N.Y. Public Health Law § 4403: Health maintenance organizations; issuance of certificate of authority

§ 4403. Health maintenance organizations; issuance of certificate of

authority. 1. The commissioner shall not issue a certificate of

authority to an applicant therefor unless the applicant demonstrates

that:

(a) it has defined a proposed enrolled population to which the health

maintenance organization proposes to provide comprehensive health

services and has established a mechanism by which that population may

advise in determining the policies of the organization;

(b) it has the capability of organizing, marketing, managing,

promoting and operating a comprehensive health services plan;

(c) it is financially responsible and may be expected to meet its

obligations to its enrolled members. For the purpose of this paragraph,

"financially responsible" means that the applicant shall assume full

financial risk on a prospective basis for the provision of comprehensive

health services, including hospital care and emergency medical services

within the area served by the plan, except that it may require providers

to share financial risk under the terms of their contract, it may have

financial incentive arrangements with providers or it may obtain

insurance or make other arrangements for the cost of providing

comprehensive health services to enrollees; any insurance or other

arrangement required by this paragraph shall be approved as to adequacy

by the superintendent as a prerequisite to the issuance of any

certificate of authority by the commissioner;

(d) the character, competence, and standing in the community of the

proposed incorporators, directors, sponsors or stockholders, are

satisfactory to the commissioner;

(e) the prepayment mechanism of its comprehensive health services

plan, the bases upon which providers of health care are compensated, and

the anticipated use of allied health personnel are conducive to the use

of ambulatory care and the efficient use of hospital services;

(f) acceptable procedures have been established to monitor the quality

of care provided by the plan, which, in the case of services provided by

non-participating providers, shall be limited to the provision of

reports to the primary care practitioner responsible for supervising and

coordinating the care of the enrollee;

(g) approved mechanisms exist to resolve complaints and grievances

initiated by any enrolled member; and

(h) the contract between the enrollee and the organization meet the

requirements of the superintendent as set forth in section forty-four

hundred six of this article, as to the provisions contained therein for

health services, the procedures for offering, renewing, converting and

terminating contracts to enrollees, and the rates for such contracts

including but not limited to, compliance with the provisions of section

one thousand one hundred nine of the insurance law.

2. The commissioner may adopt and amend rules and regulations pursuant

to the state administrative procedure act to effectuate the purposes and

provisions of this article. Such regulations may include rules and

procedures addressing the provision of emergency services, including

patient notification, obtaining authorization for treatment, transfer of

patients from one facility to another and emergency transportation

arrangements.

3. Nothing contained in this section shall preclude any person or

persons in developing a health maintenance organization from contacting

potential participants to discuss the health care services such

organization would offer, prior to the granting of a certificate of

authority.

4. Nothing in this article shall preclude any health maintenance

organization from meeting the requirements of any federal law which

would authorize such health maintenance organization to receive federal

financial assistance or which would authorize enrollees to receive

assistance from federal funds.

5. (a) The commissioner, at the time of initial licensure, at least

every three years thereafter, and upon application for expansion of

service area, shall ensure that the health maintenance organization

maintains a network of health care providers adequate to meet the

comprehensive health needs of its enrollees and to provide an

appropriate choice of providers sufficient to provide the services

covered under its enrollee's contracts by determining that (i) there are

a sufficient number of geographically accessible participating

providers; (ii) there are opportunities to select from at least three

primary care providers pursuant to travel and distance time standards,

providing that such standards account for the conditions of accessing

providers in rural areas; (iii) there are sufficient providers in each

area of specialty practice to meet the needs of the enrollment

population; (iv) there is no exclusion of any appropriately licensed

type of provider as a class; and (v) contracts entered into with health

care providers neither transfer financial risk to providers, in a manner

inconsistent with the provisions of paragraph (c) of subdivision one of

this section, nor penalize providers for unfavorable case mix so as to

jeopardize the quality of or enrollees' appropriate access to medically

necessary services; provided, however, that payment at less than

prevailing fee for service rates or capitation shall not be deemed or

presumed prima facie to jeopardize quality or access.

