Current through Register Vol. 47, No. 12, March 26, 2025
(a)
The functions, activities and services undertaken and performed pursuant to the
MCO's article 44 certificate of authority shall be clearly distinguished from
any other function, activity or service through the maintenance of separate
records, reports and accounts for each such MCO function, activity or service.
The records, reports and accounts of each MCO shall be maintained separately
from those of other persons or MCOs in a holding company system. All records
pertaining to the article 44 certified MCO shall be maintained in New York
State.
(b) No funds shall be
transferred or loaned from the MCO article 44 business to any other business,
function or contractor of th e MCO, or to any subsidiary or member of the MCO's
holding company system or to any member or stockholder without the prior
approval of the commissioner and, except in the case of a PHSP, HIV SNP, PCPCP
or MLTC, the superintendent. Repayment of any such approved loans, to th e
extent required, shall be made in accordance with schedules approved by the
superintendent and commissioner. Any such transfers or loans shall require a
certification by the MCO that such transfer or loan is in compliance with and
does not violate any provision of any applicable law or regulation. However,
distributions from an MCO to any member or stockholder shall not be subject to
the provisions of this paragraph to the extent that such distribution was for
the sole purpose of reimbursing at least one of the members or stockholders for
income taxes paid resulting fro m income received by the MCO, or in the case
where one of the members or stockholders is a not-for-profit corporation, the
proportionate share of the distribution attributable to each member or
stockholder; such a distribution shall be permissible without the prior
approval of the commissioner as long as:
(i)
both prior to and subsequent to the distribution, the MCO has reserves in
excess of minimum requirements as prescribe d by this Part; and
(ii) such distribution is consistent with a
tax allocation agreement entered into between the MCO and its members or
stockholders.
(1) No such transfer or loan
shall be approved if the net worth of the MCO after the transfer or loan would
fall below 12.5 percent of its annual net premium income, and all such
transfers and loans must be accompanied by projections submitted by the MCO
showing that its net worth shall continue to meet or exceed 12.5 percent of
annual net premium income for two calendar years following the transfer or
loan.
(2) Notwithstanding the
provisions of paragraph (1) of this subdivision, no such proposed transfer or
loan made by any MCO that received 75 percent or more of its net premium income
from the New York State Medicaid, Family Health Plus, and Child Health Plus
programs during the last calendar year shall be approved if the net worth of
the MCO after such transfer or loan would fall below 15 percent of its annual
net premium revenue, and all such transfers and loans must be accompanied by
projections submitted by the MCO showing that its net worth shall continue to
meet or exceed 15 percent of annual net premium revenue for two calendar years
following the transfer or loan.
(3)
In order to ensure the availability of quality health services for an enrolled
population, the commissioner may waive the provisions of paragraphs 98.11(b)(1)
and (b)(2) should the proposed transfer of funds or loan be used to purchase a
controlling interest, or a substantial portion of the assets, of an MCO
certified to operate under article 44 of the Public Health
Law.
(c) No HMO
which is organized as a stock corporation shall declare or distribute any
dividend on its capital stock, except out of earned surplus, unless upon prior
application therefore, the commissioner, with the advice of the superintendent,
approves such distribution. No such company shall declare or distribute any
dividend to shareholders which, together with all such dividends declared or
distributed by it during the prior 12-month period, exceeds the lesser of 10
percent of its capital and surplus (net worth), as shown by its last statement
on file with the commissioner, or 100 percent of adjusted net investment income
for such period unless, upon prior application therefore, the commissioner,
with the advice of the superintendent, approves a greater dividend payment
based upon his/her finding that the insurer will retain sufficient surplus to
support its obligations and writings. For the purposes of this section,
adjusted net investment income means net investment income for the 12 months
immediately preceding the declaration or distribution of the current dividend
increased by the excess, if any, of net investment income over dividends
declared or distributed during the period commencing 36 months prior to the
declaration or distribution of the current dividend and ending 12 months prior
thereto; surplus means the amount of the HMO's admitted assets in excess of its
capital and its liabilities; and surplus and net worth shall include any
voluntary reserves, or any part thereof, which are not required by law; earned
surplus means the portion of the surplus that represents the net earnings,
gains or profits, after deduction of all losses, that have not been distributed
to the shareholders as dividends, or transferred to stated capital or capital
surplus or applied to other purposes permitted by law, but does not include
unrealized appreciation of assets.
