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Title: Section 98-1.9 - Acquisition or retention of control of HMO's

Effective Date


98-1.9 Acquisition or retention of control of MCOs.

(a) No person shall acquire control of any New York State-certified MCO, whether by purchase of its securities or otherwise, unless it receives the commissioner's prior approval, which shall not be issued until the commissioner has consulted with the superintendent, as appropriate.

(b) The commissioner may disapprove such acquisition if he or she determines, upon notice and an opportunity to be heard, that such disapproval is reasonably necessary to protect the interests of the people of this State. The following factors shall be considered in making such determination:

(1) the financial condition of the acquiring person and the MCO;

(2) the character, competence and standing in the community of the acquiring person and, if the acquiring person is a holding company, the performance of the holding company, its owners, directors, members and managers of a limited liability company and any health care facilities operated by that holding company or its controlled persons; and

(3) the continuing assurance that the MCO's operations will be in compliance with article 44 of the Public Health Law and this Subpart.

(c) The commissioner may require the submission of such information as he or she deems necessary to make the determination required in subdivisions (a) and (b) of this section and may require, as a condition of approval of such acquisition or retention of control, that all or any portion of such information be disclosed to the MCO enrollees.

(d) The commissioner may determine, upon notice and opportunity to be heard, that a person exercises, directly or indirectly, either alone or pursuant to an agreement with one or more other persons, such a controlling influence over the management or policies of a licensed MCO as to make it necessary or appropriate, in the public interest or for the protection of the MCO's enrollees, that the person be deemed to control the MCO. In the event of such a determination, control shall not be exercised pending issuance of an approval pursuant to the provisions of this section.

(e) The commissioner may determine, upon the filing of a request for a ruling, that any person does not or will not, upon the taking of some proposed action, control another person. Such determination shall be made within 30 days, or such further period as the commissioner may prescribe. The filing of the request in good faith by any person shall relieve the requesting person from any obligation or liability imposed by this section, with respect to the subject of the request, until the commissioner has acted upon the request. The commissioner may prospectively revoke or modify his or her determination, after notice and opportunity to be heard, whenever in his or her judgment revocation or modification is consistent with article 44 of the Public Health Law and this Subpart. When the commissioner finds that control would exist upon implementation of the proposal, or does exist, or upon the revocation of an earlier determination that no control was present, no such control shall be exercised, or existing control shall be relinquished or modified as directed by the commissioner pending issuance of approval pursuant to the provisions of this section.


VOLUME A-2 (Title 10)