(a)  Whenever the director determines that the financial condition of a health maintenance organization is such that its continued operation must be hazardous to its enrollees, creditors, or the general public, or that it has violated any provision of this act, the director may, after notice and hearing, order the health maintenance organization to take action reasonably necessary to rectify the condition or violation, including, but not limited to, one or more of the following:

(1)  Reduce the total amount of present and potential liability for benefits by reinsurance or other method acceptable to the director;

(2)  Reduce the volume of new business being accepted;

(3)  Reduce expenses by specified methods;

(4)  Suspend or limit the writing of new business for a period of time;

(5)  Increase the health maintenance organization’s capital and surplus by contribution;

(6)  Initiate administrative supervision proceedings against the health maintenance organization in accordance with chapter 14.1 of this title; or

(7)  Take other steps the director may deem appropriate under the circumstances.

Terms Used In Rhode Island General Laws 27-41-18.1

  • Director: means the director of the department of business regulation or his or her duly appointed agents. See Rhode Island General Laws 27-41-2
  • Health maintenance organization: means a single public or private organization which:

    (1)  Provides or makes available to enrolled participants healthcare services, including at least the following basic healthcare services: usual physician services, hospitalization, laboratory, x-ray, emergency, and preventive services, and out of area coverage, and the services of licensed midwives;

    (2)  Is compensated, except for copayments, for the provision of the basic healthcare services listed in subdivision (1) of this subsection to enrolled participants on a predetermined periodic rate basis; and

    (3)(i)  Provides physicians' services primarily:

    (A)  Directly through physicians who are either employees or partners of the organization; or

    (B)  Through arrangements with individual physicians or one or more groups of physicians organized on a group practice or individual practice basis;

    (ii)  "Health maintenance organization" does not include prepaid plans offered by entities regulated under chapter 1, 2, 19, or 20 of this title that do not meet the criteria above and do not purport to be health maintenance organizations;

    (4)  Provides the services of licensed midwives primarily:

    (i)  Directly through licensed midwives who are either employees or partners of the organization; or

    (ii)  Through arrangements with individual licensed midwives or one or more groups of licensed midwives organized on a group practice or individual practice basis. See Rhode Island General Laws 27-41-2

(b)  For purposes of this section, the violation by a health maintenance organization of any law of this state to which the health maintenance organization is subject shall be deemed a violation of this act.

(c)  The director is authorized to adopt regulations to set uniform standards and criteria for early warning that the continued operation of any health maintenance organization might be hazardous to its enrollees, creditors, or the general public and to set standards for evaluating the financial condition of any health maintenance organization.

(d)  The remedies and measures available to the director under this section shall be in addition to, and not in lieu of, the remedies and measures available to the director under the provisions of chapters 14.1, 14.2 and 14.3 of this title.

History of Section.
P.L. 2005, ch. 176, § 2.