(d) Nothing herein shall prevent a
corporation licensed under article 43 of the Insurance Law from exercising its
rights and undertaking transactions authorized by such law, provided that no
such transaction shall affect or involve the corporation's Public Health Law
article 44 business or line of business or resources thereof, without
compliance with the provisions of this section.
(e)
(1)
Except for a PCPCP, a certified operating MCO, or an MCO that is initially
commencing operations, shall maintain a reserve, to be designated as the
contingent reserve.
(i) The contingent
reserve for an HMO, PHSP or HIV SNP shall be equal to and shall not exceed:
(a) 5 percent of net premium income for the
first calendar year subsequent to the effective date of this Subpart;
(b) 6.5 percent of net premium income for the
second calendar year subsequent;
(c) 7.5 percent of net premium income for the
third calendar year subsequent;
(d)
8.5 percent of net premium income for the fourth calendar year
subsequent;
(e) 9.5 percent of net
premium income for the fifth calendar year subsequent;
(f) 10.5 percent of net premium income for
the sixth calendar year subsequent;
(g) 11.5 percent of net premium income for
the seventh calendar year subsequent;
(h) 12.5 percent of net premium income for
calendar years thereafter.
(ii) Notwithstanding the provisions of
subparagraph (i) above, the contingent reserve applicable to net premium income
generated from the Medicaid Managed Care, Health and Recovery Plans (HARPs) and
HIV SNP programs shall be:
(a) 7.25 percent
of net premium income for 2011;
(b)
7.25 percent of net premium income for 2012;
(c) 7.25 percent of net premium income for
2013;
(d) 7.25 percent of net
premium income for 2014;
(e) 7.25
percent of net premium income for 2015;
(f) 7.25 percent of net premium income for
2016;
(g) 7.25 percent of net
premium income for 2017;
(h) 7.25
percent of net premium income for 2018;
(i) 7.25 percent of net premium income for
2019;
(j) 7.25 percent of net
premium income for 2020;
(k) 7.25
percent of net premium income for 2021;
(l) 7.25 percent of net premium income for
2022;
(m) 7.25 percent of net
premium income for 2023.
(n) 7.25
percent of net premium income for 2024.
(o) 7.25 percent of net premium income for
2025.
(p) 8.25 percent of net
premium income for 2026.
(q) 9.25
percent of net premium income for 2027.
(r) 10.25 percent of net premium income for
2028.
(s) 11.25 percent of net
premium income for 2029.
(t) 12.5
percent of net premium income for 2030.
(u) 12.5 percent of net premium income for
calendar years after 2030.
(iii) Upon an HMO, PHSP or HIV SNP reaching
its maximum contingent reserve of 12.5 percent of its net premium income for a
calendar year, it must continue to maintain its contingent reserve at this
level thereafter. Such contingent reserve requirement shall be deemed to have
been met if the net worth of the HMO, PHSP or HIV SNP, based upon admitted
assets, equals or exceeds the applicable contingent reserve requirement for
such calendar year.
(iv) Upon an
HMO, PHSP or HIV SNP reaching its maximum contingent reserve of 12.5 percent of
its net premium income for a calendar year, it must continue to maintain its
contingent reserve at this level thereafter. Such contingent reserve
requirement shall be deemed to have been met if the net worth of the HMO, PHSP
or HIV SNP, based upon admitted assets, equals or exceeds the applicable
contingent reserve requirement for such calendar year.