(b) The following criteria shall be considered by the commissioner at

the time of a review: (i) the availability of appropriate and timely

care that is provided in compliance with the standards of the Federal

Americans with Disability Act to assure access to health care for the

enrollee population; (ii) the network's ability to provide culturally

and linguistically competent care to meet the needs of the enrollee

population; (iii) the availability of appropriate and timely care that

is in compliance with the standards of the Paul Wellstone and Pete

Domenici Mental Health Parity and Addiction Equity Act of 2008, 42

U.S.C. 18031(j), and any amendments to, and federal guidance and

regulations issued under those Acts, which shall include an analysis of

the rate of out-of-network utilization for covered mental health and

substance use disorder services as compared to the rate of

out-of-network utilization for the respective category of medical

services; (iv) with the exception of initial licensure, the number of

grievances filed by enrollees relating to waiting times for

appointments, appropriateness of referrals and other indicators of plan

capacity; and regulations to be promulgated by the commissioner. The

commissioner shall determine standards for network adequacy for mental

health and substance use disorder treatment services, including

sub-acute care in a residential facility, assertive community treatment

services, critical time intervention services and mobile crisis

intervention services and propose regulations, in consultation with the

superintendent of financial services, the commissioner of the office of

mental health and the commissioner of the office of addiction services

and supports by December thirty-first, two thousand twenty-three.

(c) Each organization shall report on an annual basis the number of

enrollees and the number of participating providers in each

organization.

6. (a) If a health maintenance organization determines that it does

not have a health care provider with appropriate training and experience

in its panel or network to meet the particular health care needs of an

enrollee, the health maintenance organization shall make a referral to

an appropriate provider, pursuant to a treatment plan approved by the

health maintenance organization in consultation with the primary care

provider, the non-participating provider and the enrollee or enrollee's

designee, at no additional cost to the enrollee beyond what the enrollee

would otherwise pay for services received within the network.

(b) A health maintenance organization shall have a procedure by which

an enrollee who needs ongoing care from a specialist may receive a

standing referral to such specialist. If the health maintenance

organization, or the primary care provider in consultation with the

medical director of the organization and specialist if any, determines

that such a standing referral is appropriate, the organization shall

make such a referral to a specialist. In no event shall a health

maintenance organization be required to permit an enrollee to elect to

have a non-participating specialist, except pursuant to the provisions

of paragraph (a) of this subdivision. Such referral shall be pursuant to

a treatment plan approved by the health maintenance organization in

consultation with the primary care provider, the specialist, and the

enrollee or the enrollee's designee. Such treatment plan may limit the

number of visits or the period during which such visits are authorized

and may require the specialist to provide the primary care provider with

regular updates on the specialty care provided, as well as all necessary

medical information.

(c) A health maintenance organization shall have a procedure by which

a new enrollee upon enrollment, or an enrollee upon diagnosis, with (i)

a life-threatening condition or disease or (ii) a degenerative and

disabling condition or disease, either of which requires specialized

medical care over a prolonged period of time, may receive a referral to

a specialist with expertise in treating the life-threatening or

degenerative and disabling disease or condition who shall be responsible

for and capable of providing and coordinating the enrollee's primary and

specialty care. If the health maintenance organization, or primary care

provider in consultation with a medical director of the organization and

a specialist, if any, determines that the enrollee's care would most

appropriately be coordinated by such a specialist, the organization

shall refer the enrollee to such specialist. In no event shall a health

maintenance organization be required to permit an enrollee to elect to

have a non-participating specialist, except pursuant to the provisions

of paragraph (a) of this subdivision. Such referral shall be pursuant to

a treatment plan approved by the health maintenance organization, in

consultation with the primary care provider if appropriate, the

specialist, and the enrollee or the enrollee's designee. Such specialist

shall be permitted to treat the enrollee without a referral from the

enrollee's primary care provider and may authorize such referrals,

procedures, tests and other medical services as the enrollee's primary

care provider would otherwise be permitted to provide or authorize,

subject to the terms of the treatment plan. If an organization refers an

enrollee to a non-participating provider, services provided pursuant to

the approved treatment plan shall be provided at no additional cost to

the enrollee beyond what the enrollee would otherwise pay for services

received within the network.

