NAC: CHAPTER 695C - HEALTH MAINTENANCE ORGANIZATIONS; PROVIDER-SPONSORED ORGANIZATIONS

[Rev. 8/27/2018 12:30:27 PM]

[NAC-695C Revised Date: 8-18]

CHAPTER 695C - HEALTH MAINTENANCE ORGANIZATIONS; PROVIDER-SPONSORED ORGANIZATIONS

GENERAL PROVISIONS

695C.010           Definitions.

695C.019           “Commissioner” defined.

695C.025           “Delivery system intermediary” defined.

695C.040           “Division” defined.

695C.041           “Division of Public and Behavioral Health” defined.

695C.042           “Group practice” defined.

695C.043           “Health care services” defined.

695C.047           “Health service contract” defined.

695C.057           “Medicare + Choice plan” defined.

695C.060           “Organization” defined.

695C.065           “Preexisting condition” defined.

695C.070           “Primary physician” defined.

695C.075           “Provider-sponsored organization” defined.

695C.080           “Subscriber” defined.

695C.090           “Uncovered expenditures” defined.

695C.095           Certain provisions of NRS not applicable to provider-sponsored organizations.

695C.100           Applicability of certain provisions of NRS to provider-sponsored organizations.

695C.105           Treatment of applications, filings and reports as public documents.

CERTIFICATES OF AUTHORITY

695C.111           Provider-sponsored organization: Certificate required to offer Medicare + Choice plan.

695C.115           Application of provider-sponsored organization.

695C.120           Application: Required documents.

695C.121           Application: Submission; incomplete application deemed withdrawn; notice of review; deadline.

695C.122           Application: Member of insurance holding company system.

695C.1225         Provider-sponsored organization: Transmittal of information to State Board of Health; conditions for issuance of certificate.

695C.123           Federal qualification: Information required.

695C.124           Application: Public inspection; notice of hearing.

695C.125           Application of health maintenance organization: Evaluation by Division of Public and Behavioral Health.

695C.1255         Application: Organization to establish that it has met requirements.

695C.126           Application of health maintenance organization: Effect of change after review.

695C.127           Licensure in another state: Application for this State; copy of license; notice of disciplinary action.

695C.128           Licensure in another state: Contract with providers of medical care in state contiguous to Nevada; plan for operation.

695C.1282         Provider-sponsored organization: Denial of certificate.

695C.1284         Provider-sponsored organization: Grounds for suspension or revocation of certificate; effect of revocation.

695C.1286         Provider-sponsored organization: Notice of hearing; action by Commissioner; judicial review.

695C.1288         Provider-sponsored organization: Penalties and remedies for violations; cease and desist order; request for hearing; injunctive relief.

695C.129           Hearings and proceedings.

FINANCIAL REQUIREMENTS; INSURANCE

695C.130           Health maintenance organization: Financial requirements; modification to approved plan of operations.

695C.135           Contract of insurance for health maintenance organization: Amount required; provision concerning insolvency of organization; notice of cancellation.

695C.136           Contract of insurance for provider-sponsored organization: Amount determined by Commissioner; provision concerning insolvency of organization; notice of cancellation.

695C.137           Health maintenance organization: Reserves.

SALE OF HEALTH CARE PLANS

695C.140           Advertising and solicitation.

695C.150           Qualifications of agent or broker.

SERVICES AND BENEFITS

695C.165           Geographic area of service: Expansion.

695C.170           Health maintenance organization: Required services; optional plans.

695C.175           Health maintenance organization: Removal of prescription drug from approved formulary prohibited; exception; movement to different tier in formulary; addition of drug to formulary.

695C.180           Coordination of benefits; lien against recovery from third person.

695C.185           Benefits payable by more than one insurer to provider; restrictions.

PROVIDERS OF MEDICAL CARE

695C.190           Requirements for agreement between provider and organization.

695C.195           Per capita payments.

695C.205           Restriction of choice of primary physician or other provider.

695C.215           Cost sharing.

ADMINISTRATION OF ORGANIZATION

695C.217           Approval of contract for marketing, enrollment, administration or health care services; effect of agreement.

695C.220           Enrollment, cancellation and termination.

695C.230           System for resolving complaints of enrollees of health maintenance organizations: Requirements for approval.

695C.235           System for resolving complaints of enrollees of health maintenance organizations: Annual report.

695C.240           Health maintenance organization: Joint board on consumer satisfaction.

695C.250           Records: Segregation from records of related corporation.

695C.260           Records: Retention.

695C.270           Reports and financial statements; quarterly report of domestic health maintenance organization; extension of time for filing report or statement; disciplinary action for failure to file report or statement.

