Subchapter G. HMOS
GENERALLY Sec.
9.621. Applicability.
9.622. Prohibition against uncertified HMOs.
9.623. Preapplication development activities.
APPLICATION FOR CERTIFICATE OF AUTHORITY
9.631. Content of an application for an HMO certificate of authority.
9.632. HMO certificate of authority review by the Department.
9.633. Location of HMO activities, staff and materials.
9.634. Delegation of HMO operations.
9.635. Issuance of a certificate of authority to a foreign HMO.
OPERATIONAL STANDARDS
9.651. HMO provision and coverage of basic health services to enrollees.
9.652. HMO provision of other than basic health services to enrollees.
9.653. HMO provision of limited subnetworks to select enrollees.
9.654. HMO external quality assurance assessment.
Authority The provisions of this Subchapter G issued under the HMO Act (40 P. S. § § 1551—1568), unless otherwise noted.
Source The provisions of this Subchapter G adopted June 8, 2001, effective June 9, 2001, 31 Pa.B. 3043, unless otherwise noted.
GENERALLY
§ 9.621. Applicability.
(a) This subchapter applies to corporations that propose to undertake to establish, maintain and operate an HMO within this Commonwealth, with the exception of an HMO exempted under sections 16 and 17(b) of the HMO Act (40 P. S. § § 1566 and 1567(b)).
(b) This subchapter is intended to ensure that HMOs certified by the Commonwealth offer increased competition and consumer choices that serve to advance quality assurance, cost effectiveness and access to health care services.
§ 9.622. Prohibition against uncertified HMOs.
(a) A corporation may not, within this Commonwealth, solicit enrollment of members, enroll members or deliver prepaid basic health services, by or through an HMO, unless it has received a certificate of authority from the Secretary and Commissioner to operate and maintain the HMO.
(b) A foreign HMO may not, within this Commonwealth, solicit enrollment of members, enroll members or deliver prepaid basic health care services unless it has received a certificate of authority from the Secretary and the Commissioner to operate and maintain an HMO.
§ 9.623. Preapplication development activities.
The Department will, upon request, provide technical advice and assistance to persons proposing to develop an HMO, including review of health care services provider contracts to be used to establish and maintain an acceptable health care services provider network. A network is required for issuance of a certificate of authority.
APPLICATION FOR CERTIFICATE OF AUTHORITY
§ 9.631. Content of an application for an HMO certificate of authority.
An application for a certificate of authority under the HMO Act shall include completed application forms as the Secretary and Commissioner may require. An application for a certificate of authority will not be deemed complete unless it includes at least the following information:
(1) Organizational information including a copy of the applicant’s articles of incorporation, bylaws that include a description of the manner by which subscribers will be selected and appointed to the board of directors, an organization chart and clear disclosure of the relationship between the applicant and any affiliated entities owned or controlled by the applicant or which directly or indirectly own or control the applicant.
(2) A list of names, addresses and official positions of the board of directors of the applicant, and of persons who are responsible for the affairs of the applicant, including: president/chief executive officer; medical director; chief financial officer; chief operating officer; directors of quality assurance, UR, provider relations, member services; and the director of the enrollee complaint and grievance process if this responsibility does not fall under one of the previous directorships listed. Resumes shall be included for chairperson of the board and the positions listed in this paragraph.
(3) The address of the registered office, in this Commonwealth, where the HMO can be served with legal process.
(4) A copy of each proposed standard form health care services provider contract and each standard IDS contract including a detailed description of the reimbursement methodologies and types of financial incentives that the HMO proposes to utilize. Reimbursement information submitted to the Department under this paragraph may not be disclosed or produced for inspection or copying to a person other than the Secretary or the Secretary’s representatives, without the consent of the plan which provided the information, unless otherwise ordered by a court.
(5) A copy of the HMO’s proposed contracts with individual enrollees and groups of enrollees describing the health care coverage to be provided to each individual or group.
(6) A description of the proposed plan services area by county, including demographic data of prospective enrollees and location of contracted providers.
(7) A detailed description of the applicant’s proposed enrollee complaint and grievance systems.
(8) A detailed description of the applicant’s proposed system for ongoing quality assurance consistent with the requirements of § 9.674 (relating to quality assurance standards).
(9) A detailed description of the applicant’s proposed UR system consistent with the requirements of § § 9.751—9.753 (relating to UR system description; UR system standards; and time frames for UR).
