A. The powers of a health maintenance organization (HMO) 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 property reasonably required for its principal office or for purposes necessary to the transaction of the business of the organization;

2. Transactions between affiliated entities, including loans and the transfer of responsibility under all provider or subscriber contracts between affiliates or between the health maintenance organization and its parent;

3. The furnishing of health care services through providers, provider associations or agents for providers which are under contract with or employed by the health maintenance organization;

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

5. The contracting with an insurance company licensed in this state, or with a hospital or medical service corporation authorized to do business 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 of other health care services in addition to basic health care services. Nonbasic health care services may be offered by a health maintenance organization on a prepaid basis without offering basic health care services to any group or individual; and

7. The joint marketing of products with an insurance company licensed in this state or with a hospital or medical service corporation authorized to do business in this state as long as the company that is offering each product is clearly identified.

B. 1. A health maintenance organization shall file notice, with adequate supporting information, with the Insurance Commissioner prior to the exercise of any power granted in paragraphs 1, 2 or 4 of subsection A of this section that may affect the financial soundness of the health maintenance organization. The Insurance Commissioner shall disapprove the exercise of power only if, in the Insurance Commissioner’s opinion, it would substantially and adversely affect the financial soundness of the health maintenance organization and endanger its ability to meet its obligations. If the Insurance Commissioner does not disapprove such exercise of power within sixty (60) days of the filing, it shall be deemed approved.

2. The Insurance Commissioner may promulgate rules exempting those activities having a de minimis effect from the filing requirement of paragraph 1 of this subsection.

Added by Laws 2003, c. 197, § 5, eff. Nov. 1, 2003.