N.Y. PBH Law § 4403 — New York Code / Act PBH / Article 44 / Section 4403
Health maintenance organizations; issuance of certificate of authority
Status: in_force

§ 4403. Health maintenance organizations; issuance of certificate of\nauthority. 1. The commissioner shall not issue a certificate of\nauthority to an applicant therefor unless the applicant demonstrates\nthat:\n  (a) it has defined a proposed enrolled population to which the health\nmaintenance organization proposes to provide comprehensive health\nservices and has established a mechanism by which that population may\nadvise in determining the policies of the organization;\n  (b) it has the capability of organizing, marketing, managing,\npromoting and operating a comprehensive health services plan;\n  (c) it is financially responsible and may be expected to meet its\nobligations to its enrolled members. For the purpose of this paragraph,\n"financially responsible" means that the applicant shall assume full\nfinancial risk on a prospective basis for the provision of comprehensive\nhealth services, including hospital care and emergency medical services\nwithin the area served by the plan, except that it may require providers\nto share financial risk under the terms of their contract, it may have\nfinancial incentive arrangements with providers or it may obtain\ninsurance or make other arrangements for the cost of providing\ncomprehensive health services to enrollees; any insurance or other\narrangement required by this paragraph shall be approved as to adequacy\nby the superintendent as a prerequisite to the issuance of any\ncertificate of authority by the commissioner;\n  (d) the character, competence, and standing in the community of the\nproposed incorporators, directors, sponsors or stockholders, are\nsatisfactory to the commissioner;\n  (e) the prepayment mechanism of its comprehensive health services\nplan, the bases upon which providers of health care are compensated, and\nthe anticipated use of allied health personnel are conducive to the use\nof ambulatory care and the efficient use of hospital services;\n  (f) acceptable procedures have been established to monitor the quality\nof care provided by the plan, which, in the case of services provided by\nnon-participating providers, shall be limited to the provision of\nreports to the primary care practitioner responsible for supervising and\ncoordinating the care of the enrollee;\n  (g) approved mechanisms exist to resolve complaints and grievances\ninitiated by any enrolled member; and\n  (h) the contract between the enrollee and the organization meet the\nrequirements of the superintendent as set forth in section forty-four\nhundred six of this article, as to the provisions contained therein for\nhealth services, the procedures for offering, renewing, converting and\nterminating contracts to enrollees, and the rates for such contracts\nincluding but not limited to, compliance with the provisions of section\none thousand one hundred nine of the insurance law.\n  2. The commissioner may adopt and amend rules and regulations pursuant\nto the state administrative procedure act to effectuate the purposes and\nprovisions of this article. Such regulations may include rules and\nprocedures addressing the provision of emergency services, including\npatient notification, obtaining authorization for treatment, transfer of\npatients from one facility to another and emergency transportation\narrangements.\n  3. Nothing contained in this section shall preclude any person or\npersons in developing a health maintenance organization from contacting\npotential participants to discuss the health care services such\norganization would offer, prior to the granting of a certificate of\nauthority.\n  4. Nothing in this article shall preclude any health maintenance\norganization from meeting the requirements of any federal law which\nwould authorize such health maintenance organization to receive federal\nfinancial assistance or which would authorize enrollees to receive\nassistance from federal funds.\n  5. (a) The commissioner, at the time of initial licensure, at least\nevery three years thereafter, and upon application for expansion of\nservice area, shall ensure that the health maintenance organization\nmaintains a network of health care providers adequate to meet the\ncomprehensive health needs of its enrollees and to provide an\nappropriate choice of providers sufficient to provide the services\ncovered under its enrollee's contracts by determining that (i) there are\na sufficient number of geographically accessible participating\nproviders; (ii) there are opportunities to select from at least three\nprimary care providers pursuant to travel and distance time standards,\nproviding that such standards account for the conditions of accessing\nproviders in rural areas; (iii) there are sufficient providers in each\narea of specialty practice to meet the needs of the enrollment\npopulation; (iv) there is no exclusion of any appropriately licensed\ntype of provider as a class; and (v) contracts entered into with health\ncare providers neither transfer financial risk to providers, in a manner\ninconsistent with the provisions of paragraph (c) of subdivision one of\nthis section, nor penalize providers for unfavorable case mix so as to\njeopardize the quality of or enrollees' appropriate access to medically\nnecessary services; provided, however, that payment at less than\nprevailing fee for service rates or capitation shall not be deemed or\npresumed prima facie to jeopardize quality or access.