(d) A health maintenance organization shall have a procedure by which

an enrollee with (i) a life-threatening condition or disease or (ii) a

degenerative and disabling condition or disease, either of which

requires specialized medical care over a prolonged period of time, may

receive a referral to a specialty care center with expertise in treating

the life-threatening or degenerative and disabling disease or condition.

If the health maintenance organization, or the primary care provider or

the specialist designated pursuant to paragraph (c) of this subdivision,

in consultation with a medical director of the organization, determines

that the enrollee's care would most appropriately be provided by such a

specialty care center, the organization shall refer the enrollee to such

center. In no event shall a health maintenance organization be required

to permit an enrollee to elect to have a non-participating specialty

care center, unless the organization does not have an appropriate

specialty care center to treat the enrollee's disease or condition

within its network. Such referral shall be pursuant to a treatment plan

developed by the specialty care center and approved by the health

maintenance organization, in consultation with the primary care

provider, if any, or a specialist designated pursuant to paragraph c of

this subdivision, and the enrollee or the enrollee's designee. If an

organization refers an enrollee to a specialty care center that does not

participate in the organization's network, services provided pursuant to

the approved treatment plan shall be provided at no additional cost to

the enrollee beyond what the enrollee would otherwise pay for services

received within the network. For purposes of this paragraph, a specialty

care center shall mean only such centers as are accredited or designated

by an agency of the state or federal government or by a voluntary

national health organization as having special expertise in treating the

life-threatening disease or condition or degenerative and disabling

disease or condition for which it is accredited or designated.

(e) (1) If an enrollee's health care provider leaves the health

maintenance organization's network of providers for reasons other than

those for which the provider would not be eligible to receive a hearing

pursuant to paragraph a of subdivision two of section forty-four hundred

six-d of this chapter, the health maintenance organization shall provide

written notice to the enrollee of the provider's disaffiliation and

permit the enrollee to continue an ongoing course of treatment with the

enrollee's current health care provider during a transitional period of:

(i) ninety days from the later of the date of the notice to the enrollee

of the provider's disaffiliation from the organization's network or the

effective date of the provider's disaffiliation from the organization's

network; or (ii) if the enrollee is pregnant at the time of the

provider's disaffiliation, the duration of the pregnancy and post-partum

care directly related to the delivery.

(2) During the transitional period the health care provider shall: (i)

continue to accept reimbursement from the health maintenance

organization at the rates applicable prior to the start of the

transitional period, and continue to accept the in-network cost-sharing

from the enrollee, if any, as payment in full; (ii) adhere to the

organization's quality assurance requirements and to provide to the

organization necessary medical information related to such care; and

(iii) otherwise adhere to the organization's policies and procedures,

including but not limited to procedures regarding referrals and

obtaining pre-authorization and a treatment plan approved by the

organization.

* (f) If a new enrollee whose health care provider is not a member of

the health maintenance organization's provider network enrolls in the

health maintenance organization, the organization shall permit the

enrollee to continue an ongoing course of treatment with the enrollee's

current health care provider during a transitional period of up to sixty

days from the effective date of enrollment, if (i) the enrollee has a

life-threatening disease or condition or a degenerative and disabling

disease or condition or (ii) the enrollee has entered the second

trimester of pregnancy at the effective date of enrollment, in which

case the transitional period shall include the provision of post-partum

care directly related to the delivery. If an enrollee elects to continue

to receive care from such health care provider pursuant to this

paragraph, such care shall be authorized by the health maintenance

organization for the transitional period only if the health care

provider agrees (A) to accept reimbursement from the health maintenance

organization at rates established by the health maintenance organization

as payment in full, which rates shall be no more than the level of

reimbursement applicable to similar providers within the health

maintenance organization's network for such services; (B) to adhere to

the organization's quality assurance requirements and agrees to provide

to the organization necessary medical information related to such care;

and (C) to otherwise adhere to the organization's policies and

procedures including, but not limited to procedures regarding referrals

and obtaining pre-authorization and a treatment plan approved by the

organization. In no event shall this paragraph be construed to require a

health maintenance organization to provide coverage for benefits not

otherwise covered or to diminish or impair pre-existing condition

limitations contained within the subscriber's contract.