695C.275           Quality and performance indicators to be included in report of health maintenance organization.

695C.285           Limitation on frequency of increases in premium rates; exceptions.

695C.290           Filing, contents and delivery of disclosure summarizing coverage by health maintenance organization.

695C.295           Disclosures in advertising and sales materials; inclusion of certain information in health care plan.

EXAMINATIONS

695C.300           Requirements for conducting examination.

695C.310           Health maintenance organization: Review of examination of organization required; approved examiners; organization to cooperate during examination.

695C.320           Health maintenance organization: Division of Public and Behavioral Health to notify organization of its findings; objections to findings; dispute resolution; distribution of proposed findings.

695C.325           Provider-sponsored organization: Frequency of examinations; submission of records; acceptance of alternate report.

695C.330           Provider-sponsored organization: Determination of financial condition.

695C.335           Provider-sponsored organization: Procedure; appointment of examiner; maintenance and use of records.

695C.340           Provider-sponsored organization: Payment of expenses.

695C.345           Provider-sponsored organization: Statutory procedures required for examination and hearing.

MISCELLANEOUS PROVISIONS FOR PROVIDER-SPONSORED ORGANIZATIONS

695C.350           Notice and approval required for modification of operations.

695C.355           Accounting principles required for certain reports and transactions.

695C.360           Annual report of financial condition and financial statement; administrative penalty for failure to file report or statement; request for extension.

695C.365           Fees.

695C.370           Availability of information for inspection.

695C.375           Prohibited practices.

695C.380           Rehabilitation, liquidation or conservation.

QUALITY ASSURANCE PROGRAM

695C.400           Requirements; written description of action plan; staff; periodic review of program.

695C.410           Quality assurance committee: Appointment of members; staff; duties.

695C.420           System for collection and maintenance of information related to health care services.

695C.430           Written guidelines for remedial action; final determinations regarding quality of care.

DELIVERY SYSTEM INTERMEDIARY

695C.500           Compliance with statutory provisions.

695C.505           Required provisions of health service contracts.

695C.510           Health service contract to be filed with Commissioner; certain documentation to be included in contract.

695C.515           Commissioner may order cancellation or renegotiation of health service contract under certain circumstances.

695C.520           Conditions for paying claims or acting as agent for utilization review.

695C.525           Provision of health care services.

695C.530           Contract for provision of health care services.

695C.535           Organization prohibited from requiring provision of health care services for which delivery system intermediary has not contracted except under certain circumstances.

695C.540           Contract for evaluation of credentials of providers.

695C.545           Commissioner to have access to books and records.

695C.550           Prohibited acts.

 

GENERAL PROVISIONS

     NAC 695C.010  Definitions. (NRS 679B.130)  As used in this chapter, unless the context otherwise requires, the words and terms defined in:

     1.  NAC 695C.019 to 695C.090, inclusive, have the meanings ascribed to them in those sections; and

     2.  NRS 695C.030 have the meanings ascribed to them in that section.

     (Supplied in codification; A by Comm’r of Insurance, 6-11-86; R129-96, 10-29-97; R132-98, 3-30-99; R148-99, 1-27-2000)

     NAC 695C.019  “Commissioner” defined. (NRS 679B.130)  “Commissioner” means the Commissioner of Insurance.

     (Added to NAC by Comm’r of Insurance by R132-98, eff. 3-30-99)

     NAC 695C.025  “Delivery system intermediary” defined. (NRS 679B.130)

     1.  “Delivery system intermediary” means a partnership, association, corporation or other legal entity which enters into a contract with an organization to provide health care services. The term includes:

     (a) An entity jointly owned and controlled by a hospital and a physician; and

     (b) An entity primarily owned and controlled by physicians.

     2.  The term does not include:

     (a) A provider who enters into a contract with an organization to provide health care services, if that provider furnishes those services directly to enrollees.

     (b) A group practice, if the group practice primarily uses only its employees, partners or shareholders to provide health care services.

     (c) An organization.

     (d) A prepaid limited health service organization.

     (e) A provider or entity whose contract with an organization provides that:

          (1) The organization assumes financial responsibility for any claims presented for payment to the provider or entity by a provider for covered health care services furnished to a subscriber or an enrollee if those claims are not paid by the provider or entity as provided by law or by the contract between the provider and the organization;

          (2) The organization retains the premiums paid and the responsibility for the payment of claims presented;

          (3) All denials for health care services remain the responsibility of the organization; and

          (4) The organization maintains the appropriate amount of reinsurance.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.040  “Division” defined. (NRS 679B.130)  “Division” means the Division of Insurance of the Department of Business and Industry.