\n  (b) The following criteria shall be considered by the commissioner at\nthe time of a review: (i) the availability of appropriate and timely\ncare that is provided in compliance with the standards of the Federal\nAmericans with Disability Act to assure access to health care for the\nenrollee population; (ii) the network's ability to provide culturally\nand linguistically competent care to meet the needs of the enrollee\npopulation; (iii) the availability of appropriate and timely care that\nis in compliance with the standards of the Paul Wellstone and Pete\nDomenici Mental Health Parity and Addiction Equity Act of 2008, 42\nU.S.C. 18031(j), and any amendments to, and federal guidance and\nregulations issued under those Acts, which shall include an analysis of\nthe rate of out-of-network utilization for covered mental health and\nsubstance use disorder services as compared to the rate of\nout-of-network utilization for the respective category of medical\nservices; (iv) with the exception of initial licensure, the number of\ngrievances filed by enrollees relating to waiting times for\nappointments, appropriateness of referrals and other indicators of plan\ncapacity; and regulations to be promulgated by the commissioner. The\ncommissioner shall determine standards for network adequacy for mental\nhealth and substance use disorder treatment services, including\nsub-acute care in a residential facility, assertive community treatment\nservices, critical time intervention services and mobile crisis\nintervention services and propose regulations, in consultation with the\nsuperintendent of financial services, the commissioner of the office of\nmental health and the commissioner of the office of addiction services\nand supports by December thirty-first, two thousand twenty-three.\n  (c) Each organization shall report on an annual basis the number of\nenrollees and the number of participating providers in each\norganization.\n  6. (a) If a health maintenance organization determines that it does\nnot have a health care provider with appropriate training and experience\nin its panel or network to meet the particular health care needs of an\nenrollee, the health maintenance organization shall make a referral to\nan appropriate provider, pursuant to a treatment plan approved by the\nhealth maintenance organization in consultation with the primary care\nprovider, the non-participating provider and the enrollee or enrollee's\ndesignee, at no additional cost to the enrollee beyond what the enrollee\nwould otherwise pay for services received within the network.\n  (b) A health maintenance organization shall have a procedure by which\nan enrollee who needs ongoing care from a specialist may receive a\nstanding referral to such specialist. If the health maintenance\norganization, or the primary care provider in consultation with the\nmedical director of the organization and specialist if any, determines\nthat such a standing referral is appropriate, the organization shall\nmake such a referral to a specialist. In no event shall a health\nmaintenance organization be required to permit an enrollee to elect to\nhave a non-participating specialist, except pursuant to the provisions\nof paragraph (a) of this subdivision. Such referral shall be pursuant to\na treatment plan approved by the health maintenance organization in\nconsultation with the primary care provider, the specialist, and the\nenrollee or the enrollee's designee. Such treatment plan may limit the\nnumber of visits or the period during which such visits are authorized\nand may require the specialist to provide the primary care provider with\nregular updates on the specialty care provided, as well as all necessary\nmedical information.\n  (c) A health maintenance organization shall have a procedure by which\na new enrollee upon enrollment, or an enrollee upon diagnosis, with (i)\na life-threatening condition or disease or (ii) a degenerative and\ndisabling condition or disease, either of which requires specialized\nmedical care over a prolonged period of time, may receive a referral to\na specialist with expertise in treating the life-threatening or\ndegenerative and disabling disease or condition who shall be responsible\nfor and capable of providing and coordinating the enrollee's primary and\nspecialty care. If the health maintenance organization, or primary care\nprovider in consultation with a medical director of the organization and\na specialist, if any, determines that the enrollee's care would most\nappropriately be coordinated by such a specialist, the organization\nshall refer the enrollee to such specialist. In no event shall a health\nmaintenance organization be required to permit an enrollee to elect to\nhave a non-participating specialist, except pursuant to the provisions\nof paragraph (a) of this subdivision. Such referral shall be pursuant to\na treatment plan approved by the health maintenance organization, in\nconsultation with the primary care provider if appropriate, the\nspecialist, and the enrollee or the enrollee's designee. Such specialist\nshall be permitted to treat the enrollee without a referral from the\nenrollee's primary care provider and may authorize such referrals,\nprocedures, tests and other medical services as the enrollee's primary\ncare provider would otherwise be permitted to provide or authorize,\nsubject to the terms of the treatment plan. If an organization refers an\nenrollee to a non-participating provider, services provided pursuant to\nthe approved treatment plan shall be provided at no additional cost to\nthe enrollee beyond what the enrollee would otherwise pay for services\nreceived within the network.\n  (d) A health maintenance organization shall have a procedure by which\nan enrollee with (i) a life-threatening condition or disease or (ii) a\ndegenerative and disabling condition or disease, either of which\nrequires specialized medical care over a prolonged period of time, may\nreceive a referral to a specialty care center with expertise in treating\nthe life-threatening or degenerative and disabling disease or condition.