(10) A copy of the applicant’s proposed confidentiality policy.
(11) A detailed description of the applicant’s proposed provider credentialing system, and standards for ongoing recredentialing activities incorporating quality assurance, UR and enrollee satisfaction measures.
(12) A description of the applicant’s capacity to collect and analyze necessary data related to utilization of health care services and to provide the Department with the periodic reports specified in § 9.604 (relating to plan reporting requirements), including a description of the system whereby the records pertaining to the operations of the applicant, including membership and utilization data, are identifiable and distinct from other activities the entity undertakes.
(13) If the applicant intends to delegate any UR functions to a subcontractor, evidence of the subcontractor’s certification as a CRE under Subchapter K (relating to CREs) if the certification is required.
(14) A detailed description of the applicant’s ability to assure both the availability and accessibility of adequate personnel and facilities to serve enrollees in a manner enhancing access, availability and continuity of covered health care services.
(15) A copy of each contract with an individual or entity for the performance on the HMO’s behalf of necessary HMO functions, including marketing, enrollment and administration, and each contract with an insurance company, hospital plan corporation or professional health services corporation for the provision of insurance or indemnity or reimbursement against the cost of health care services provided by the HMO.
(16) A job description for the medical director.
(17) A procedure for referral of enrollees to nonparticipating providers.
(18) A copy of the HMO’S proposed general subscriber literature including the member handbook.
(19) A copy of the HMO’s most recent financial statement.
(20) Other information the applicant may wish to submit for consideration.
(21) Other information the Department requests as necessary to review the applicant’s application for compliance with the HMO Act, Act 68 and this chapter.
Cross References This section cited in 28 Pa. Code § 9.635 (relating to issuance of a certificate of authority to a foreign HMO).
§ 9.632. HMO certificate of authority review by the Department.
(a) The applicant shall submit a complete application to both the Department and the Insurance Department.
(b) Upon receipt of a complete application for a certificate of authority the Department will publish notification of receipt in the Pennsylvania Bulletin. The Department will accept public comments, suggestions or objections to the application for 30 days after publication. The Department may hold a public meeting concerning the application, with appropriate notification to the applicant, and notice to the public through publication of notice in the Pennsylvania Bulletin.
(c) Within 45 days of receipt of the application, the Department will notify the applicant of any additional information required to complete the application, and of any part of the application which must be corrected by the applicant to demonstrate compliance with the HMO Act or this chapter. A copy of requests for information sent to the applicant will be sent to the Commissioner.
(d) The Department will review the completed application for compliance with the HMO Act and this chapter. The application will not be considered complete until the required information is provided to the Department in writing, including evidence of a contracted and credentialed provider network of sufficient capacity to serve the proposed number of enrollees.
(e) The Department will visit and inspect the site or proposed site of the applicant’s facilities or facilities of the applicant’s contractors and its provider network, to ascertain its capability to comply with the HMO Act, Act 68 and this chapter.
(f) The Department will complete its review within 90 days of submission of the completed application.
(g) Within 90 days of receipt of a completed application for a certificate of authority, the Secretary and Commissioner will jointly take action as set forth in paragraph (1) or (2). A disapproval of an application may be appealed in accordance with 2 Pa.C.S. (relating to administrative law and procedure).
(1) Approve the application and issue a certificate of authority.
(2) Disapprove the application and specify in writing the reasons for the disapproval.
Cross References This section cited in 28 Pa. Code § 9.635 (relating to issuance of a certificate of authority to a foreign HMO).
§ 9.633. Location of HMO activities, staff and materials.
To demonstrate its ability to assure both availability and accessibility of adequate personnel and facilities to effectively provide or arrange for the provision of basic health services in a manner enhancing access, availability and continuity of care, the HMO shall meet the following minimum standards:
(1) The HMO shall make available for review at a location within this Commonwealth, by the Department or an agent of the Department, the books and records of the corporation and the essential documents as the Department may require, including signed provider contracts, credentialing files, complaint and grievance files, committee meeting (quality assurance and credentialing) minutes and hearing transcriptions. Documents need not be permanently maintained in this Commonwealth but shall be made available within this Commonwealth within 30 days, unless the Department determines for matters of patient safety the documents must be provided within 2-business days.
(2) The HMO shall identify a physician to serve as its medical director who is licensed in this Commonwealth and qualified to perform the duties of a medical director. The medical director shall be responsible for the following:
(i) Oversight of the UR and quality assurance activities regarding coverage and services provided to enrollees.
