N.Y. Comp. Codes R. & Regs. Tit. 10 § 98-1.5 - Application for a certificate of authority

(a) No person shall establish or operate an MCO or otherwise hold itself out as an MCO in this State unless it has complied with article 44 of the Public Health Law and this Subpart. However, an applicant may file a certificate of incorporation, articles of organization or amendment thereto, in accordance with section 98-1.4 of this Subpart without violating this subdivision. Except for operating or approved MLTC demonstrations, no person shall initiate enrollment of individuals or deliver prepaid comprehensive health services until it has received a certificate of authority from the commissioner. A foreign corporation or limited liability company shall not be a proper applicant for a certificate of authority. A corporation licensed under the provisions of article 43 of the Insurance Law, which is also certified pursuant to article 44 of the Public Health Law as an HMO to offer a comprehensive health benefit package, shall designate its health maintenance organization as a separate line of business. In the case of such a separate line of business, separate accounting records shall be maintained and separate HMO reporting forms shall be filed with the superintendent and commissioner.
(b) In order to obtain a certificate of authority to operate an MCO, a person shall file an application on forms prescribed by the commissioner. The application shall be signed by the chief executive officer duly authorized by the board of a corporate applicant, a general partner or owner of a proprietary applicant, or the president, the chairman of the board or chief executive officer of a public applicant, or an authorized representative of the applicant. An original and seven copies of the application shall be filed and shall set forth or be accompanied by the following, except that in the case of a PCPCP, the application shall include the information as specified herein and the information prescribed by section 4403-e of the Public Health Law:
(1) copies of the basic organizational documents of the applicant, e.g., the certificate of incorporation, bylaws, articles of organization, partnership agreement, trust agreement, operating agreement or other applicable documents and agreements, and all amendments thereto;
(2)
(i) a list of the names, addresses and official positions of the members of the board of directors, members or managers of a limited liability company, officers, controlling persons, owners or partners and medical director of the proposed MCO, and if the applicant will be a controlled MCO, the same information for the holding company;
(ii) the applicant shall provide written acknowledgment that, once certified, the MCO will provide written notice to DOH immediately upon:
(a) the departure, resignation or termination of any officer, member of the board, member or manager of a limited liability company or the medical director, together with the identity of the individual; and
(b) the hiring of an individual to replace an individual concerning whom notice is required under clause (a) of this subparagraph, together with the identity of the individual hired;
(3) copies of the same financial and personal disclosure information required by the department for the members of the board, officers, controlling persons, owners, partners and medical director of the proposed MCO as set forth in subparagraphs (ii) and (iii) of this paragraph.
(i) The applicant shall be responsible for obtaining from the appropriate licensing authorities the information necessary for the determination by the commissioner of character, competence and performance when information adequate to make such determination is not available to the commissioner in the records of the department.
(ii) Disclosure information shall include, but not be limited to: a list of health care entities owned or operated by the applicant, its holding company or other persons in the holding company system or with which an officer, member of the board, member or manager of a limited liability company, controlling person, owner, partner or medical director has been affiliated; the address of each such entity; the dates of ownership or operation of each such entity; and documentation from the appropriate licensing and regulatory authorities indicating that those health care entities are in substantial compliance with applicable laws and regulations.
(iii) In the event that any such health care entity specified in subparagraph (ii) of this paragraph, while under the control or operation of the applicant, its holding company or other persons in the holding company system or with which an officer, member of the board, member or manager of a limited liability company, controlling person, partner, owner or medical director has been affiliated, has been subjected to financial penalties or suspension or revocation of its operating certificate or license because of failure to comply with provisions governing the conduct and operation of the facility, then information must be provided that describes the nature of the violation, the agency or body enforcing the violation (including its name and address), the steps taken by the facility to remedy the violation, and an indication of whether the suspension, revocation or accreditation has since been restored;
(4) except for PCPCPs, statements of the current financial condition of the applicant and any holding company, including:
(i) a balance sheet and a detailed financial plan covering not less than three years' projected operation of the MCOs, demonstrating the basis upon which the plan will become self-supporting and repay indebtedness and specifying the methods and arrangements for assurance and protection of the MCO's solvency, including complying with required reserves and deposits;
(ii) any insurance policies; and
(iii) a plan for enrollee protection and payment of incurred costs of services in the event of insolvency. For purposes of demonstrating compliance with required reserves and deposits prior to commencing operations, the MCO must determine such reserve and deposit based on section 98-1.11(e) and (f) of this Subpart using projected net premium income and estimated expenditures for the first calendar year as indicated in the detailed financial plan described in subparagraph (i) of this paragraph;
(5) if the applicant intends to contract with a management contractor to manage the proposed MCO, information specified in section 98-1.11(i)-(r) of this Subpart shall be required as part of the application;
(6) a copy of any proposed contract or form of contract, and all attachments thereto, to be made between or among hospitals and any other type of providers of covered services and the proposed MCO.
