978 Comp., § 59A-46-20, enacted by Laws 1993, ch. 266, § 20.

Repeals and reenactments. — Laws 1993, ch. 266, § 43 repealed former 59A-46-20 NMSA 1978, as enacted by Laws 1984, ch. 127, § 867, related to administrative procedures, and Laws 1993, ch. 266, § 20 enacted a new section, effective January 1, 1994.