(a) 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 foreigncorporation may qualify under this chapter, subject to its registration to do business in this state as a foreign corporation.
Terms Used In Tennessee Code 56-32-103
Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Attorney: means the person designated and authorized by subscribers as the attorney-in-fact having authority to obligate them on reciprocal insurance contracts. See Tennessee Code 56-16-102
basic health care services: includes , but is not limited to, services made necessary as the result of Title XIX federal programs or waivers for which TennCare is primarily responsible for implementation or enforcement. See Tennessee Code 56-32-102
Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
Contract: A legal written agreement that becomes binding when signed.
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
Foreign: when used without limitation, includes all companies formed by authority of any other state or government. See Tennessee Code 56-1-102
Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
person: includes an individual, insurer, company, association, organization, Lloyds, society, reciprocal insurer or interinsurance exchange, partnership, syndicate, business trust, corporation, agent, general agent, broker, solicitor, service representative, adjuster, and every legal entity. See Tennessee Code 56-32-102
Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
Representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
Subscription: includes a mark, the name being written near the mark and witnessed. See Tennessee Code 1-3-105
working capital: means current assets, including admitted stocks and admitted bonds, minus current liabilities. See Tennessee Code 56-32-112
(b) Each application for a certificate of authority shall be verified by an officer or authorized representative of the applicant, shall be in a form prescribed by the commissioner, and shall set forth or be accompanied by the following:
(1) A copy of the organizational documents of the applicant, such as the articles of incorporation, articles of association, partnership agreement, trust agreement or other applicable documents, and all amendments to those documents;(2) A copy of the bylaws, rules and regulations, or similar document, if any, regulating the conduct of the internal affairs of the applicant;(3) A list of the names, addresses and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee or other governing board or committee, the principal officers in the case of a corporation, and the partners or members in the case of a partnership or association;(4) A copy of any contract made or to be made between any providers or persons listed in subdivision (b)(3) and the applicant;(5) A copy of the form of evidence of coverage to be issued to the enrollees;(6) A copy of the form or group contract, if any, that is to be issued to employers, unions, trustees or other organizations;(7) Financial statements showing the applicant’s assets, liabilities, and sources of financial support using the official blank form for HMOs prescribed by the National Association of Insurance Commissioners;(8) A description of the proposed method of marketing, a financial plan that includes a projection of operating results anticipated until the organization has had net income for at least two (2) years, and a statement as to the sources of working capital as well as any other sources of funding;(9) A power of attorney duly executed by the applicant, if not domiciled in this state, appointing the commissioner and the commissioner’s successors in office, and duly appointed deputies, as the true and lawful attorney of the applicant in and for this state upon whom all lawful process in any legal action or proceeding involving the HMO on a cause of action arising in this state may be served;(10) A statement reasonably describing the geographic area or areas to be served;(11) A description of the complaint procedure to be utilized pursuant to the Tennessee Health Carrier Grievance and External Review Procedure Act, compiled in chapter 61 of this title; and(12) Other information the commissioner may require to make the determination required in § 56-32-104.(c)(1) An applicant or an HMO holding a certificate of authority granted under this section shall, unless otherwise provided for in this chapter, file a notice describing any material modification of the operation set out in the information required by subsection (b). The notice shall be filed with the commissioner prior to the modification. If the commissioner does not disapprove of the modification within thirty (30) days of filing, the modification shall be deemed approved.(2)(A) Significant expansions of an HMO’s enrollee population shall be considered a material modification under subdivision (c)(1), necessitating the filing of:
(i) Current financial statements showing the HMO’s assets, liabilities, and sources of financial support using the official blank form for HMOs prescribed by the National Association of Insurance Commissioners, as required by subdivision (b)(7);(ii) A description of the proposed plan of marketing, a financial plan that includes a projection of operating results anticipated for the two (2) years following the addition of the new enrollees, and a statement as to the sources of working capital as well as any other sources of funding, all as required by subdivision (b)(8); and(iii) Any other information required to be filed by subsection (b) that, as a result of the expansion of the HMO’s enrollee population, has been materially modified.(B) This information shall be filed with, and reviewed by, the commissioner as delineated in subdivision (c)(1).(C) For purposes of this subsection (c), expansions of an HMO’s enrollee population that do not exceed ten percent (10%) of the HMO’s existing enrollee population in any six-month period shall not be considered a significant expansion of the HMO’s enrollee population.(d) An applicant or an HMO holding a certificate of authority granted under this section shall file all contracts of excess or aggregate insurance with the commissioner. Any agreement between the organization and an insurer shall be subject to the laws of this state regarding excess and aggregate insurance.(e) An applicant must demonstrate to the commissioner of health or the commissioner’s designee proof of capability to provide basic health care services efficiently, effectively and economically. The applicant shall meet the network adequacy requirements established pursuant to § 56-7-2356. The commissioner of health shall report the commissioner’s findings to the commissioner of commerce and insurance, who may then deny the application for a certificate of authority, as provided in §§ 56-32-104 and 56-32-118(b).(f) The commissioner shall issue a temporary certificate of authority to any entity that provides or pays for medical services provided to recipients of medical assistance, as defined by § 71-5-103, in exchange for a premium or subscription charge paid by the medical assistance program pursuant to the Medical Assistance Act, compiled in title 71, chapter 5, part 1, upon submission by the entity of an application for a certificate of authority as provided for in this chapter. The temporary certificate of authority shall not be issued to any entity that provides or pays for medical services on a per capita prepayment basis to any person not receiving medical services through the medical assistance program. The temporary certificate shall be valid for a period not to exceed one (1) year or until a certificate of authority is issued, whichever occurs first. The authority that allows payment under the Medical Assistance Act shall be extended to be concurrent with the temporary certificate of authority or until a new authority of payment is authorized by the medicaid agency.