     [Comm’r of Insurance, LH-4 part § II, eff. 7-1-74] — (NAC A 5-27-92)

     NAC 695C.041  “Division of Public and Behavioral Health” defined. (NRS 439.200)  “Division of Public and Behavioral Health” means the Division of Public and Behavioral Health of the Department of Health and Human Services.

     (Added to NAC by Bd. of Health, eff. 11-1-95)

     NAC 695C.042  “Group practice” defined. (NRS 679B.130)  “Group practice” has the meaning ascribed to it in NRS 439B.425.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.043  “Health care services” defined. (NRS 679B.130)  “Health care services” has the meaning ascribed to it in NRS 695C.030.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.047  “Health service contract” defined. (NRS 679B.130)  “Health service contract” means an agreement between an organization and a delivery system intermediary in which the delivery system intermediary:

     1.  Accepts risk from the organization in any form, including, without limitation, per capita payments and payments of a percentage of premiums, for one or more health care services which will be furnished to enrollees, members, policyholders or subscribers of the organization by a provider chosen by the delivery system intermediary and the delivery system intermediary assumes financial liability for the covered services; and

     2.  Contracts with a provider to furnish one or more health care services to enrollees, members, policyholders or subscribers of the organization.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.057  “Medicare + Choice plan” defined. (NRS 679B.130)  “Medicare + Choice plan” means a plan of health insurance established pursuant to the program set forth in sections 1851 to 1859, inclusive, of the Social Security Act, 42 U.S.C. §§ 1395w-21 to -28, inclusive.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.060  “Organization” defined. (NRS 679B.130)  “Organization” means a health maintenance organization or a provider-sponsored organization.

     [Comm’r of Insurance, LH-4 part § II, eff. 7-1-74] — (NAC A by R148-99, 1-27-2000)

     NAC 695C.065  “Preexisting condition” defined. (NRS 679B.130)  “Preexisting condition” means a medical condition of an enrollee for which he or she has received treatment during the 6 months preceding enrollment in the organization.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86)

     NAC 695C.070  “Primary physician” defined. (NRS 679B.130)  “Primary physician” means the physician who or group of physicians which:

     1.  Is responsible for the initial and primary care given to an enrollee;

     2.  Is responsible for maintaining the continuity of care to an enrollee; and

     3.  Initiates referrals to a specialist or other person who provides specialized care to an enrollee pursuant to an evidence of coverage.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86)

     NAC 695C.075  “Provider-sponsored organization” defined. (NRS 679B.130)  “Provider-sponsored organization” means an entity that satisfies all the requirements set forth in 42 U.S.C. § 1395w-25(d) and the federal regulations adopted pursuant thereto.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.080  “Subscriber” defined. (NRS 679B.130)  “Subscriber” means an employer or other person purchasing a health care plan for himself or herself or others pursuant to a written contract with an organization.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86)

     NAC 695C.090  “Uncovered expenditures” defined. (NRS 679B.130)  “Uncovered expenditures” means the cost of those services, including services provided during an emergency, rendered by a provider and paid for by an organization during its operation for which:

     1.  There is no agreement between the provider and organization to release the enrollee from liability for the cost of those services; and

     2.  The enrollee may be liable for payment should the organization become insolvent.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86)

     NAC 695C.095  Certain provisions of NRS not applicable to provider-sponsored organizations. (NRS 679B.130, 695C.275)

     1.  Except as otherwise provided in this chapter or in specific provisions of title 57 of NRS, the provisions of title 57 of NRS are not applicable to any provider-sponsored organization issued a certificate of authority under this chapter. This provision does not apply to an insurer licensed and regulated pursuant to title 57 of NRS except with respect to its activities as a provider-sponsored organization authorized and regulated pursuant to this chapter.

     2.  Solicitation of enrollees by a provider-sponsored organization issued a certificate of authority, or its representatives, must not be construed to violate any provision of law relating to solicitation or advertising by practitioners of a healing art.

     3.  A provider-sponsored organization authorized under this chapter shall not be deemed to be practicing medicine and is exempt from the provisions of chapter 630 of NRS.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.100  Applicability of certain provisions of NRS to provider-sponsored organizations. (NRS 679B.130, 695C.275)

     1.  The provisions of NRS 449.465, 679B.159, subsections 2, 4, 17, 18 and 31 of NRS 680B.010, NRS 680B.025 to 680B.060, inclusive, chapter 685B of NRS and NRS 695G.010 to 695G.260, inclusive, apply to a provider-sponsored organization.