(ii) General coordination of the medical care of the HMO.
(iii) Appropriate professional staffing of the HMO’s medical management operations.
(iv) Designing protocols for quality assurance.
(v) Implementation of quality assurance programs and continuing education requirments.
(3) The HMO’s quality assurance/improvement committee shall include at least one health care provider licensed in this Commonwealth.
§ 9.634. Delegation of HMO operations.
(a) An HMO may contract with an individual, partnership, association, corporation or organization for the performance of HMO operations. A contract for delegation of HMO operations shall be filed with the Commissioner under section 1558(b) of the HMO Act and may not in any way diminish the authority or responsibility of the board of directors of the HMO, or the ability of the Department to monitor quality of care and require prompt corrective action of the HMO when necessary.
(b) An HMO shall delegate medical management authority in accordance with § 9.675 (relating to the delegation of medical management).
§ 9.635. Issuance of a certificate of authority to a foreign HMO.
(a) A foreign HMO may be authorized by issuance of a certificate of authority to operate or to do business in this Commonwealth if the Department is satisfied that it is fully and legally organized and approved and regulated under the laws of its state and that it complies with the requirements for HMOs organized within and certified by the Commonwealth. A foreign HMO shall submit a letter to the Department and a copy of its approved application for licensure or certification on file with its state of domicile.
(b) A foreign HMO shall submit a completed Commonwealth application for a certificate of authority in accordance with § § 9.631 and 9.632 (relating to content of an application for an HMO certificate of authority; and HMO certificate of authority review by the Department) and the following:
(1) In lieu of the Commonwealth application, a foreign HMO may submit to the Department and the Insurance Department a copy of the application submitted and approved for certificate of authority or licensure in another state with cross references to requirements contained in the Commonwealth’s application.
(2) The foreign HMO shall provide, along with the out-of-State application, documentation of any change or modification occurring since that certificate of authority or license was approved.
(3) The foreign HMO shall otherwise affirm that the information submitted to the Department remains current and accurate at the time of submission.
(c) The Department may waive or modify its requirements under the HMO Act, this subchapter and Subchapters F and J (relating to general; and health care provider contracts) insofar as they apply to HMOs, following a written request from the foreign HMO for the modification or waiver and upon determination by the Department that the requirements are not appropriate to the particular foreign HMO, and that the waiver or modification will be consistent with the purposes of the HMO Act, and that it would not result in unfair discrimination in favor of the HMO of another state.
(d) Foreign HMOs are required to comply on the same basis as Commonwealth certified HMOs with all ongoing reporting and operational requirements, including external quality assurance assessments.
(e) If the Department and the Insurance Department arrive at reciprocal licensing agreements with other states, the requirements of this subchapter may be waived or modified.
(f) Upon receipt of a complete application for a certificate of authority the Department will publish notification of receipt in the Pennsylvania Bulletin. The Department will accept public comments, suggestions or objections to the application for 30 days after publication. The Department may hold a public meeting concerning the application, with appropriate notification to the applicant, and notice to the public through publication of notice in the Pennsylvania Bulletin.
OPERATIONAL STANDARDS
§ 9.651. HMO provision and coverage of basic health services to enrollees.
(a) An HMO shall maintain an adequate network of health care providers through which it provides coverage for basic health services to enrollees as medically necessary and appropriate without unreasonable limitations as to frequency and cost.
(b) An HMO may exclude coverage for services, except to the extent that a service is required to be covered by State or Federal law.
(c) An HMO shall provide or arrange for the provision of and cover the following basic health services as the HMO determines to be medically necessary and appropriate according to its definition of medical necessity:
(1) Emergency services on a 24-hour-per-day, 7-day-per-week basis. The plan may not require an enrollee, or a participating health care provider advising the enrollee regarding the existence of an emergency, to utilize a participating health care provider for emergency services, including ambulance services. See § 9.672 (relating to emergency services).
(2) Outpatient services.
(3) Inpatient services for general acute care hospitalization for a minimum of 90 days per contract or calendar year.
(4) Preventive services.
(d) An HMO shall provide other benefits as may be mandated by State and Federal law.
Cross References This section cited in 28 Pa. Code § 9.602 (relating to definitions).
§ 9.652. HMO provision of other than basic health services to enrollees.
