KRS 304.38-130: Revocation or suspension of certificate of authority.

(1) The commissioner may suspend or revoke any certificate of authority issued to a

health maintenance organization under this subtitle if the commissioner finds that

any of the conditions exist for which the commissioner could suspend or revoke a

certificate of authority as provided in Subtitles 2 and 3 of this chapter or if the

commissioner finds that any of the following conditions exist:

(a) 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 KRS 304.38 -040, unless amendments to such submissions

have been filed with and approved by the commissioner;

(b) The health maintenance organiza tion issues evidence of coverage or uses a

schedule of charges for health care services which do not comply with the

requirements of KRS 304.38-050 or Subtitle 17A of this chapter;

(c) The health maintenance organization does not provide or arrange for hea lth

care services as approved by the commissioner in KRS 304.38-050(1)(a);

(d) The certificate of need and licensure board certifies to the commissioner that

the health maintenance organization fails to meet the requirements of the

board or that the health maintenance organization is unable to fulfill its

obligations to furnish health care services;

(e) 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;

(f) 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;

(g) The continued operation of the health ma intenance organization would be

hazardous to its enrollees;

(h) The health maintenance organization has otherwise failed to substantially

comply with this subtitle; or

(i) The health maintenance organization has contracted with the Department for

Medicaid Services to act as a managed care organization providing Medicaid

benefits pursuant to KRS Chapter 205 and has exhibited willful or frequent

and repeated failure to comply with KRS 304.17A -700 to 304.17A -730,

205.593, and 304.14 -135 and KRS 205.522, 205.53 2 to 205.536, and

304.17A-515.

(2) If the certificate of authority of a health maintenance organization is suspended, the

health maintenance organization shall not, during the period of the suspension,

enroll any additional enrollees except newborn childre n or other newly acquired

dependents of existing enrollees, and shall not engage in any advertising or

solicitation whatsoever.

(3) If the certificate of authority 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 so licitation whatsoever. The commissioner may,

by written order, permit the further operation of the organization as the

commissioner may find to be in the best interest of enrollees, to the end that

enrollees will be afforded the greatest practical opportun ity to obtain continuing

health care coverage. If the commissioner permits such further operation the health

maintenance organization will continue to collect the periodic prepayments required

of enrollees.