     2.  For the purposes of subsection 1, unless the context requires that a provision apply only to insurers, any reference in those sections to “insurer” must be replaced by “provider-sponsored organization.”

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.105  Treatment of applications, filings and reports as public documents. (NRS 679B.130)  All applications, filings and reports required under this chapter must be treated as public documents except as otherwise provided in this chapter.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

CERTIFICATES OF AUTHORITY

     NAC 695C.111  Provider-sponsored organization: Certificate required to offer Medicare + Choice plan. (NRS 679B.130, 695C.275)

     1.  To offer a Medicare + Choice plan in this State, a provider-sponsored organization must file an application with the Commissioner and obtain a certificate of authority to operate as an organization pursuant to chapter 695C of NRS and the regulations adopted pursuant thereto.

     2.  A provider-sponsored organization shall not offer health insurance or other benefits for health care services in this State except through a Medicare + Choice plan, unless the provider-sponsored organization is licensed to provide other services in this State.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.115  Application of provider-sponsored organization. (NRS 679B.130, 695C.275)  For a provider-sponsored organization, an application for a certificate of authority must be verified by an officer or authorized representative of the applicant, must be in a form prescribed by the Commissioner and must set forth or be accompanied by the following:

     1.  A copy of the basic organizational document, if any, of the applicant, and all amendments thereto;

     2.  A copy of the bylaws, rules or regulations, or similar documents, if any, regulating the conduct of the internal affairs of the applicant;

     3.  A list of the names, addresses and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers in the case of a corporation, and the partners or members in the case of a partnership or association;

     4.  A copy of any contract made or to be made between any providers or persons listed in subsection 3 and the applicant;

     5.  A statement generally describing the provider-sponsored organization, the location of facilities at which health care services will be regularly available to enrollees and the type of health care personnel who will provide the health care services;

     6.  Certified financial statements showing the assets, liabilities and sources of financial support of the applicant;

     7.  A financial plan that includes a 3-year projection of the initial operating results anticipated and the sources of working capital as well as any other sources of funding;

     8.  A description of the proposed method of marketing;

     9.  A power of attorney duly executed by the applicant appointing the Commissioner and his or her duly authorized deputies as the true and lawful attorney of such applicant in and for this State upon whom all lawful process in any legal action or proceeding against the provider-sponsored organization on a cause of action arising in this State may be served;

     10.  A statement reasonably describing the geographic area to be served; and

     11.  A description of the procedures for the resolution of enrollee complaints.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.120  Application: Required documents. (NRS 679B.130, 695C.070, 695C.270, 695C.275)  An application for a certificate of authority must be accompanied by all forms specifically required by chapter 695C of NRS and provided by the Division and by:

     1.  All documents describing the financing and ownership of the organization, including financial statements and copies of any contracts made or to be made between any member of the governing board or committee, the officers of the corporation or partners of a partnership or association, or providers, and the proposed organization. The financial statements must depict a net worth of not less than $1,500,000 for a health maintenance organization. All financial statements must be certified by an independent certified public accountant.

     2.  For a health maintenance organization, a surety bond or deposit of cash or securities to secure the debts of the health maintenance organization and for the protection of the enrollees in the amount of $250,000 or more which is deposited with the Commissioner. The bond must include a provision preventing cancellation except after written notice to the Commissioner of not less than 90 days. A health maintenance organization which has made a deposit of securities pursuant to this subsection may withdraw them if it makes an equivalent deposit of cash, securities or a combination of cash and securities acceptable to the Commissioner.

     3.  For a health maintenance organization, blanket fidelity coverage issued by an authorized insurer in an amount of not less than $1,000,000 in the aggregate to cover every director, officer, partner and employee of the health maintenance organization who may receive, collect, disburse or invest funds in connection with the activities of the health maintenance organization.

     4.  A proposed plan of operation for the first 3 years of operation based on projected total income and projected total expenses. The amounts stated for the cost of medical services and the use of them in the proposed plan must be certified by a qualified actuary. The plan must project income and expected costs allocated to:

     (a) Coverage for emergencies or medically necessary services rendered outside of the specified geographic area of service of the organization;

     (b) Per capita payments to primary physicians;

     (c) Fees to other providers of health care;

     (d) Supplemental benefits;

     (e) A contract of stop-loss insurance;

     (f) Expenses of administration; and

     (g) Amortization of necessary costs for the establishment of the organization.

     [Comm’r of Insurance, LH-4 § III, eff. 7-1-74] — (NAC A 6-11-86; 10-29-96; R148-99 & R194-99, 1-27-2000; R248-03, 11-12-2004)

     NAC 695C.121  Application: Submission; incomplete application deemed withdrawn; notice of review; deadline. (NRS 679B.130, 695C.070, 695C.275)

     1.  Any person applying for a certificate of authority as an organization shall file an application as follows:

     (a) An original and three copies of the application must be submitted in binders having three rings.