(i) Such contract should specify any risk-sharing arrangements between the proposed MCO and the provider.
(ii) Such contract shall include express provisions indicating that the provider shall hold MCO enrollees harmless from liability, and shall not bill enrollees under any circumstances for the costs of covered services rendered by the contracting provider, except that nothing herein shall prevent collection of applicable co-payments or co-insurance or permitted deductibles.
(iii) Such contact shall include provisions allowing access by the MCO and participating IPAs, as necessary, to the medical records of all health care providers serving the MCO's enrollees provided the consent of the enrollee is first obtained either at the time of initial enrollment or initial visit with a participating provider.
(iv) Such contact shall include provision which require prior approval by the commissioner of any material changes in contracts between the MCO and health services providers. Proposed material changes shall be submitted to the commissioner in advance of their implementation in accordance with guidelines issued by the commissioner as per subparagraph (v) of this paragraph.
(v) The commissioner may issue guidelines, in consultation with regulated parties, with respect to the process for contract review and required contract provisions, and to effectuate the provisions of this Subpart.
(vi) Prior to approval of the certificate of authority, a photocopy of each of the executed contracts with hospitals, a photocopy of one executed contract with each type of provider for approval as to form and content, and a sworn list in affidavit form of all providers with whom contracts have been executed must be submitted by the proposed MCO.
(vii) An MCO shall not enter into a contract with a not-for-profit or business corporation, limited liability company or professional services limited liability company which proposes to provide the services of an (IPA) unless:
(a) the certificate of incorporation or articles of organization of the IPA, which shall include "independent practice association" or "IPA" within the IPA name, contains powers and purposes permitting the arranging by contract for the delivery or provision of health services by individuals, entities and facilities licensed or certified to practice medicine and other health professions, and, as appropriate, ancillary medical services and equipment, by which arrangements such health care providers and suppliers will provide their services in accordance with and for such compensation as may be established by a contract between the IPA and one or more MCOs which have been granted a certificate of authority pursuant to the provisions of article 44 of the Public Health Law of the State of New York, as amended;
(b) the IPA certificate of incorporation or articles of organization contain(s) the following provision: notwithstanding any other provision herein to the contrary, nothing contained herein shall authorize the corporation, limited liability company or professional services limited liability company to establish, operate, construct, lease or maintain a hospital or to provide hospital services or health-related services or to operate a certified home health agency, a hospice, or an MCO, or to provide a comprehensive health services plan as defined and covered by articles 28, 36, 40 and 44, respectively, of the Public Health Law, or to solicit, collect or otherwise raise or obtain any funds, contributions or grants from any source for the establishment or operation of any hospital or to establish, operate, construct, lease or maintain an adult care facility as provided by article 7 of the Social Services Law, or to solicit, collect or otherwise raise or obtain any funds, contributions or grants from any source for any such purposes; and
(c) any general powers and purposes contained in the certificate of incorporation or articles of organization, as authorized by section 202 of either the Business Corporation Law, the Not-for-Profit Corporation Law or the Limited Liability Company Law, are by express provision in the certificate of incorporation or articles of organization to be exercised only as powers and purposes incidental to accomplishing the primary IPA powers and purposes of the corporation or limited liability company; and
