(a)  Any director, officer, or employee of a health maintenance organization who receives, collects, disburses, or invests funds in connection with the activities of the organization shall be responsible for those funds in a fiduciary relationship to the enrollees.

Terms Used In Rhode Island General Laws 27-41-7

  • 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
  • Discovery: Lawyers' examination, before trial, of facts and documents in possession of the opponents to help the lawyers prepare for trial.
  • Employee: means any person who has entered into the employment of or works under a contract of service or apprenticeship with any employer. See Rhode Island General Laws 27-41-2
  • Fiduciary: A trustee, executor, or administrator.
  • 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)  A health maintenance organization shall maintain in force a fidelity bond on employees or officers in an amount not less than one hundred thousand dollars ($100,000) or any greater sum that may be prescribed by the director. All fidelity bonds shall be written with at least a one year discovery period and if written with less than a three (3) year discovery period shall contain a provision that no cancellation or termination of the bond, whether by or at the request of the insured or by the underwriter, shall take effect prior to the expiration of ninety (90) days after written notice of cancellation or termination has been filed with the director unless an earlier date of cancellation or termination is approved by the director.

History of Section.
P.L. 1983, ch. 225, § 2.