     (b) If a new page is submitted to supplement or amend the application, the date of submission must be noted on the bottom of the page, and the page must be prepared so it can be placed in the binder with the other materials.

     (c) Each binder must contain a table of contents and include dividers which separate the various sections of the application and indicate the subject in each section.

     (d) One binder must contain the original application, the original of the completed forms supplied by the Division and the original or a certified copy of any supporting document.

     2.  Any incomplete application on which there has been no activity by the applicant for 60 days shall be deemed withdrawn by the applicant. A new application accompanied by all applicable fees must be submitted before the Division takes any further action. Written notice that the application is considered as withdrawn will be provided to the applicant by the Division.

     3.  The Division will notify the applicant when the application is complete and review of the application has begun.

     4.  Any application to be forwarded to the State Board of Health must be submitted to the Division for review as to whether it is complete at least 30 days before the deadline established by the State Board of Health for setting the agenda for its next meeting.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R103-09, 1-28-2010)

     NAC 695C.122  Application: Member of insurance holding company system. (NRS 679B.130, 695C.070, 695C.275)

     1.  Any organization which is wholly or partially owned by an insurance company or other entity defined in NRS 692C.060 shall describe that relationship in its application for a certificate of authority. The organization shall provide the Division with the information described in chapter 692C of NRS concerning filings by an insurance holding company.

     2.  Any filing required of an insurance holding company by chapter 692C of NRS applies at the time of the application by an organization and continues after the issuance of a certificate of authority to the organization.

     3.  For the purposes of this section and NRS 692C.060, the term “organization” is included in the meaning of the term “insurer.” As such, any organization affiliated with any other person is a member of an insurance holding company system.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 12-9-91)

     NAC 695C.1225  Provider-sponsored organization: Transmittal of information to State Board of Health; conditions for issuance of certificate. (NRS 679B.130, 695C.275)  Upon the receipt of an application for a certificate of authority, the Commissioner will transmit a copy of the application and any accompanying documents to the State Board of Health for informational purposes. The Commissioner will issue or deny a certificate of authority to any person filing an application pursuant to NAC 695C.111 within 90 days after the date that the Commissioner receives the application for a certificate of authority to operate as a provider-sponsored organization. A certificate of authority must be issued upon payment of the fees prescribed in NAC 695C.365 if the Commissioner is satisfied that the following conditions are met:

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

     2.  The provider-sponsored organization is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the Commissioner may consider:

     (a) The financial soundness of the arrangements of the health care plan for health care services and the schedule of charges used in connection therewith;

     (b) The adequacy of working capital;

     (c) Any agreement with an insurer, a government or any other organization for insuring the payment of the cost of health care services;

     (d) Any agreement with providers for the provision of health care services; and

     (e) Any surety bond or deposit of cash or securities to guarantee that the obligations will be duly performed.

     3.  Nothing in the proposed method of operation, as shown by the information submitted pursuant to NAC 695C.111, 695C.115 and 695C.350 or by independent investigation, is contrary to the public interest.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.123  Federal qualification: Information required. (NRS 679B.130, 695C.275)

     1.  Any organization which holds a certificate of authority issued by the Commissioner and is seeking qualification as a health maintenance organization pursuant to 42 U.S.C. § 300e-9(c) or qualifies as a provider-sponsored organization by satisfying all the requirements set forth in 42 U.S.C. § 1395w-25(d) and the federal regulations adopted pursuant thereto shall submit to the Division information concerning that qualification, including:

     (a) The date and time of the inspection to be conducted by the Federal Government;

     (b) The name and address of the federal officer responsible for investigating the organization; and

     (c) A copy of any report by the Federal Government qualifying or denying the qualification of the organization.

     2.  Any organization which has been so qualified shall submit to the Division a copy of any:

     (a) Notice of deficiency received from the Federal Government concerning its qualification; and

     (b) Report presented to the Federal Government to maintain its qualification.

     3.  Each organization shall file with the Division, for informational purposes, any documents received from or sent to the Federal Government if those documents materially affect the operation and marketing of the organization in Nevada.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R148-99, 1-27-2000)

     NAC 695C.124  Application: Public inspection; notice of hearing. (NRS 679B.130, 695C.275)

     1.  Any person wishing to review an application for issuance of a certificate of authority for an organization shall submit a request to the Division in writing. The application may be reviewed at the offices of the Division at 1818 East College Parkway, Suite 103, Carson City, Nevada 89706, or a copy of the application may be requested. If a copy of the application is requested, money to reimburse the Division for the cost of postage and of preparing the copy must be submitted with the request.

