§ 56-32-101. Short Title
This chapter shall be known and may be cited as the “Health Maintenance Organization Act of 1986.”
§ 56-32-102. Chapter Definitions
As used in this chapter, unless the context otherwise requires: For the purposes of regulating an HMO that participates in the TennCare program under Title XIX of the Social Security Act (42 U.S.C. § 1396 et seq.), or any successor to the TennCare program, “affiliate” means any entity that exercises control over or is controlled […]
§ 56-32-103. Certificate of Authority — Applications — Applicants — Exemptions — Excess or Aggregate Insurance
Notwithstanding any law of this state to the contrary, any person may apply to the commissioner for and obtain a certificate of authority to establish and operate an HMO in compliance with this chapter. No person shall establish or operate an HMO in this state without obtaining a certificate of authority under this chapter. A […]
§ 56-32-104. Issuance of Certificate of Authority
Issuance of a certificate of authority shall be granted upon payment of the application fee prescribed in § 56-32-119, if the commissioner is satisfied that the following conditions are met: Persons responsible for the conduct of the affairs of the applicant are competent, trustworthy and possess good reputations; The HMO will effectively provide or arrange […]
§ 56-32-105. Powers — Limitations — Hold Harmless Clause
The powers of an HMO include, but are not limited to, the following: The purchase, lease, construction, renovation, operation or maintenance of hospitals or medical facilities, or both, and their ancillary equipment, and property reasonably required for its principal office or for purposes necessary in the transaction of the business of the organization; The making […]
§ 56-32-106. Fiduciaries — Bonds
Any director, officer, employee or partner of an HMO who receives, collects, disburses or invests funds in connection with the activities of the organization shall be responsible for the funds in a fiduciary relationship to the organization. An HMO shall maintain in force a fidelity bond on employees and officers in an amount not less […]
§ 56-32-107. Evidence of Coverage
Every enrollee residing in this state is entitled to evidence of coverage. No evidence of coverage, or amendment to the evidence of coverage, shall be issued or delivered to any person in this state until a copy of the form of the evidence of coverage, or amendment to the evidence of coverage, has been filed […]
§ 56-32-108. Reports
Every HMO shall annually, on or before March 1, file with the commissioner a report on the blank prescribed by the National Association of Insurance Commissioners for HMOs. The commissioner may require additional reports deemed reasonably necessary and appropriate to enable the commissioner to carry out the commissioner’s duties under this chapter.
§ 56-32-109. Notice of Change in Operation
Every HMO shall provide promptly to its enrollees notice of any material change in the operation of the organization that will affect them directly.
§ 56-32-111. Investments
With the exception of investments made in accordance with § 56-32-105, the funds of an HMO shall be invested only in securities or other investments permitted by the laws of this state for the investment of assets constituting the legal reserves of life insurance companies or other securities or investments that the commissioner permits.
§ 56-32-112. Capital Requirements — Required Deposits
To ensure the public’s interest in the delivery of health care services by fiscally sound HMOs, each HMO must provide the commissioner evidence of compliance with the following minimum net worth requirements: Before issuing any certificate of authority, the commissioner shall require that the HMO have an initial net worth of one million five hundred […]
§ 56-32-113. Prohibited Practices
No HMO or representative of the HMO may cause or knowingly permit the use of advertising that is untrue or misleading, solicitation that is untrue or misleading, or any form of evidence of coverage that is deceptive. For the purpose of this chapter: A statement or item of information shall be deemed to be untrue […]
§ 56-32-114. Licensing of Agents
The commissioner may, after notice and hearing, promulgate reasonable rules and regulations necessary to provide for the licensing of agents. “Agent” means a person who is appointed or employed by an HMO and who engages in solicitation or membership in the organization. “Agent” does not include a person enrolling members on behalf of an employer, […]
§ 56-32-115. Regulation by Commissioner — Examination of Books and Records
The commissioner of commerce and insurance, in cooperation with the commissioner of health, shall coordinate the regulation of any HMO holding a certificate of authority to ensure the financial viability of the HMO and that the HMO is currently providing and shall in the future provide health care services efficiently, effectively and economically. The commissioner […]
§ 56-32-116. Revocation or Suspension of Certificates
The commissioner may suspend or revoke any certificate of authority issued to an HMO under this chapter if the commissioner finds that any of the following conditions exist: The HMO is operating significantly in contravention of its basic organizational document or in a manner contrary to that described in any other information submitted under § […]
§ 56-32-117. Rehabilitation, Liquidation, Conservation or Supervision of Hmos
Any rehabilitation, liquidation, conservation or supervision of an HMO shall be deemed to be the rehabilitation, liquidation, conservation or supervision of an insurance company and shall be conducted under the supervision of the commissioner pursuant to chapter 9 of this title. The commissioner may apply for an order directing the commissioner to rehabilitate, liquidate, conserve […]
§ 56-32-118. Rules and Regulations — Notice of Hearing for Denial, Revocation or Suspension of Certificates — Administrative Procedure
The commissioner of commerce and insurance and the commissioner of health may, after notice and hearing, promulgate reasonable rules and regulations, as are necessary or proper to carry out this chapter. When the commissioner has cause to believe that grounds for the denial of an application for a certificate of authority exist, or that grounds […]
§ 56-32-119. Fees
Every HMO subject to this chapter shall pay to the commissioner the following fees for: Filing an application for certificate of authority, one thousand three hundred dollars ($1,300); Filing an amendment to the organization documents that require approval, sixty dollars ($60.00); Filing each annual report, one hundred ninety-five dollars ($195); and Renewal of the certificate […]
§ 56-32-120. Administrative Penalty — Cease and Desist Orders — Injunctions
The commissioner may, in lieu of suspension or revocation of a certificate of authority under § 56-32-118, levy an administrative penalty in an amount not less than one thousand dollars ($1,000) nor more than ten thousand dollars ($10,000), if reasonable notice in writing is given of the intent to levy the penalty and the HMO […]
§ 56-32-121. Applicability of Other Laws — Construction
Except as otherwise provided in this chapter, the insurance laws and the hospital or medical service corporation laws are not applicable to any HMO granted a certificate of authority under this chapter. This subsection (a) does not apply to an insurer or hospital or medical service corporation licensed and regulated pursuant to the insurance law […]