26:2J-3. Establishment of health maintenance organizations

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 a health maintenance organization in compliance with this act. No person shall establish or operate a health maintenance organization in this State without compliance with regulations to be promulgated by the commissioner, nor sell, offer to sell, or solicit offers to purchase or receive advance or periodic consideration in conjunction with a health maintenance organization without obtaining a certificate of authority under this act. When the establishment or operation of a health maintenance organization involves the construction of a health care facility or any change in or expansion of a health care facility or involves the institution of new health care services as defined in section 7 of the Health Care Facilities Planning Act (P.L.1971, c. 136, C. 26:2H-7), said health maintenance organization shall abide by all provisions of P.L.1971, c. 136. All health care facilities utilized by a health maintenance organization or its agents shall comply with the licensure provisions of section 12 of the Health Care Facilities Planning Act (C. 26:2H-12).

b. Every health maintenance organization as of the effective date of this act shall submit an application for a certificate of authority under subsection c. of this section within 90 days of the effective date of this act. Each such applicant may continue to operate until the commissioner acts upon the application. In the event that an application is denied under section 4, hereof, the applicant shall henceforth be treated as a health maintenance organization whose certificate of authority has been revoked.

c. 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 basic organizational document of the applicant such as the articles of incorporation, articles of association, partnership agreement, trust agreement, or other applicable documents, and all amendments thereto;

(2) a copy of the bylaws, rules and regulations, or similar document 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;

(4) a copy of any contract made or to be made between any providers or persons listed in paragraph (3) of this subsection and the applicant;

(5) a copy of any contract made or to be made with an insurer or a hospital or medical service corporation;

(6) a statement generally describing the health maintenance organization, its facilities, and personnel;

(7) a copy of the form of evidence of coverage to be issued to the enrollees;

(8) a copy of the form of the group contract, if any, which is to be issued to employers, unions, trustees, or other organizations;

(9) recent financial statements showing the applicant's assets, liabilities, and sources of financial support;

(10) a general description of the proposed method of marketing and financing and a statement as to the sources of funding;

(11) a power of attorney duly executed by such applicant, if not domiciled in this State, appointing the commissioner and his successors in office, and duly authorized deputies, as the true and lawful attorney of such applicant in and for this State upon whom all lawful process in any legal action or proceeding against the health maintenance organization on a cause of action arising, in this State may be served;

(12) a statement reasonably describing the geographic area or areas to be served;

(13) a general description of the complaint procedures to be utilized as required under section 12, hereof;

(14) a general description of the procedures and programs to be implemented to meet the quality of health care requirements in section 4 a. (2), hereof;

(15) a general description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of policy and operation under section 6 b., hereof;

(16) such other information as the commissioner may require to make the determinations required by section 4 hereof.

d. (1) a health maintenance organization shall, unless otherwise provided for in this act, file a notice describing any modification of the information required by subsection c. of this section. Such notice shall be filed with the commissioner prior to the modification. If the commissioner does not disapprove within 30 days of filing, such modification shall be deemed approved.

(2) the commissioner may promulgate rules and regulations exempting from the filing requirements of paragraph (1) of this subsection those items he deems unnecessary.

L.1973, c. 337, s. 3, eff. Dec. 27, 1973.