Title: Section 98-1.6 - Issuance of a certificate of authority

98-1.6 Issuance of the certificate of authority. Prior to issuance of a certificate of authority to an MCO, the commissioner, and, in the case of an HMO or MLTCP, the superintendent where applicable, must be satisfied that the following conditions have been met:

(a) The applicant has demonstrated its capability to organize, market, manage, promote and operate the proposed MCO in order to provide comprehensive health services to a proposed enrolled population that is identified in the application, the manner in which the applicant will comply with the requirements of subdivision (g) of section 98-1.11 of this subpart, that the governing authority shall assemble to conduct the business of the MCO at least four times annually, once in each quarter, and that the governing authority shall for each such assembly provide prior notice to and shall include in each such assembly each enrollee or consumer representative and/or enrollee advisory council member elected or appointed to represent the MCO’s enrollees.

(b) Except for PCPCPs, the applicant has demonstrated, to the satisfaction of the commissioner and, except for entities certified pursuant to sections 4403-a and 4403-c of the Public Health Law, the superintendent, that it is capable of assuming full financial risk for covered services. The applicant may make risk sharing arrangements for the provision of comprehensive health services to the population to be enrolled within the area to be served by the plan as prescribed by regulations and guidelines of the commissioner. When such an arrangement includes risk sharing as defined in this Subpart, such an arrangement shall be approved by the superintendent pursuant to the requirements of 11 NYCRR Part 101 (Regulation 164), where applicable, or the commissioner pursuant to regulations and guidelines. In making a determination of financial soundness, the commissioner and the superintendent shall consider financial information, contracts and agreements required as part of the application for a certificate of authority, and any other materials that the commissioner or the superintendent shall deem necessary to make that determination.

(c) The applicant has demonstrated, to the satisfaction of the commissioner, that it will retain full responsibility for the operation of the MCO and the protection of its enrollees in compliance with article 44 of the Public Health Law and this Subpart, including protection for enrollees from billing by providers for services covered under the enrollee contract during the operation of the MCO or in the event of insolvency.

(d) Except for PCPCPs, the applicant has demonstrated, to the satisfaction of the commissioner, that the medical director and the members of the board and officers, controlling persons of a corporation or holding company or the owners, or all the partners of a partnership, or the members and managers of a limited liability company are of such character, experience, competence and standing in the community as to give reasonable assurance of their ability to conduct the affairs of the proposed MCO in the best interest of the MCO and in the public interest, and to provide proper care for the enrollees. In the case of an applicant that is controlled, the commissioner must be satisfied that the holding company has conducted itself in a manner that is consistent with the public interest. In determining the character and competence of applicants and holding companies, the commissioner shall consider criminal convictions, bankruptcy proceedings, and the quality of health-related services provided by any facility or organization owned or operated by the applicant or its holding company or other persons in the holding company system or with which an officer, member of the board, controlling person, member or manager of a limited liability company, owner, partner or medical director has been affiliated. PCPCPs must provide the information prescribed in section 4403-e(2)(b) of the Public Health Law.

(e) Except for PCPCPs, the applicant demonstrates that there are adequate finances and sources of future revenue to properly establish and operate the proposed MCO. In the case of a PCPCP, the applicant demonstrates financial responsibility pursuant to sectin 4403-e(3)(e) of the Public Health Law.

(f) The applicant demonstrates that the arrangements for health care services assure the availability and accessibility of those services to the proposed enrolled population, and are conducive to the appropriate and efficient use of ambulatory care and hospital services, and that utilization review procedures, if applicable, have been developed consistent with article 49 of the Public Health Law and/or, in the case of an entity participating in federally sponsored programs, consistent with federal law and regulation.

(g) The applicant demonstrates that an effective program has been developed to monitor and assess the quality of care provided by the MCO, together with a performance improvement program, approved prior to issuance of its certificate of authority, consistent with section 98-1.12 of this Subpart, pursuant to which, actual and potential problems will be identified and corrections accomplished promptly. In the case of an entity participating in federally sponsored programs, quality of care monitoring and quality improvement programs shall be consistent with federal law and regulation.

(h) The applicant demonstrates that an acceptable mechanism has been developed, consistent with sections 4403(1)(g) and 4408-a of the Public Health Law and/or, in the case of an entity participating in federally sponsored programs, consistent with federal law and regulation, to receive and resolve complaints and grievances initiated by enrollees of the MCO.

(i) The applicant demonstrates that acceptable contracts between the potential enrollee or anyone on behalf of the enrollee and the MCO have been developed. Such contracts shall be approved by the superintendent pursuant to section 4406 of the Public Health Law. In the case of contracts for services provided pursuant to title XIX, such contracts shall require prior approval by the commissioner and, as required by federal law or regulation, the federal agency with oversight responsibility for programs authorized by such title.

(j) The applicant demonstrates that the propsoed premium rates have been submitted to and approved by the superintendent or, in the case of services provided pursuant to title XIX, the commissioner.

(k) Except for PCPCPs, the applicant demonstrates that it has established a system which appropriately accounts for costs and a uniform system of reports and audits meeting the requirements of the commissioner and/or the superintendent, as appropriate.

(l) Demonstration by the HMO applicant of a willingness to provide community services that include at least the following: a willingness to enter into a contract with the local social services district to enroll individuals eligible for benefits under title XIX, including the steps and a time frame for entering into such contract; a willingness to provide coverage to Medicare beneficiaries; and demonstration that the HMO offers open enrollment pursuant to Articles 32 and 43 of the Insurance Law, including steps and a time frame for offering such coverage. For the purpose of this section, open enrollment shall mean offering enrollment throughout the year to individuals and groups consisting of two or more eligible members who elect to enroll, subject to such reasonable limitations as an affiliation or waiting period not to exceed two months from the date of the enrollee's application until the commencement of coverage, provided that coverage may not be excluded based upon a preexisting condition for groups of more than fifty. (m) Requirements and conditions for issuance of a certificate of authority for an MLTCP shall be as set forth in section 4403-f of the Public Health Law and subdivisions (a) through (k) of this section.