2012 Arkansas Code
Title 23 - Public Utilities and Regulated Industries
Subtitle 3 - Insurance
Chapter 76 - Health Maintenance Organizations
§ 23-76-108 - Issuance of certificate of authority.

(a) (1) Upon receipt of an application for issuance of a certificate of authority, the Insurance Commissioner shall immediately transmit copies of the application and accompanying documents to the Director of the Department of Health.

(2) The director shall determine whether the applicant for a certificate of authority with respect to health care services to be furnished:

(A) Has demonstrated the legal qualifications and authority and potential ability to assure that the health care services will be provided in a manner to assure both availability and accessibility of adequate personnel and facilities and in a manner enhancing availability and accessibility and continuity of service;

(B) Has arrangements, established in accordance with regulations promulgated by the director for an ongoing quality of health care assurance program concerning health care processes and outcomes; and

(C) Has a procedure established in accordance with regulations of the director to develop, compile, evaluate, and report statistics relating to the cost of its operations, the pattern of utilization of its services, the availability and accessibility of its services, and other matters as may be reasonably required by the director.

(3) (A) Within sixty (60) days of receipt of the application for issuance of a certificate of authority, the director shall certify to the commissioner whether the proposed health maintenance organization meets the requirements of subdivision (a)(2) of this section.

(B) (i) If the director certifies that the health maintenance organization does not meet the requirements, the director shall specify in what respects it is deficient.

(ii) However, the director shall not certify that the requirements are not met unless the proposed health maintenance organization has been given an opportunity to comment on the proposed findings of deficiency.

(C) If requested by the proposed health maintenance organization, the director shall hold a hearing on his or her proposed finding of deficiency.

(b) The commissioner shall issue a certificate of authority to any person filing an application pursuant to § 23-76-107 within sixty (60) days of receipt of the certificate from the director, when the commissioner is satisfied that the following conditions are met:

(1) The persons responsible for the conduct of the affairs of the applicant are competent, trustworthy, and possess good reputations;

(2) The director certifies in accordance with subsection (a) of this section that the health maintenance organization's proposed plan of operation meets the requirements of subdivision (a)(2) of this section;

(3) The health care plan constitutes an appropriate mechanism whereby the health maintenance organization will effectively provide or arrange for the provision of basic health care services on a prepaid basis, through insurance or otherwise, except to the extent of reasonable requirements for copayments;

(4) The health maintenance organization is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees;

(5) The health care plan's arrangements for health care services and the schedule of charges for use therewith are financially sound and reasonable;

(6) Any agreements with insurers, hospitals, medical service corporations, governmental entities, or any other organizations for insuring the payment of the cost of health care services or the provision for automatic applicability of alternative coverage in the event of discontinuance of the plan are reasonable and adequate;

(7) Agreements with providers for the provision of health care services are reasonable and adequate;

(8) The enrollees will be afforded an opportunity to participate in matters of policy and operation pursuant to § 23-76-110;

(9) Nothing in the proposed method of operation, as shown by the information submitted pursuant to § 23-76-107 or by independent investigation is contrary to the public interest;

(10) Any deficiencies certified by the director have been corrected;

(11) Any deposit of cash or securities, in an amount determined to be appropriate by the commissioner pursuant to § 23-76-118, is sufficient to guarantee that the obligations to provide the promised benefits will be performed; and

(12) The applicant has paid-in capital in an amount not less than one hundred thousand dollars ($100,000) and additional working capital or surplus funds in an amount deemed by the commissioner to be adequate in relation to the proposed plan of operation.

(c) A certificate of authority shall be denied only after compliance with the requirements of § 23-76-126.