(2) Except for PCPCPs, any applicant for
certification as an MCO must establish a contingent reserve in an amount equal
to 5 percent of projected net premium income for its initial calendar year of
operations prior to commencing operations. For each subsequent year of
operations, except for an MLTCP, it must increase its contingent reserve
according to the schedule set forth above.
(3) Except for PCPCPs, if such MCO reinsures
part of its risk under any or all of its contracts by means of a reinsurance
contract approved by the superintendent, with the advice of the commissioner,
as an appropriate substitute for a portion (up to 50 percent) of the required
contingent reserve increase, then the required increase to the contingent
reserve at the end of any calendar year may be reduced up to the amount of the
premium paid by such MCO for such reinsurance during such calendar
year.
(4) Such contingent reserve
may be additionally offset by up to 50 percent of the required level at the end
of each calendar year by means of a reinsurance agreement approved by the
superintendent with the advice of the commissioner.
(5) Except for PCPCPs, such contingent
reserve may, after application therefor by the MCO and approval thereof by the
superintendent and/or commissioner, as appropriate, be reduced below the amount
required to be maintained by this subdivision, provided that no such reduction,
except in the event of an epidemic or other catastrophe resulting in
extraordinary hospital or medical utilization, shall, in the case of such MCO
having a net premium income for the preceding calendar year of (i) less than
$10 million, or (ii) $10 million or more, reduce the contingent reserve below
an amount equal to 75 percent and 50 percent, respectively, of the amount
required to be maintained by subparagraph (i) of this paragraph. Any reduction
so authorized by the superintendent and/or commissioner, as appropriate, shall
be restored within a period of not more than three years in accordance with a
plan, submitted by the MCO and approved by the superintendent and/or
commissioner, as appropriate, which shall provide that such restoration shall
be in addition to, and not in lieu of, the increase in the contingent reserve
herein required, which increase must be made in every year except the year in
which a reduction in the contingent reserve is approved by the superintendent
and/or commissioner, as appropriate.
(6) In the case of MLTCPs, the
superintendent, in consultation with the commissioner, may exclude from the
contingent reserve calculation premium income derived from chronically ill
individuals who are covered by the title XIX program and are confined to a
nursing facility.
(f)
(1) Except for PCPCPs, each MCO shall
establish a deposit in the form of an escrow account for the protection of
enrollees (including enrollee health care service claim obligations), in the
form of a trust account with a custodian, without preference or priority to any
beneficiary entitled to share therein, that shall be either a member of the
Federal Reserve System located in New York State or a New York State chartered
bank or trust company. The superintendent, with the advice of the commissioner,
shall approve the form of the deed of trust and all amendments thereto. The
assets deposited in the escrow account shall be valued according to their
current fair market value, and shall consist only of cash, certificates of
deposit, and investments of the types specified in section 1404(a)(1) and (2)
of the New York Insurance Law. The amount deposited in the escrow account shall
be adjusted annually by the last day of March of each calendar year and shall
be equal to the greater of the following:
(i)
five percent of the estimated expenditures for health care services for the
calendar year conforming to the year of filing; or
(2) As of the 30th day of April of each year,
the custodian shall furnish a statement to the commissioner and superintendent,
identifying the assets that are held in trust as of the 31st day of March of
such year, including the estimated fair market value of such assets. To the
extent that the deposit required as described above for any calendar year is
less than the deposit held in the deed of trust, the State Insurance Department
shall approve withdrawal of any excess funds in the escrow account.
(3) In the case of an MLTCP, such escrow
account may, at the discretion of the superintendent in consultation with the
commissioner, be reduced below the amount required to be maintained by this
subdivision based on the financial condition of the MLTCP and the provision of
less than comprehensive services as defined in this Subpart. In no event will a
reduction of greater than 50 percent of the amount required by this subdivision
be granted.
(4) A reduction granted
to an MLTCP pursuant to paragraph (3) of this subdivision will remain in effect
as long as the underlying requirements, agreements and safeguards submitted to
the superintendent in support of such reduction remain in effect. Proposed
changes to any of these items must be submitted to the superintendent by the
MLTCP at least 30 days prior to their effective date for a new determination
pursuant to paragraph (3) of this subdivision.