(d) the IPA's certificate of incorporation or articles of organization has been reviewed by the Education and Insurance Departments and the commissioner, have been filed with the Secretary of State and, when presented for filing, had annexed thereto the waiver, approval or consent of the Education and Insurance Departments and the commissioner;
(e) An IPA may, as incidental to its primary IPA powers and purposes:
(1) share risk for the provision of medical services with authorized MCOs and subcapitate or otherwise compensate providers and IPAs with which it has contracted, provided, however, that with respect to each proposed risk sharing contract, the IPA has demonstrated to the commissioner and/or, when applicable, the superintendent, that it is financially responsible and capable of assuming such risk and has satisfactory insurance, stop-loss, reserves or other arrangements so that it may be expected to satisfy its obligations to MCOs, providers and enrollees;
(2) enter into management contracts with MCOs to perform management functions permitted to be delegated by this Subpart or guidelines issued by the commissioner from time to time, subject to the prior written approval of any such contract by the commissioner pursuant to section 98-1.11 of this Subpart; provided, however, that the standards applied by the IPA in performing such delegated functions shall be approved in writing by the delegating MCO as being substantially similar to those applied by the MCO directly and/or pursuant to delegation to the MCO's enrollee population as a whole. IPAs performing management functions pursuant to management contracts with MCOs, as authorized by this paragraph, shall comply with all statutory and regulatory requirements, including registration as a utilization review agent, and timeframes applicable to the responsibilities delegated and activities being managed;
(3) contract with other individuals and entities to obtain technical and administrative services; provided, however, that an IPA may not through contract or any other arrangement, delegate to any person authority to exercise the governing authority and responsibilities of the IPA, nor may it delegate, through assignment or otherwise, any IPA authority or responsibility acquired pursuant to a management agreement with an MCO in accordance with this Subpart to any person unless the parties have received the prior approvals of the commissioner and the delegating MCO as required by statute or this Subpart;
(4) contract with other IPAs in order that providers under contact with such other IPA may be made available to the MCOs and/or workers' compensation preferred provider organizations for which the contracting IPA arranges for the delivery of services; and
(5) have access to enrollee medical records to the extent necessary to perform management functions pursuant to a management contract with an MCO in accordance with this Subpart and pursuant to article 44 of the Public Health Law and guidelines issued by the commissioner, subject to applicable State and Federal requirements concerning the confidentiality of records, including those involving HIV and alcohol and substance abuse services;
(f) An IPA, in addition to the powers and purposes allowed under this Part, may seek certification as an Accountable Care Organization ("ACO") pursuant to article 29-E of the Public Health Law and Part 1003 of this Title. An IPA certified as an ACO shall comply with all the requirements of Part 1003, including but not limited to the requirements of section 1003.6(e) and (g). Upon receiving such certification, an IPA acting as an ACO may contract with the entities listed in section 1003.2(x) of this title.
(g) An IPA, in addition to the powers and purposes allowed under this Part, may include any and all necessary powers and purposes as authorized, allowed, or required under an approved Delivery System Reform Incentive Payment ("DSRIP") Program project pursuant to New York's Partnership Plan section 1115(a) Medicaid Demonstration extension, as amended April 14, 2014.