     2.  If any person wishes to be notified of a pending application or hearing concerning the denial of a certificate of authority, the person must request in writing that he or she be placed on a list maintained by the Division for this purpose.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R148-99, 1-27-2000; R248-03, 11-12-2004)

     NAC 695C.125  Application of health maintenance organization: Evaluation by Division of Public and Behavioral Health. (NRS 439.200, 679B.130, 695C.080)

     1.  The Division of Public and Behavioral Health shall study each application for a certificate of authority to establish and operate a health maintenance organization and give the State Board of Health the opinion whether or not the applicant has:

     (a) Adequate arrangements in his or her health maintenance organization to provide health care; and

     (b) Adequate procedures established to develop, compile, evaluate and report statistical data concerning:

          (1) The cost of its operations;

          (2) The pattern of utilization, availability and accessibility of its services; and

          (3) Such other matters as the Board may reasonably require.

     2.  The Division of Public and Behavioral Health shall present the results of the study, along with the application and other relevant documents, to the State Board of Health as soon as practicable.

     3.  The applicant may be represented at the meeting of the State Board of Health.

     [Bd. of Health, Health Maintenance Plans Art. 2, eff. 4-11-80] — (NAC A 11-1-95; A by Comm’r of Insurance by R148-99, 1-27-2000)

     NAC 695C.1255  Application: Organization to establish that it has met requirements. (NRS 439.200, 679B.130, 695C.080, 695C.275)

     1.  An organization applying for a certificate of authority must establish that:

     (a) The organization has an adequate number of providers in each category of provider of health care necessary to serve its members in each geographic location in its service area;

     (b) The providers of health care with whom the organization has contracted to provide services are located so that the members may obtain health care without unreasonable travel;

     (c) Nonemergency services are available and accessible during normal business hours and emergency services are available at any time;

     (d) For a health maintenance organization, members can schedule appointments within a reasonable time, as determined by the State Board of Health;

     (e) For a health maintenance organization, members are not required to wait for an unreasonable period of time in the office of a provider for a scheduled appointment, as determined by the State Board of Health;

     (f) Members have access to their primary physician through on-call procedures after normal business hours;

     (g) It requires the providers of health care with whom the organization has contracted to provide service to maintain records of the health care of its members which are accessible to other professionals within the organization;

     (h) It provides a health care professional who is primarily responsible for coordinating the overall health care services offered to members;

     (i) It has established a quality assurance program as required pursuant to NAC 695C.400; and

     (j) The organization has established a system to collect data related to the health care services provided to members.

     2.  A health maintenance organization must satisfy the requirements of subsection 1 before the State Board of Health reports to the Commissioner whether the health maintenance organization meets the requirements of NRS 695C.080.

     (Added to NAC by Bd. of Health, eff. 11-1-95; A by Comm’r of Insurance by R148-99, 1-27-2000)

     NAC 695C.126  Application of health maintenance organization: Effect of change after review. (NRS 679B.130)  If an applicant for a certificate of authority to establish and operate a health maintenance organization submits information changing its application after review by the State Board of Health, the Division will deny the application.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R148-99, 1-27-2000)

     NAC 695C.127  Licensure in another state: Application for this State; copy of license; notice of disciplinary action. (NRS 679B.130, 695C.275)

     1.  Any applicant for a certificate of authority who is licensed to operate an organization in another state or whose affiliate or subsidiary is so licensed shall include in its application a copy of that license and, if available, a certificate of good standing from that state’s agency which regulates organizations.

     2.  Any organization already authorized in this State who obtains a license as an organization in another state or whose affiliate or subsidiary obtains such a license shall furnish a copy of that license to the Commissioner within 30 days after receipt of the license.

     3.  An organization also licensed in another state shall notify the Division of any disciplinary action taken by that state and file copies of all documents relating to that action with the Division within 10 days after receipt of the documents by the organization.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R148-99, 1-27-2000)

     NAC 695C.128  Licensure in another state: Contract with providers of medical care in state contiguous to Nevada; plan for operation. (NRS 679B.130, 695C.275)

     1.  If an organization holding a certificate of authority in this State is licensed in a state contiguous to this State and wishes to contract with providers in that state for services for enrollees in this State, the organization shall submit to the Division, for its review and approval, two copies of:

     (a) The plan of the organization for operation in that other state;

     (b) A copy of the evidence of coverage to be issued, if it has not been previously filed with the Division;

     (c) Its list of providers and agreements with the providers; and

     (d) Any other materials concerning the administration of the plan necessary for the decision of the Division concerning the organization.

