2023 New York Laws › PBH - Public Health › Article 44 - Health Maintenance Organizations › 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.
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, 2025
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.