An HMO may provide coverage for other than basic health services including dental services, vision care services, prescription drug services, durable medical equipment or other health care services, provided:
(1) The HMO establishes, maintains and operates a network of participating health care providers sufficient to provide reasonable access to and availability of the contracted nonbasic health services to enrollees in accordance with § 9.679 (relating to access requirements in service areas).
(2) The health care provider contracts it uses to contract with participating providers meet the requirements of § 9.722 (relating to plan and health care provider contracts).
(3) The provision of those health services is subject to the same complaint and grievance procedures applicable to the provision of basic health services.
§ 9.653. HMO provision of limited subnetworks to select enrollees.
(a) An HMO that wants to offer benefit plans based on limited subnetworks, that is, networks which include only selected participating health care providers, shall request approval from the Department to do so.
(b) The Department will approve a request to offer limited subnetworks if the proposal meets the following requirements:
(1) There is adequate disclosure to potential enrollees and any current enrollees who would be affected by a change to a limited subnetwork benefit package of the economic penalties that apply when enrollees do not obtain health care services through the limited subnetwork. Disclosure of the limitations in the number of the HMO’s participating providers must be consistent with the act and the requirements of 31 Pa. Code § 154.16 (relating to disclosure of information).
(2) If a covered service is not available within the limited subnetwork, the HMO shall provide or arrange for the provision of the service at no additional out-of-pocket cost to the enrollee, other than the routine copayments which would have been applicable if the service had been provided within the limited subnetwork.
(3) The limited subnetwork meets the minimum healthcare provider standards in § 9.679 (relating to access requirements in service areas) and has an adequate number and distribution of network providers to provide care which is available and accessible to enrollees within a defined area.
(4) Enrollment is limited to enrollees within a reasonable traveling distance to the limited participating subnetwork providers.
(5) The limited subnetwork meets the standards for adequate networks and accessibility in § 9.679.
§ 9.654. HMO external quality assurance assessment.
(a) Within 18 months after enrollment of the first enrollee, and every 3 years thereafter unless otherwise required by the Department, an HMO shall have an external quality assurance assessment conducted using an EQRO acceptable to the Department. Department personnel may participate in the external quality assurance assessment. The following also apply to external quality assurance assessments:
(1) The Department will perform a site visit of the HMO 12 months after the issuance of a certificate of authority whether or not the HMO has enrollees, to ensure that the HMO is complying with the requirements of the HMO Act, Act 68 and this chapter.
(2) If the HMO has no enrollees more than 18 months from the issuance of a certificate of authority the Department will peform a site visit to ensure that the HMO is in compliance with the HMO Act, Act 68 and this chapter.
(3) If, following the site visit in paragraph (2), the HMO has no enrollees for the next 6 months, the HMO may not begin to enroll members until the Department performs an additional site visit.
(b) Costs for the required external quality assurance assessment shall be paid by the HMO.
(c) An HMO may combine the external quality assurance assessment with an accreditation review offered by an EQRO acceptable to the Department, if the review adequately incorporates information required by the Department to determine the HMO’s compliance with Act 68, the HMO Act and this chapter, and allows for Department staff to actively participate in the external quality assurance assessment.
(d) The external quality assurance assessment shall study the quality of care being provided to enrollees and the effectiveness of the quality assurance program established by the HMO under § 9.674 (relating to quality assurance standards) and shall assess the HMO’s compliance with the HMO Act, Act 68 and this chapter.
(e) The EQRO shall issue a copy of its findings to the HMO’s senior management, which shall provide a copy to the board of directors. It is the responsibility of the HMO to ensure that a copy of all interim and final reports regarding the external quality assurance assessment are filed within 15 days with the Department, either directly by the HMO, or by the EQRO.
(f) The Department’s requests for corrective action plans resulting from the external quality assurance assessment concerning deficiencies found requiring an HMO response, and the HMO’s ensuing responses, including correspondence between the plan and the Department, plans of correction and follow-up documentation, will be made available to the public upon request as required under the Right to Know Law (65 P. S. § § 66.1—66.4). The remainder of the assessment containing proprietary information may not be disclosed or produced for inspection or copying to a person other than the Secretary or the Secretary’s representatives, without the consent of the plan which provided the information, unless otherwise ordered by a court.
(g) The Department will publish annually in the Pennsylvania Bulletin a list of EQROS acceptable to it for the purpose of performing external quality assurance assessments.
Cross References This section cited in 28 Pa. Code § 9.675 (relating to delegation of medical management).
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