(g) Except in the case of an HMO operated by
a corporation licensed under article 43 of the Insurance Law which also
operates a Public Health Law, article 44 line of business, no less than one
third of the members of the governing authority of an MCO shall be composed of
residents of New York State.
(1) Within one
year of the MCO becoming operational, no less than 20 percent of the members of
the governing authority shall be enrollees of such MCO, except that:
(i) in the case of a PHSP or MLTCP, enrollee
or consumer representatives may be substituted for enrollees;
(ii) in the case of a PCPCP, such
requirements shall apply only if the PCPCP has a separate body, for example a
local social services district, that functions as a governing
authority;
(iii) an HMO, PHSP,
PCPCP or MLTCP may, as an alternative to or in addition to subparagraphs (i)
and (ii) of this paragraph, establish an enrollee advisory council which is
representative of the HMO's, PHSP's, PCPCP's or MLTCP's enrollment and which
has direct input to the governing authority;
(iv) in the case of an MCO that operates an
HIV SNP as one of its lines of business or as its sole line of business, the
governing authority must include at least one person with HIV infection to
serve as a consumer representative.
(2) Employees of the MCO, providers of health
services or persons having a business relationship with the MCO may not serve
as enrollee or consumer representatives.
(h) The governing authority of the MCO shall
be responsible for establishment and oversight of the MCO's policies,
management and overall operation, regardless of the existence of any management
contract.
(i) The governing
authority shall not delegate the following elements of management authority to
another person:
(1) direct independent
authority to hire or terminate the chief executive officer;
(2) adoption of budgets and independent
control of the books and records;
(3) authority over the disposition of assets
and the authority to incur on behalf of the MCO liabilities not normally
associated with the day to day operation of the MCO;
(4) independent adoption and/or enforcement
of policies affecting the operation of the MCO and the delivery of health care
services;
(5) oversight by the MCO
of any management functions delegated to a management contractor pursuant to
the provisions of this section or section
98-1.18 of this Subpart;
and
(6) pursuant to section
98-1.21(b)(1) of
this Subpart, primary responsibility for the development and implementation of
the MCO's fraud and abuse prevention plan.
(j) The elements of management authority
described in paragraphs (1) through (8) of this subdivision may be delegated to
another person only pursuant to a management contract approved by the
commissioner. An MCO shall not enter into any agreement delegating management
authority except pursuant to a management contract which complies with the
requirements of subdivisions (h) through (s) of this section and section
98-1.18 of this Subpart. No
management contract shall be approved if the governing authority of the MCO
does not retain sufficient authority and control to discharge its
responsibility as the governing authority of the MCO, including the authority
to discharge the management contractor.
(1)
maintenance of the books and records;
(2) disposition of assets and the incurring
of liabilities normally associated with the day to day operations of the
MCO;
(3) implementation of policies
affecting the delivery of health care services;
(5) implementation of the MCO's budgets and
provision for annual audits;
(6)
quality assurance and improvement, except that when a provider risk sharing
arrangement is entered into between the MCO and a management contractor or an
entity related to the management contractor, the MCO may delegate either
utilization review activity or quality assurance and/or quality improvement
functions, but not both, to that management contractor or to an entity related
to that management contractor. Assisting in the implementation of the MCO's
quality assurance activities and functions is not considered a delegation. If
the contractor has decision making authority and responsibility for the
implemented functions, it is considered a delegation of quality assurance. For
the purposes of this subdivision, an entity related to the management
contractor is defined as an entity which is under common ownership and/or
control with or has control of or is controlled by the management contractor.