     2.  The Division will consider such a plan to be a material modification of the operations of the organization in this State and, for a health maintenance organization, will submit copies of all documents to the State Board of Health for its review.

     3.  The Division, before it approves such a plan, will consider whether the other state will approve the plan.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R148-99, 1-27-2000)

     NAC 695C.1282  Provider-sponsored organization: Denial of certificate. (NRS 679B.130, 695C.275)  The Commissioner may deny a certificate of authority only after he or she has complied with NAC 695C.1286.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.1284  Provider-sponsored organization: Grounds for suspension or revocation of certificate; effect of revocation. (NRS 679B.130, 695C.275)

     1.  The Commissioner may suspend or revoke any certificate of authority issued to a provider-sponsored organization pursuant to the provisions of this chapter if he or she finds that any of the following conditions exist:

     (a) The provider-sponsored organization is operating significantly in contravention of its basic organizational document, its health care plan or in a manner contrary to that described in and reasonably inferred from any other information submitted pursuant to NAC 695C.111, 695C.115 or 695C.350, unless any amendments to those submissions have been filed with and approved by the Commissioner;

     (b) The provider-sponsored organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees;

     (c) The continued operation of the provider-sponsored organization would be hazardous to its enrollees; or

     (d) The provider-sponsored organization has otherwise failed to comply substantially with the provisions of this chapter.

     2.  A certificate of authority must be suspended or revoked only after compliance with the requirements of NAC 695C.1286.

     3.  If the certificate of authority of a provider-sponsored organization is revoked, the provider-sponsored organization shall proceed to wind up its affairs and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of the provider-sponsored organization. The Commissioner may by written order permit such further operation of the provider-sponsored organization as he or she may find to be in the best interest of enrollees to the end that enrollees are afforded the greatest practical opportunity to obtain continuing coverage for health care.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.1286  Provider-sponsored organization: Notice of hearing; action by Commissioner; judicial review. (NRS 679B.130, 695C.275)

     1.  When the Commissioner has cause to believe that grounds for the denial of an application for a certificate of authority to operate a provider-sponsored organization exist, or that grounds for the suspension or revocation of a certificate of authority for a provider-sponsored organization exist, he or she will notify the provider-sponsored organization in writing specifically stating the grounds for denial, suspension or revocation and fixing a time at least 30 days thereafter for a hearing on the matter.

     2.  After the hearing, or upon the failure of the provider-sponsored organization to appear at the hearing, the Commissioner will take action as is deemed advisable on the written findings which must be mailed to the provider-sponsored organization. The actions of the Commissioner are subject to review by the First Judicial District Court of the State of Nevada in and for Carson City. The court may, in disposing of the issue before it, modify, affirm or reverse the order of the Commissioner in whole or in part.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.1288  Provider-sponsored organization: Penalties and remedies for violations; cease and desist order; request for hearing; injunctive relief. (NRS 679B.130, 695C.275)

     1.  The Commissioner may, in lieu of suspension or revocation of a certificate of authority of a provider-sponsored organization pursuant to NAC 695C.1284, levy an administrative penalty in an amount not more than $2,500 for each act or violation if reasonable notice in writing is given of the intent to levy the penalty.

     2.  If the Commissioner for any reason has cause to believe that any violation of this chapter has occurred or is threatened, the Commissioner may give notice to the provider-sponsored organization and to the representatives, or other persons who appear to be involved in the suspected violation, to arrange a conference with the alleged violators or their authorized representatives to attempt to determine the facts relating to the suspected violation, and, if it appears that any violation has occurred or is threatened, to arrive at an adequate and effective means of correcting or preventing the violation.

     3.  The proceedings conducted pursuant to the provisions of subsection 2 will not be governed by any formal procedural requirements and may be conducted in such manner as the Commissioner may deem appropriate under the circumstances.

     4.  The Commissioner may issue an order directing a provider-sponsored organization or a representative of a provider-sponsored organization to cease and desist from engaging in any act or practice in violation of the provisions of this chapter.

     5.  Within 30 days after service of the order to cease and desist, the respondent may request a hearing on the question of whether acts or practices in violation of this chapter have occurred. The hearing will be conducted pursuant to the provisions of chapter 233B of NRS, and judicial review will be available as provided therein.