(7) a copy of any proposed contract to be made with a licensed insurer or accredited reinsurer, for the purpose of insuring or reinsuring for individual catastrophic costs or out-of-area emergency care, if applicable. Prior to approval of the certificate of authority, photocopies of the executed contracts must be submitted to the commissioner and superintendent;
(8) draft copies of individual enrollee contracts and group contracts that are to be entered into with employers, unions, trustees or other organizations, if applicable. Prior to approval of the certificate of authority, the final contracts must be submitted to the commissioner and, if applicable, superintendent;
(9) identification of the type of MCO that is proposed and a description of the service delivery system of the proposed MCO, including the location of primary care providers and, if applicable, providers of other services such as ambulatory, ancillary and hospital services;
(10) a description of the staff for the proposed MCO, including the functional titles of staff. The number and type of staff that will be hired should relate to projections of utilization. Except for PCPCPs, the applicant should discuss the basis on which providers and services have been developed to meet the needs of the projected enrolled population initially and up to the break-even point of operation. The PCPCP applicant should discuss the basis on which providers have been developed to meet the needs of the projected enrolled population;
(11) a description of the population to be enrolled, including projections of enrollment on a monthly basis until the break-even point, or for PCPCPs, a description of the population to be enrolled, including projections of enrollment on a monthly basis for the first three years of operations;
(12) a description of the proposed service area, including a description of access to services as it relates to existing transportation modes;
(13) a description of the benefit package, including a description of copayments, if applicable;
(14) a description of the marketing plan, including all draft marketing materials;
(15) a detailed description of the enrollee grievance and appeal system and complaint procedures to be utilized;
(16) a description of the quality assurance program and the quality assessment and performance improvement plan to be implemented;
(17) a description of the data management information system;
(18) the applicant's proposed rates of payment for enrollees, including the basis and manner of calculating those rates. Except for the MCO in-network component of a large group point-of-service (POS) product of MCOs, which may be experience rated consistent with the formula used in rating the out-of-network component of the POS product and in accordance with section 4308(b) of the Insurance Law, such proposed rate shall be consistent with the principles of community rating. For PCPCPs, such information shall be provided upon request by the commissioner;
(19) for HMO applicants, demonstration of a willingness to provide community services that include at least the following: a willingness to enter into a contract with the local social services district to enroll and serve individuals eligible for benefits under title XIX, including the steps and a time frame for entering into such contract; a willingness to provide coverage to Medicare beneficiaries; and demonstration that the HMO offers open enrollment pursuant to articles 32 and 43 of the Insurance Law, including steps and a time frame for offering such coverage. For the purpose of this section, open enrollment shall mean offering enrollment throughout the year to groups consisting of two or more eligible members who elect to enroll, subject to such reasonable limitations as an affiliation or waiting period not to exceed two months from the date of the enrollee's application until the commencement of coverage, provided that coverage may not be excluded based upon a preexisting condition for groups of more than 50; and
(20) such other and additional information as the commissioner may require to make the determinations required in sections 4403, 4403-a, 4403-c, 4403-e, 4403-f and 4408-a of the Public Health Law. Additional information must be provided within 30 days of the date of a request. The applicant may request from the commissioner an extension beyond the 30-day period, the granting of which may be made by the commissioner upon a finding that an extension is justified by the public interest. Failure to provide such additional information within the time prescribed or as extended by the commissioner shall constitute a withdrawal of the application.
(c) An application under this section may be amended while the matter is pending before the commissioner. Any amendment to an application must be accompanied by a written explanation of the reason for the amendment.
(d) Except for PHSPs, HIV SNPs and PCPCPs, upon receipt of the application for a certificate of authority, the commissioner shall transmit copies of such application and accompanying documents to the superintendent for review and comment.
(e)
(1) An MCO or IPA proposing to change its corporate, company or other name, or to use a new assumed name or change an approved assumed name shall submit an executed copy of the required documentation to the commissioner for review and prior written approval. The submission shall include a certification by an MCO or IPA officer, owner or counsel that use of the proposed name or assumed name in New York is not prohibited by law, that it is not already in use and that it is not otherwise unavailable for use.
(2) The commissioner shall, when reviewing a proposed name, consider whether it is reasonably likely that its use could confuse or mislead the public, MCO enrollees or providers to their detriment and, if he/she determines that it could so confuse or mislead, shall withhold approval.
(3) An MCO or IPA which proposes to use an approved assumed name in an additional jurisdiction(s), or to discontinue the use of an approved assumed name completely or in a particular jurisdiction(s), shall provide the commissioner with 30 days' prior notice of such proposed change(s) together with an executed copy(ies) of the required documentation.
(4) The commissioner may consult with the superintendent concerning any proposed name or assumed name and make available copies of any documentation submitted pursuant to this subdivision.
(5) Use of a name of assumed name which has not received the commissioner's prior approval pursuant to this subdivision shall render the MCO or IPA subject to action or civil penalty pursuant to section 12 of the Public Health Law.
(f) Nothing contained in article 44 of the Public Health Law or this Subpart shall be construed to diminish the applicability of the requirements or provisions of any other laws pursuant to which an entity is organized.

Notes

N.Y. Comp. Codes R. & Regs. Tit. 10 § 98-1.5
Amended, New York State Register December 31, 2014/Volume XXXVI, Issue 52, eff.12/31/2014

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