An MCO shall not contract with a management contractor to conduct quality
assurance and/or quality improvement functions on the MCO's behalf unless the
management contractor utilizes the MCO's quality assurance and quality
improvement standards or unless the MCO approves the management contractor's
quality assurance and quality improvement standards. The MCO shall not approve
of the management contractor's standards for quality assurance and quality
improvement unless the standards are substantially equivalent to those of the
MCO and to those of other management contractors which have contracted with the
MCO to conduct quality assurance and improvement, and such standards have been
approved by the commissioner;
(7)
any utilization review activity, except that when a provider risk sharing
arrangement is entered into between the MCO and a management contractor or an
entity related to the management contractor, the MCO may delegate either
utilization review activity or quality assurance and/or quality improvement
functions, but not both, to that management contractor, or to an entity related
to that management contractor as defined in paragraph (6) of this subdivision.
An MCO shall not contract with a management contractor to conduct utilization
review activity on its behalf unless the management contractor is utilizing the
MCO's clinical review standards for utilization review or unless the MCO has
approved of the management contractor's clinical review standards. The MCO
shall not approve of the management contractor's clinical review standards
unless they are substantially equivalent to those of the MCO and to those of
other management contractors performing similar functions for the same or
similar services. All utilization review processes must comply with article 49
of the Public Health Law and must be approved by the commissioner. Utilization
review may only be delegated to a registered utilization review agent, as
defined in article 49 of the Public Health Law; and
(8) pursuant to section
98-1.21(b)(1) of
this Subpart, all or part of the functions of the special investigations unit,
which include investigation of cases of suspected fraudulent and abusive
activity and fraud and abuse prevention and reduction activities under the
MCO's fraud and abuse prevention plan.
(k) A proposed management contract must be
submitted to the department for its prior approval at least 90 days prior to
the management contract's proposed effective date. Management contracts shall
be effective only with the prior written consent of the commissioner, and shall
include the following:
(1) a clear
description of the proposed role of the MCO's governing authority and the
elements of authority proposed to be delegated to the management contractor
during the term of the proposed management contract. The description shall
clearly reflect retention by the governing authority of the MCO of ongoing
responsibility for statutory and regulatory compliance;
(2) a provision that clearly recognizes that
the responsibilities of the governing authority of the MCO are in no way
lessened by entering into a management contract, and that any powers not
specifically delegated to the management contractor through the provisions of
the contract remain with the governing authority of the MCO;
(3) a clear acknowledgment of the authority
of the commissioner to terminate the contract pursuant to subdivision (o) of
this section;
(4) a provision
listing procedures and requirements which shall be established by the MCO for
ongoing monitoring by the MCO of the implementation of the contract and the
MCO's fiscal stability, level of services provided and quality of care rendered
during the term of the contract, including requirements for periodic reporting
by the manager;
(5) a provision
that annual reports on the financial operations and any other operational data
requested by the governing authority of the MCO, the commissioner or
superintendent, will be provided by the management contractor;
(6) a provision stating that the management
contract approved by the department shall be the sole agreement between the
management contractor and the governing authority of the MCO for the purpose of
management of the MCO and payment to the management contractor for management
services, and that any amendments or revisions to the management contract shall
be effective only with the prior written consent of the commissioner;
(7) specification of payment terms that are
reasonable and do not jeopardize the financial security of the MCO;
(8) a provision whereby the parties agree
that any changes to the contract required by the commissioner will be made by
the parties immediately upon receipt of written notice from the commissioner;
and
(9) a provision whereby the
parties agree to terminate the management contract within 60 days, in
accordance with subdivision (o) of this section, upon receipt of written notice
from the commissioner.
