§ 5102. Application; certification, filing, and license fees

(a) No person may operate a health maintenance organization without obtaining a certificate of authority from the Commissioner.

(b) Application for a certificate of authority shall be made to the Commissioner and include such information and in such form as the Commissioner prescribes, including the following:

(1) A copy of the basic organizational document, if any, of the applicant 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; a statement as to the character and competence of these persons and such disclosure and conflict of interest statements as required.

(4) A copy of the proposed evidence of coverage to be issued to the members and the proposed premium rates for that coverage.

(5) A copy of the proposed form of the group contract, if any, that is to be issued to employers, unions, associations, trusts, or other organizations.

(6) Financial statements showing the applicant’s assets, liabilities, and sources of financial support. If the applicant’s financial affairs are audited by independent certified public accountants, a copy of the applicant’s most recent regular certified financial statement shall be deemed to satisfy this requirement unless the Commissioner directs that additional or more recent financial information is required.

(7) A description of the proposed method of marketing the plan, a financial plan that includes a three-year projection of the initial operating results anticipated, and a statement as to the sources of working capital as well as any other sources of funding. The Commissioner shall adopt such rules relating to financial reserves of the health maintenance organization as he or she deems necessary. These rules shall require financial reserves to be computed in relation to the health maintenance organization’s financial risks and the impact of those risks on the health maintenance organization’s ability to fulfill its contractual and financial obligations to its members.

(8) [Repealed.]

(9) A statement generally describing the organizational structure of the applicant, its operation, the location of facilities where health care shall be available to members, the types of health care personnel to be used at each location and the approximate number of each personnel type available at each location, the name and location of primary and tertiary care facilities to be used and a projection of utilization for each facility, the method used to monitor the quality of health care services furnished, and the method of resolving grievances initiated by members or providers.

(c) Every health maintenance organization subject to this chapter shall pay to the Commissioner for filing an application for a certificate of authority or amendment to a certificate of authority $200.00, and for filing each annual report $100.00. In addition, each organization shall pay a license fee for the year of registration and a renewal fee for each year thereafter of $300.00.

(d) The Commissioner shall approve or deny such application within 60 days, based on the Commissioner’s determination that the application promotes the general good of the State, and of the reliability and financial condition of the applicant.

(e)(1) Continuance by the Commissioner of a certificate of authority issued under this section shall be contingent upon satisfactory performance by the organization as to the delivery, continuity, accessibility, and quality of the services to which enrolled members are entitled; compliance with the provisions of Vermont law and rules adopted under the law; and the continuing fiscal soundness of the organization.

(2) Each health maintenance organization shall keep current the information required to be disclosed in subsection (b) of this section by reporting all changes or additions in writing to the Commissioner. Changes or additions to the information and documents required by subdivision (b)(1) of this section shall be filed 30 days before the change or addition becomes effective. The Commissioner shall approve such change or addition unless it would interfere with the financial stability of the company, is not in the best interests of members, or the public, or would cause the company to violate any law or rule. If the Commissioner fails to disapprove the change or addition, it shall be deemed approved at the expiration of the 30 days. All other changes or additions shall be filed within 15 days after the end of the month in which each change or addition becomes effective.

(3) On or before April 1 of each year, the health maintenance organization shall file with the Commissioner:

(A) a report on the operations of the quality assurance program and the grievance procedures describing any changes made in the operations of the quality assurance program and the grievance procedures during the preceding calendar year;

(B) the net worth, deposit, and designated reserve calculations made under subsections 5102b(b) and (c) of this title;

(C) a report on the health maintenance organization’s operations in this State in a form prescribed by the Commissioner; and

(D) any other information reasonably required by the Commissioner to evaluate the organization’s satisfactory performance under the certificate of authority.

(4) In addition to the remedies under section 5109 of this title, if, after notice and hearing, the Commissioner finds that the organization is performing unsatisfactorily, is impaired or insolvent, or has not complied with its plan of operation or any provision of Vermont law, the Commissioner may revoke, suspend, or impose conditions on the organization’s certificate of authority.

(f) Upon request by a Program for All-Inclusive Care for the Elderly (PACE) authorized under federal Medicare law, or by a Prepaid Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP) established in accordance with federal Medicare or Medicaid laws and regulations, the Commissioner may approve the exemption of the PACE program, PIHP, or PAHP from the provisions of this chapter and from any other provisions of this title if the Commissioner determines that the purposes of this chapter and the purposes of any other provision of this title will not be materially and adversely affected by the exemption. In approving an exemption, the Commissioner may prescribe such terms and conditions as the Commissioner deems necessary to carry out the purposes of this chapter and this title. (Added 1979, No. 117 (Adj. Sess.); amended 1991, No. 166 (Adj. Sess.), § 14; 1993, No. 30, §§ 3-5, eff. May 21, 1993; 1993, No. 235 (Adj. Sess.), § 10a; 1995, No. 180 (Adj. Sess.), § 5; 2005, No. 88 (Adj. Sess.), § 2, eff. Feb. 15, 2006; 2005, No. 122 (Adj. Sess.), § 7; 2007, No. 178 (Adj. Sess.), § 7; 2015, No. 23, § 85; 2021, No. 105 (Adj. Sess.), § 239, eff. July 1, 2022.)