2001-S 557
Enacted 07/13/2001


Introduced By:  Senator Montablano

Date Introduced:  February 14, 2001

It is enacted by the General Assembly as follows:

SECTION 1. Section 27-41-5 of the General Laws in Chapter 27-41 entitled "Health Maintenance Organizations" is hereby amended to read as follows:

27-41-5. Powers of health maintenance organizations. -- (a) The powers of a health maintenance organization include, but are not limited to, the following:

(1) The purchase, lease, construction, renovation, operation, or maintenance of hospitals, medical facilities, or both, and their ancillary equipment, and such property as may reasonably be required for its principal office or for such other purposes as may be necessary in the transaction of the business of the health maintenance organization as defined in section 27-41-2(h);

(2) The making of loans to a medical group under contract with it in furtherance of its program or the making of loans to a corporation or corporations under its control for the purpose of acquiring or constructing medical facilities and hospitals or in furtherance of a program providing health care services to enrollees;

(3) The furnishing of health care services through providers which are under contract with or employed by the health maintenance organization;

(4) The contracting with any person for the performance on its behalf of certain functions such as marketing, enrollment, and administration;

(5) The contracting with an insurance company or a hospital or medical service corporation licensed in this state for the provision of insurance, indemnity, or reimbursement against the cost of health care services provided by the health maintenance organization;

(6) The offering, in addition to basic health care services, of:

(i) Additional health care services;

(ii) Indemnity benefits covering out of area or emergency services; and

(iii) Indemnity benefits, in addition to those relating to out of area and emergency services, provided through insurance companies or hospital or medical service corporations.

(b) A health maintenance organization shall file notice, with adequate supporting information, with the director of business regulation prior to the exercise of any power granted in subsection (a)(1), (a)(2), or (a)(4). The director of business regulation shall disapprove any exercise of power only if in the director's opinion it would substantially and adversely affect the financial soundness of the health maintenance organization and endanger its ability to meet is obligations. The director of business regulation shall approve or disapprove any exercise of power within a reasonable time, subject to certification of approval from the director of health and to the requirements of chapter 15 of title 23, the Health Care Certificate of Need Act of Rhode Island.

(c) Investment in real estate may be made only for the purposes set forth in subsection (a)(1), except that the health maintenance organization shall not be required to comply fully with the uses described in subsection (a)(1) until December 31 of the year following the year of purchase. Upon submission to the director of evidence demonstrating that the health maintenance organization is making satisfactory progress toward compliance with this subsection, the director may grant an extension of no more than one year beyond the time otherwise provided.

(d) The director of business regulation may promulgate rules and regulations exempting from the filing requirement of subsection (b) those activities having a de minimis effect.

SECTION 2. This act shall take effect upon passage.

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