TITLE 27

Insurance

CHAPTER 27-41

Health Maintenance Organizations

SECTION 27-41-5



   § 27-41-5  Powers of health maintenance

organizations. –

(a) The powers of a health maintenance organization include, but are not

limited to, the following:



   (1) The purchase, lease, construction, renovation, operation,

or maintenance of hospitals, medical facilities, or both, and their ancillary

equipment, and any property that may reasonably be required for its principal

office or for any other purposes that may be necessary in the transaction of

the business of the health maintenance organization as defined in §

27-41-2(h);



   (2) The making of loans to a medical group under contract

with it in furtherance of its program or the making of loans to a corporation

or corporations under its control for the purpose of acquiring or constructing

medical facilities and hospitals or in furtherance of a program providing

health care services to enrollees;



   (3) The furnishing of health care services through providers

that are under contract with or employed by the health maintenance organization;



   (4) The contracting with any person for the performance on

its behalf of certain functions such as marketing, enrollment, and

administration;



   (5) The contracting with an insurance company or a hospital

or medical service corporation licensed in this state for the provision of

insurance, indemnity, or reimbursement against the cost of health care services

provided by the health maintenance organization;



   (6) The offering, in addition to basic health care services,

of:



   (i) Additional health care services;



   (ii) Indemnity benefits covering out of area or emergency

services; and



   (iii) Indemnity benefits, in addition to those relating to

out of area and emergency services, provided through insurance companies or

hospital or medical service corporations.



   (b) A health maintenance organization shall file notice, with

adequate supporting information, with the director of business regulation prior

to the exercise of any power granted in subdivision (a)(1), (a)(2), or (a)(4)

of this section. The director of business regulation shall disapprove any

exercise of power only if in the director's opinion it would substantially and

adversely affect the financial soundness of the health maintenance organization

and endanger its ability to meet is obligations. The director of business

regulation shall approve or disapprove any exercise of power within a

reasonable time, subject to certification of approval from the director of

health and to the requirements of chapter 15 of title 23, the Health Care

Certificate of Need Act of Rhode Island.



   (c) Investment in real estate may be made only for the

purposes set forth in subdivision (a)(1) of this section, except that the

health maintenance organization shall not be required to fully comply with the

uses described in subdivision (a)(1) of this section until December 31 of the

year following the year of purchase. Upon submission to the director of

evidence demonstrating that the health maintenance organization is making

satisfactory progress toward compliance with this subsection, the director may

grant an extension of no more than one year beyond the time provided.



   (d) The director of business regulation may promulgate rules

and regulations exempting from the filing requirement of subsection (b) of this

section those activities having a de minimis effect.



History of Section.

(P.L. 1983, ch. 225, § 2; P.L. 2001, ch. 248, § 1; P.L. 2001, ch.

330, § 1.)