\nIf the health maintenance organization, or the primary care provider or\nthe specialist designated pursuant to paragraph (c) of this subdivision,\nin consultation with a medical director of the organization, determines\nthat the enrollee's care would most appropriately be provided by such a\nspecialty care center, the organization shall refer the enrollee to such\ncenter. In no event shall a health maintenance organization be required\nto permit an enrollee to elect to have a non-participating specialty\ncare center, unless the organization does not have an appropriate\nspecialty care center to treat the enrollee's disease or condition\nwithin its network. Such referral shall be pursuant to a treatment plan\ndeveloped by the specialty care center and approved by the health\nmaintenance organization, in consultation with the primary care\nprovider, if any, or a specialist designated pursuant to paragraph c of\nthis subdivision, and the enrollee or the enrollee's designee. If an\norganization refers an enrollee to a specialty care center that does not\nparticipate in the organization's network, services provided pursuant to\nthe approved treatment plan shall be provided at no additional cost to\nthe enrollee beyond what the enrollee would otherwise pay for services\nreceived within the network. For purposes of this paragraph, a specialty\ncare center shall mean only such centers as are accredited or designated\nby an agency of the state or federal government or by a voluntary\nnational health organization as having special expertise in treating the\nlife-threatening disease or condition or degenerative and disabling\ndisease or condition for which it is accredited or designated.\n  (e) (1) If an enrollee's health care provider leaves the health\nmaintenance organization's network of providers for reasons other than\nthose for which the provider would not be eligible to receive a hearing\npursuant to paragraph a of subdivision two of section forty-four hundred\nsix-d of this chapter, the health maintenance organization shall provide\nwritten notice to the enrollee of the provider's disaffiliation and\npermit the enrollee to continue an ongoing course of treatment with the\nenrollee's current health care provider during a transitional period of:\n(i) ninety days from the later of the date of the notice to the enrollee\nof the provider's disaffiliation from the organization's network or the\neffective date of the provider's disaffiliation from the organization's\nnetwork; or (ii) if the enrollee is pregnant at the time of the\nprovider's disaffiliation, the duration of the pregnancy and post-partum\ncare directly related to the delivery.\n  (2) During the transitional period the health care provider shall: (i)\ncontinue to accept reimbursement from the health maintenance\norganization at the rates applicable prior to the start of the\ntransitional period, and continue to accept the in-network cost-sharing\nfrom the enrollee, if any, as payment in full; (ii) adhere to the\norganization's quality assurance requirements and to provide to the\norganization necessary medical information related to such care; and\n(iii) otherwise adhere to the organization's policies and procedures,\nincluding but not limited to procedures regarding referrals and\nobtaining pre-authorization and a treatment plan approved by the\norganization.\n  * (f) If a new enrollee whose health care provider is not a member of\nthe health maintenance organization's provider network enrolls in the\nhealth maintenance organization, the organization shall permit the\nenrollee to continue an ongoing course of treatment with the enrollee's\ncurrent health care provider during a transitional period of up to sixty\ndays from the effective date of enrollment, if (i) the enrollee has a\nlife-threatening disease or condition or a degenerative and disabling\ndisease or condition or (ii) the enrollee has entered the second\ntrimester of pregnancy at the effective date of enrollment, in which\ncase the transitional period shall include the provision of post-partum\ncare directly related to the delivery. If an enrollee elects to continue\nto receive care from such health care provider pursuant to this\nparagraph, such care shall be authorized by the health maintenance\norganization for the transitional period only if the health care\nprovider agrees (A) to accept reimbursement from the health maintenance\norganization at rates established by the health maintenance organization\nas payment in full, which rates shall be no more than the level of\nreimbursement applicable to similar providers within the health\nmaintenance organization's network for such services; (B) to adhere to\nthe organization's quality assurance requirements and agrees to provide\nto the organization necessary medical information related to such care;\nand (C) to otherwise adhere to the organization's policies and\nprocedures including, but not limited to procedures regarding referrals\nand obtaining pre-authorization and a treatment plan approved by the\norganization. In no event shall this paragraph be construed to require a\nhealth maintenance organization to provide coverage for benefits not\notherwise covered or to diminish or impair pre-existing condition\nlimitations contained within the subscriber's contract.