* NB Effective until January 1, 2027

* (f) If a new enrollee whose health care provider is not a member of

the health maintenance organization's provider network enrolls in the

health maintenance organization, the organization shall permit the

enrollee to continue an ongoing course of treatment with the enrollee's

current health care provider during a transitional period of up to

ninety days from the effective date of enrollment. If the enrollee is

pregnant at the effective date of enrollment, the transitional period

shall include the provision of care for the duration of the pregnancy

and postpartum care directly related to the delivery. If an enrollee

elects to continue to receive care from such health care provider

pursuant to this paragraph, such care shall be authorized by the health

maintenance organization for the transitional period only if the health

care provider agrees: (A) to accept reimbursement from the health

maintenance organization at rates established by the health maintenance

organization as payment in full, which rates shall be no more than the

level of reimbursement applicable to similar providers within the health

maintenance organization's network for such services; (B) to adhere to

the organization's quality assurance requirements and agrees to provide

to the organization necessary medical information related to such care;

and (C) to otherwise adhere to the organization's policies and

procedures including, but not limited to, procedures regarding referrals

and obtaining pre-authorization and a treatment plan approved by the

organization. In no event shall this paragraph be construed to require a

health maintenance organization to provide coverage for benefits not

otherwise covered or to diminish or impair pre-existing condition

limitations contained within the subscriber's contract.

* NB Effective January 1, 2027

7. A health maintenance organization that requires or provides for

designation by an enrollee of a participating primary care provider

shall permit the enrollee to designate any participating primary care

provider who is available to accept such individual, and in the case of

a child, shall permit the enrollee to designate a physician (allopathic

or osteopathic) who specializes in pediatrics as the child's primary

care provider if such provider participates in the network of the health

maintenance organization.

* 8. Notwithstanding any provision of law to the contrary, a health

maintenance organization may expand its comprehensive health services

plan to include services operated, certified, funded, authorized or

approved by the office for people with developmental disabilities,

including habilitation services as defined in paragraph (c) of

subdivision one of section forty-four hundred three-g of this article,

and may offer such expanded plan to a population of persons with

developmental disabilities, as such term is defined in the mental

hygiene law, subject to the following:

(a) Such organization must have the ability to provide or coordinate

services for persons with developmental disabilities, as demonstrated by

criteria to be determined by the commissioner and the commissioner of

the office for people with developmental disabilities. Such criteria

shall include, but not be limited to, adequate experience providing or

coordinating services for persons with developmental disabilities;

(a-1) If the commissioner and the commissioner of the office for

people with developmental disabilities determine that such organization

lacks the experience required in paragraph (a) of this subdivision, the

organization shall have an affiliation arrangement with an entity or

entities that are non-profit organizations or organizations whose

shareholders are solely controlled by non-profit organizations with

experience serving persons with developmental disabilities, as

demonstrated by criteria to be determined by the commissioner and the

commissioner of the office for people with developmental disabilities,

with such criteria including, but not limited to, residential, day, and

employment services such that the affiliated entity will coordinate and

plan services operated, certified, funded, authorized or approved by the

office for people with developmental disabilities or will oversee and

approve such coordination and planning;

(a-2) Each enrollee shall receive services designed to achieve

person-centered outcomes, to enable that person to live in the most

integrated setting appropriate to that person's needs, and to enable

that person to interact with nondisabled persons to the fullest extent

possible in social, workplace and other community settings, provided

that all such services are consistent with such person's wishes to the

extent that such wishes are known and the individual's needs. With

respect to an individual receiving non-residential services operated,

certified, funded, authorized or approved by the office for people with

developmental disabilities prior to enrollment in the organization, such

guidelines shall require the organization to contract with the current

provider of such non-residential services at the rates established by

the office for ninety days, in order to ensure continuity of care. With

respect to an individual living in a residential facility operated or

certified by the office for people with developmental disabilities prior

to enrollment in the organization, the organization shall contract with

the provider of residential services for that residence at the rates

established by the office for people with developmental disabilities for

so long as such person lives in that residence pursuant to an approved

plan of care;

(b) The provision by such organization of services operated,

certified, funded, authorized or approved by the office for people with

developmental disabilities shall be subject to the joint oversight and

review of both the department and the office for people with

developmental disabilities. The department and such office shall require

such organization to provide comprehensive care planning, assess

quality, meet quality assurance requirements and ensure the enrollee is

involved in care planning.