(l) In addition to a proposed written
contract complying with the provisions of subdivisions (h) through (s) of this
section and section
98-1.18 of this Subpart, the
governing authority of the MCO seeking to enter into a management contract
shall submit to the department the following:
(1) documentation indicating that the
proposed management contractor holds all necessary approvals to do business in
New York State including, as appropriate, an application for authority to do
business in New York State filed with the Secretary of State;
(2) proposed terms of the management
contract, including but not limited to the term and purposes of the agreement,
identification of the contractor's responsibilities, and descriptions of all
staffing to be provided, major equipment, computer and information systems,
required reports, performance criteria, a termination provision, projected
costs and any management or other fee to be charged by the management
contractor;
(3) evidence of the
management contractor's financial stability;
(4) information necessary to determine the
character and competence of the proposed management contractor, its controlling
persons, officers and directors, owners, members or managers of a limited
liability company and any medical director proposed by the management
contractor for the general or medical management of the MCO and/or for
utilization review activities, including evidence that all MCOs and health care
facilities managed or operated by the management contractor, in or out of New
York State, have provided a substantially consistent high level of care during
the term of their management contract or operating certificate. The department
may conduct a limited review of character and competence where the agreement
delegates management activities involving only a single medical service such as
dental, vision or chiropractic services, or delegates limited management
responsibility such as utilization review. For the purposes of this paragraph,
a limited review shall consist of a review of the proposed management
contractor's past performance as a management contractor or in any other
capacity performing any of the functions set forth in subdivision (j) of this
section, as well as the character and competence of the officers and directors,
members or managers of a limited liability company and partners of the
contractor, and, if the proposed delegated management activity is either
medical management or utilization review, the medical director of the proposed
management contractor; and
(5)
except for PCPCPs, evidence that it is financially feasible for the MCO to
enter into the proposed management contract for the term of the contract,
recognizing that the costs of the contract are subject to the approval of the
commissioner and superintendent. To demonstrate evidence of financial
feasibility, such MCO shall submit projected operating and capital budgets for
the required periods. Such budgets shall be consistent with any previously
submitted, certified financial statements and be subject to future audits.
However, no review of financial feasibility shall be required where:
(i) the agreement delegates management
activities for limited services such as dental, vision, behavioral health and
chiropractic services, and the management fee is equal to no more than 25
percent of the MCO's total administrative costs; or
(ii) the agreement delegates a limited scope
of management activities, such as utilization review, for some, most or all
medical services and the management fee is equal to no more than 25 percent of
the MCO's total administrative cost.
(m) The term of a management contract shall
be limited to five years and may be renewed only when authorized by the
commissioner, provided compliance with this section and the following
provisions can be demonstrated:
(1) that the
goals and objectives of the contract have been met within specified time
frames;
(2) that the quality of
care provided by the MCO during the term of the contract has been maintained or
has improved; and
(3) that any
reporting requirements contained in the management contract have been met.
Any application for renewal shall be submitted at least
90 days prior to the expiration of the existing contract.
(n) Any termination or non-renewal
of a management contract shall require the prior written approval of the
commissioner following 90 days prior written notice. The governing authority of
the MCO shall, within the terms of the contract, retain the authority to
discharge the management contractor for cause or based on mutual agreement
between the MCO and the management contractor. The governing authority of the
MCO shall provide a plan for the management of the MCO subsequent to the
discharge, to be submitted with 90 days prior notification to the department of
the MCO's decision to discharge the management contractor. The department shall
be given at least 90 days prior written notice by the MCO of all terminations
whether initiated by the MCO or the manager. Termination may be upon less than
90 days notice provided it is demonstrated to the satisfaction of the
commissioner prior to termination that circumstances exist which justify more
immediate termination.
(o) A
management contract shall terminate and be deemed cancelled, without financial
penalty to the governing authority of the MCO or the MCO itself, not more than
60 days after notification to the governing authority of the MCO and the
management contractor by the department of a determination that the MCO is not
providing adequate care or otherwise assuring the health, safety and welfare of
the enrollees.
(p) In the event
that the management contractor proposes to subcontract any management
functions, the subcontractor must be a signatory to the management contract
which must expressly provide for the subcontracting of management functions to
the subcontractor. The subcontractor will be subject to the provisions of this
Subpart to the same extent as the management contractor, including all
termination provisions, provided that the subcontractor may also be terminated
by the management contractor upon at least 90 days notice and with the prior
written approval of the commissioner.