\n  * NB Effective until January 1, 2027\n  * (f) If a new enrollee whose health care provider is not a member of\nthe health maintenance organization's provider network enrolls in the\nhealth maintenance organization, the organization shall permit the\nenrollee to continue an ongoing course of treatment with the enrollee's\ncurrent health care provider during a transitional period of up to\nninety days from the effective date of enrollment. If the enrollee is\npregnant at the effective date of enrollment, the transitional period\nshall include the provision of care for the duration of the pregnancy\nand postpartum care directly related to the delivery. If an enrollee\nelects to continue to receive care from such health care provider\npursuant to this paragraph, such care shall be authorized by the health\nmaintenance organization for the transitional period only if the health\ncare provider agrees: (A) to accept reimbursement from the health\nmaintenance organization at rates established by the health maintenance\norganization as payment in full, which rates shall be no more than the\nlevel of reimbursement applicable to similar providers within the health\nmaintenance organization's network for such services; (B) to adhere to\nthe organization's quality assurance requirements and agrees to provide\nto the organization necessary medical information related to such care;\nand (C) to otherwise adhere to the organization's policies and\nprocedures including, but not limited to, procedures regarding referrals\nand obtaining pre-authorization and a treatment plan approved by the\norganization. In no event shall this paragraph be construed to require a\nhealth maintenance organization to provide coverage for benefits not\notherwise covered or to diminish or impair pre-existing condition\nlimitations contained within the subscriber's contract.\n  * NB Effective January 1, 2027\n  7. A health maintenance organization that requires or provides for\ndesignation by an enrollee of a participating primary care provider\nshall permit the enrollee to designate any participating primary care\nprovider who is available to accept such individual, and in the case of\na child, shall permit the enrollee to designate a physician (allopathic\nor osteopathic) who specializes in pediatrics as the child's primary\ncare provider if such provider participates in the network of the health\nmaintenance organization.\n  * 8. Notwithstanding any provision of law to the contrary, a health\nmaintenance organization may expand its comprehensive health services\nplan to include services operated, certified, funded, authorized or\napproved by the office for people with developmental disabilities,\nincluding habilitation services as defined in paragraph (c) of\nsubdivision one of section forty-four hundred three-g of this article,\nand may offer such expanded plan to a population of persons with\ndevelopmental disabilities, as such term is defined in the mental\nhygiene law, subject to the following:\n  (a) Such organization must have the ability to provide or coordinate\nservices for persons with developmental disabilities, as demonstrated by\ncriteria to be determined by the commissioner and the commissioner of\nthe office for people with developmental disabilities. Such criteria\nshall include, but not be limited to, adequate experience providing or\ncoordinating services for persons with developmental disabilities;\n  (a-1) If the commissioner and the commissioner of the office for\npeople with developmental disabilities determine that such organization\nlacks the experience required in paragraph (a) of this subdivision, the\norganization shall have an affiliation arrangement with an entity or\nentities that are non-profit organizations or organizations whose\nshareholders are solely controlled by non-profit organizations with\nexperience serving persons with developmental disabilities, as\ndemonstrated by criteria to be determined by the commissioner and the\ncommissioner of the office for people with developmental disabilities,\nwith such criteria including, but not limited to, residential, day, and\nemployment services such that the affiliated entity will coordinate and\nplan services operated, certified, funded, authorized or approved by the\noffice for people with developmental disabilities or will oversee and\napprove such coordination and planning;\n  (a-2) Each enrollee shall receive services designed to achieve\nperson-centered outcomes, to enable that person to live in the most\nintegrated setting appropriate to that person's needs, and to enable\nthat person to interact with nondisabled persons to the fullest extent\npossible in social, workplace and other community settings, provided\nthat all such services are consistent with such person's wishes to the\nextent that such wishes are known and the individual's needs. With\nrespect to an individual receiving non-residential services operated,\ncertified, funded, authorized or approved by the office for people with\ndevelopmental disabilities prior to enrollment in the organization, such\nguidelines shall require the organization to contract with the current\nprovider of such non-residential services at the rates established by\nthe office for ninety days, in order to ensure continuity of care. With\nrespect to an individual living in a residential facility operated or\ncertified by the office for people with developmental disabilities prior\nto enrollment in the organization, the organization shall contract with\nthe provider of residential services for that residence at the rates\nestablished by the office for people with developmental disabilities for\nso long as such person lives in that residence pursuant to an approved\nplan of care;\n  (b) The provision by such organization of services operated,\ncertified, funded, authorized or approved by the office for people with\ndevelopmental disabilities shall be subject to the joint oversight and\nreview of both the department and the office for people with\ndevelopmental disabilities. The department and such office shall require\nsuch organization to provide comprehensive care planning, assess\nquality, meet quality assurance requirements and ensure the enrollee is\ninvolved in care planning.