(c) Such organization shall not provide or arrange for services

operated, certified, funded, authorized or approved by the office for

people with developmental disabilities until the commissioner and the

commissioner of the office for people with developmental disabilities

approve program features and rates that include such services, and

determine that such organization meets the requirements of this

paragraph and any other requirements set forth by the commissioner of

the office for people with developmental disabilities;

(d) An otherwise eligible enrollee receiving services through the

organization that are operated, certified, funded, authorized or

approved by the office for people with developmental disabilities shall

not be involuntarily disenrolled from such organization without the

prior approval of the commissioner of the office for people with

developmental disabilities. Notice shall be provided to the enrollee and

the enrollee may request a fair hearing regarding such disenrollment;

(e) The office for people with developmental disabilities shall

determine the eligibility of individuals receiving services operated,

certified, funded, authorized or approved by such office to enroll in

such a plan and shall enroll individuals it determines eligible in an

organization chosen by such individual, guardian or other legal

representative;

(f) The office for people with developmental disabilities, or its

designee, shall complete a comprehensive assessment for enrollees that

receive services operated, certified, funded, authorized or approved by

such office. This assessment shall include, but not be limited to, an

evaluation of the medical, social, habilitative and environmental needs

of each prospective enrollee as such needs relate to such enrollee's

health, safety, living environment and wishes, to the extent such wishes

are known. This assessment shall also serve as the basis for the

development and provision of an appropriate plan of care for the

enrollee. Such plan of care shall be focused on the achievement of

person-centered outcomes and shall be consistent with and help inform

any other person-centered plan required for the enrollee by the

commissioner of the office for people with developmental disabilities.

The initial assessment shall be completed by such office or its designee

other than the organization and shall be completed, in consultation with

the prospective enrollee's health care practitioner as necessary.

Reassessments shall be completed by the office or its designee, which

may be the organization. The commissioner of the office for people with

developmental disabilities shall prescribe the forms on which the

assessment shall be made.

(f-1) Such organization shall provide the department and the office

for people with developmental disabilities with a description of the

proposed marketing plan and how marketing materials will be presented to

persons with developmental disabilities or their authorized decision

makers for the purposes of enabling them to make an informed choice.

(g) No person with a developmental disability shall be required to

enroll in a comprehensive health services plan as a condition of

receiving medical assistance and services operated, certified, funded,

authorized or approved by the office for people with developmental

disabilities until program features and reimbursement rates are approved

by the commissioner and the commissioner of the office for people with

developmental disabilities and until such commissioners determine that

there are a sufficient number of plans authorized to coordinate care for

persons with developmental disabilities pursuant to this article

operating in the person's county of residence to meet the needs of

persons with developmental disabilities, and that such plans meet the

standards of this section.

(h) Organizations providing services operated, certified, funded,

authorized or approved by the office for people with developmental

disabilities shall be subject to all requirements applicable to DISCOs

operating under section forty-four hundred three-g of this article with

respect to quality assurance, grievances and appeals, informed choice,

participating in development of plans of care and requirements with

respect to marketing, to the extent that such requirements are not

inconsistent with this section.

(i) The provisions of this subdivision shall only be effective if, for

so long as, and to the extent that federal financial participation is

available for the costs of services provided hereunder to recipients of

medical assistance pursuant to title eleven of article five of the

social services law. The commissioner shall make any necessary

amendments to the state plan for medical assistance submitted pursuant

to section three hundred sixty-three-a of the social services law,

and/or submit one or more applications for waivers of the federal social

security act, as may be necessary to ensure such federal financial

participation. To the extent that the provisions of this subdivision are

inconsistent with other provisions of this article or with the

provisions of section three hundred sixty-four-j of the social services

law, the provisions of this subdivision shall prevail.

* NB Repealed December 31, 2027

9. A health maintenance organization shall have procedures for

coverage of medically fragile children including those necessary to

implement section forty-four hundred six-i of this article.