(q) Any MCO which commits or engages in any
of the following acts shall be subject to action against its certificate of
authority and/or civil penalties under the authority of sections
12 and
4404 of the
Public Health Law and section
98-1.8 of this Subpart;
(1) the governing body of the MCO delegates
one or more management functions without having effected such delegation
pursuant to a management contract approved by the commissioner;
(2) the governing body of the MCO fails to
retain ongoing responsibility for statutory and regulatory
compliance;
(3) the governing body
of the MCO allows the management contractor to assume responsibilities which
cannot be delegated by the governing authority of the MCO;
(4) the governing body of the MCO enters into
more than one agreement with the management contractor for the purpose of
management of the MCO and/or payment to the management contractor for
management services;
(5) the
management contract is amended without the prior written approval of the
commissioner;
(6) the management
contractor is discharged without the prior approval of the
commissioner;
(7) the MCO fails to
comply with a direction from the commissioner to terminate the management
contractor;
(8) the MCO or the
management contractor subcontracts delegated functions without the approval of
the commissioner; or
(9) the MCO
fails to comply or maintain compliance with any other requirements of article
44 of the Public Health Law and this Subpart.
(r) Where the MCO has delegated claims
payment to a management contractor, including an IPA, the management contractor
shall compensate contracted providers in a timely manner consistent with the
provisions of section
3224-a of the
Insurance Law; provided, however, that nothing herein shall limit the liability
of an MCO pursuant to such law for any failure to pay providers in accordance
with the provisions of such law. The MCO may, in its contract with the
management contractor, require the management contractor to indemnify the MCO
for all claims and payments made by the MCO as a result of the management
contractor's failure to make timely payments to providers in a manner
consistent with section
3224-a of the
Insurance Law.
(s) Any management
contract approved by the commissioner and entered into by an MCO and a
management contractor prior to the effective date of this subdivision shall
remain in effect for the term of the contract. In no event shall such a
management contract remain in effect for more than five years from its
effective date, nor shall such a management contract be renewed without
complying with the provisions of this Subpart and without receiving the prior
written approval of the commissioner in accordance with this Subpart. No
written interim consultative agreement entered into between a proposed
management contractor and an MCO prior to the effective date of this
subdivision shall remain in effect for more than 90 days following the
effective date of this subdivision. An existing contract which, upon the
effective date hereof qualifies as a management contract pursuant to the
provisions of subdivision (j) of this section, shall be amended to comply with
the provisions of this section relating to management contracts and submitted
for approval prior to its renewal pursuant to the terms thereof or within one
year of the effective date hereof, whichever first occurs.
(t) An MCO may employ salaried solicitors and
accept business from licensed insurance brokers and agents for business other
than title XIX, and title XXI, and title 11 of article 5 of the Social Services
Law and title I-A of article 25 of the Public Health Law, respectively, on a
commission basis; provided, however, that:
(1) HMOs shall comply with section 4312 of
the State Insurance Law with respect to accepting business from licensed
insurance brokers and agents on a commission basis;
(2) no MCO, for its commercial line of
business, shall pay a fee or commission to a broker or agent who has not agreed
to provide information concerning its arrangements with participating employers
to the MCO upon request;
(3) any
broker or agent selling MCO coverage shall be licensed by the Insurance
Department as an insurance broker or agent;
(4) no MCO shall accept more than 10 percent
of an individual or group premium, which shall be refundable in the event
enrollment is denied by such MCO, from a broker or agent unless upon such
acceptance an individual, or group subject to any waiting period permitted in
this Subpart concerning the commencement of coverage, is enrolled and entitled
to receive comprehensive health services pursuant to a contract approved by the
Superintendent of Insurance; and
(5) any fees or commission rates payable by
an MCO to a broker or agent, which shall be at the same rate for all brokers
and agents utilized by such MCO, shall be reviewed by the Superintendent of
Insurance as part of the MCO's rate filing process and pursuant to any other
applicable provisions of the Insurance Law and regulations.
