TITLE 27
Insurance

CHAPTER 27-41
Health Maintenance Organizations

SECTION 27-41-17


§ 27-41-17 Suspension or revocation of license.

(a) The director may suspend or revoke any license issued to a health maintenance organization under this chapter if the director finds that any of the following conditions exist:

(1) The health maintenance organization is operating significantly in contravention of its basic organizational document, or in a manner contrary to that described in and reasonably inferred from any other information submitted under § 27-41-3, unless amendments to those submissions have been filed with and approved by the director;

(2) The health maintenance organization issues evidence of coverage or uses a schedule of charges for health care services that do not comply with the requirements of § 27-41-8;

(3) The health maintenance organization does not provide or arrange for basic health care services;

(4) The health maintenance organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees;

(5) The health maintenance organization has failed to implement a mechanism affording the enrollees an opportunity to participate in matters of policy and operation under § 27-41-6;

(6) The health maintenance organization has failed to implement the complaint system required by § 27-41-11 in a manner to reasonably resolve valid complaints;

(7) The health maintenance organization, or any person on its behalf, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive, or unfair manner;

(8) The continued operation of the health maintenance organization would be hazardous to its enrollees; or

(9) The health maintenance organization has failed to substantially comply with this chapter.

(b) The director of business regulation shall suspend or revoke any license issued to a health maintenance organization upon certification by the director of health to the director of business regulation that:

(1) The health maintenance organization does not meet the requirements of § 27-41-4(a)(2); or

(2) The health maintenance organization is unable to fulfill its obligations to furnish health care services.

(c) A license shall be suspended or revoked only after compliance with the requirements of § 27-41-20.

(d) When the license of a health maintenance organization is suspended, the health maintenance organization shall not, during the period of that suspension, enroll any additional enrollees except newborn children or other newly acquired dependents of existing enrollees, and shall not engage in any advertising or solicitation.

(e) When the license of a health maintenance organization is revoked, the organization shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs, and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of the organization. It shall engage in no further advertising or solicitation. The director of business regulation may, by written order, permit any further operation of the organization that the director may find to be in the best interest of enrollees, to the end that enrollees will be afforded the greatest practical opportunity to obtain continuing health care coverage.

History of Section.
(P.L. 1983, ch. 225, § 2; P.L. 1989, ch. 542, § 85.)