\n  (c) Such organization shall not provide or arrange for services\noperated, certified, funded, authorized or approved by the office for\npeople with developmental disabilities until the commissioner and the\ncommissioner of the office for people with developmental disabilities\napprove program features and rates that include such services, and\ndetermine that such organization meets the requirements of this\nparagraph and any other requirements set forth by the commissioner of\nthe office for people with developmental disabilities;\n  (d) An otherwise eligible enrollee receiving services through the\norganization that are operated, certified, funded, authorized or\napproved by the office for people with developmental disabilities shall\nnot be involuntarily disenrolled from such organization without the\nprior approval of the commissioner of the office for people with\ndevelopmental disabilities. Notice shall be provided to the enrollee and\nthe enrollee may request a fair hearing regarding such disenrollment;\n  (e) The office for people with developmental disabilities shall\ndetermine the eligibility of individuals receiving services operated,\ncertified, funded, authorized or approved by such office to enroll in\nsuch a plan and shall enroll individuals it determines eligible in an\norganization chosen by such individual, guardian or other legal\nrepresentative;\n  (f) The office for people with developmental disabilities, or its\ndesignee, shall complete a comprehensive assessment for enrollees that\nreceive services operated, certified, funded, authorized or approved by\nsuch office. This assessment shall include, but not be limited to, an\nevaluation of the medical, social, habilitative and environmental needs\nof each prospective enrollee as such needs relate to such enrollee's\nhealth, safety, living environment and wishes, to the extent such wishes\nare known. This assessment shall also serve as the basis for the\ndevelopment and provision of an appropriate plan of care for the\nenrollee. Such plan of care shall be focused on the achievement of\nperson-centered outcomes and shall be consistent with and help inform\nany other person-centered plan required for the enrollee by the\ncommissioner of the office for people with developmental disabilities.\nThe initial assessment shall be completed by such office or its designee\nother than the organization and shall be completed, in consultation with\nthe prospective enrollee's health care practitioner as necessary.\nReassessments shall be completed by the office or its designee, which\nmay be the organization. The commissioner of the office for people with\ndevelopmental disabilities shall prescribe the forms on which the\nassessment shall be made.\n  (f-1) Such organization shall provide the department and the office\nfor people with developmental disabilities with a description of the\nproposed marketing plan and how marketing materials will be presented to\npersons with developmental disabilities or their authorized decision\nmakers for the purposes of enabling them to make an informed choice.\n  (g) No person with a developmental disability shall be required to\nenroll in a comprehensive health services plan as a condition of\nreceiving medical assistance and services operated, certified, funded,\nauthorized or approved by the office for people with developmental\ndisabilities until program features and reimbursement rates are approved\nby the commissioner and the commissioner of the office for people with\ndevelopmental disabilities and until such commissioners determine that\nthere are a sufficient number of plans authorized to coordinate care for\npersons with developmental disabilities pursuant to this article\noperating in the person's county of residence to meet the needs of\npersons with developmental disabilities, and that such plans meet the\nstandards of this section.\n  (h) Organizations providing services operated, certified, funded,\nauthorized or approved by the office for people with developmental\ndisabilities shall be subject to all requirements applicable to DISCOs\noperating under section forty-four hundred three-g of this article with\nrespect to quality assurance, grievances and appeals, informed choice,\nparticipating in development of plans of care and requirements with\nrespect to marketing, to the extent that such requirements are not\ninconsistent with this section.\n  (i) The provisions of this subdivision shall only be effective if, for\nso long as, and to the extent that federal financial participation is\navailable for the costs of services provided hereunder to recipients of\nmedical assistance pursuant to title eleven of article five of the\nsocial services law. The commissioner shall make any necessary\namendments to the state plan for medical assistance submitted pursuant\nto section three hundred sixty-three-a of the social services law,\nand/or submit one or more applications for waivers of the federal social\nsecurity act, as may be necessary to ensure such federal financial\nparticipation. To the extent that the provisions of this subdivision are\ninconsistent with other provisions of this article or with the\nprovisions of section three hundred sixty-four-j of the social services\nlaw, the provisions of this subdivision shall prevail.\n  * NB Repealed December 31, 2027\n  9. A health maintenance organization shall have procedures for\ncoverage of medically fragile children including those necessary to\nimplement section forty-four hundred six-i of this article.\n