     6.  In the case of any violation of the provisions of this chapter, if the Commissioner elects not to issue a cease and desist order, or in the event of noncompliance with a cease and desist order issued pursuant to subsection 4, the Commissioner may institute a proceeding to obtain injunctive relief, or seek other appropriate relief in the district court of the judicial district of the county in which the violator resides.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.129  Hearings and proceedings. (NRS 679B.130, 695C.275)

     1.  Any person not entitled to a hearing pursuant to NRS 695C.340 or NAC 695C.1286 who is aggrieved by an action of the Commissioner in his or her approval, denial or revocation of a certificate of authority for an organization may request a hearing as provided in NRS 679B.310.

     2.  Any person who wants to intervene in any proceeding held pursuant to NRS 695C.340 or NAC 695C.1286 may request that intervention as provided in NAC 679B.460, 679B.470 and 679B.480.

     3.  Any administrative proceeding under chapter 695C of NRS and this chapter will be held pursuant to the procedures in NAC 679B.161 to 679B.480, inclusive.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 12-15-94; R148-99, 1-27-2000)

FINANCIAL REQUIREMENTS; INSURANCE

     NAC 695C.130  Health maintenance organization: Financial requirements; modification to approved plan of operations. (NRS 679B.130, 695C.140)

     1.  Except as otherwise provided in this section, a health maintenance organization which receives a certificate of authority shall maintain and report on its financial statement filed with the Commissioner pursuant to NRS 695C.210 a minimum net worth in an amount which is the greater of:

     (a) One million five hundred thousand dollars;

     (b) Two percent of the first $150,000,000 earned as revenue from premiums collected in the preceding 12-month period, plus 1 percent of the amount in excess of $150,000,000 earned as revenue from premiums collected in the preceding 12-month period; or

     (c) The amount of risk-based capital determined in the manner set forth in NRS 681B.550 and the regulations adopted pursuant thereto.

     2.  In addition to the requirements set forth in subsection 1, a health maintenance organization which receives a certificate of authority shall maintain:

     (a) A separate surety bond or deposit of not less than $250,000 of cash or securities for the protection of enrollees of this State;

     (b) A contract of stop-loss insurance as required by NAC 695C.135 for new health maintenance organizations;

     (c) Blanket fidelity coverage issued by an authorized insurer as required by NAC 695C.120 for new health maintenance organizations; and

     (d) The operating and insolvency reserves required for new health maintenance organizations.

     3.  In addition to the requirements set forth in subsections 1 and 2, a domestic health maintenance organization which receives a certificate of authority shall maintain a portion of not less than $500,000 of the required minimum net worth in the form of a deposit of cash or securities eligible for deposit under NRS 682B.030 for the sole benefit and protection of enrollees of this State.

     4.  If the Commissioner determines that the financial condition of a health maintenance organization fails to comply with the conditions set forth in NRS 695C.090, he or she may require the organization to:

     (a) Maintain a net worth that is greater than the amount required by subsection 1;

     (b) Obtain a written guarantee from a business which has sufficient surplus and an adequate history of generating net income to guarantee the maintenance of the minimum net worth of the health maintenance organization required by subsection 1 and obtain approval of the written guarantee and guarantor from the Commissioner; or

     (c) Comply with paragraphs (a) and (b).

     5.  If a health maintenance organization proposes to make a material modification to its approved plan of operations, it shall submit a copy of its proposed modification to the Commissioner. The Commissioner may, as a condition of approval for the proposed modification by the health maintenance organization, require the health maintenance organization to increase the amount of reserves, deposits, bonds or minimum net worth it is required to maintain. The Commissioner may, in making such a determination, consider the conditions set forth in NRS 695C.090.

     [Comm’r of Insurance, LH-4 § IV, eff. 7-1-74] — (NAC A 6-11-86; 10-29-96; R148-99, 1-27-2000; R005-03, 2-12-2004; R248-03, 11-12-2004; R106-06, 9-18-2008)

     NAC 695C.135  Contract of insurance for health maintenance organization: Amount required; provision concerning insolvency of organization; notice of cancellation. (NRS 679B.130)

     1.  Each health maintenance organization shall obtain a contract of insurance for the cost of providing basic health care services which exceed in the aggregate:

     (a) For a health maintenance organization in operation for 2 years or less, $30,000 per enrollee per year;

     (b) For a health maintenance organization in operation for more than 2 years which has a free surplus of $2,000,000 or less, $50,000 per enrollee per year;

     (c) For a health maintenance organization in operation for more than 2 years which has a free surplus of more than $2,000,000, $100,000 per enrollee per year;

     (d) For a health maintenance organization in operation for more than 3 years which has a free surplus of more than $4,000,000, $150,000 per enrollee per year; and

     (e) For a health maintenance organization in operation for more than 5 years which has a free surplus of more than $8,000,000, $200,000 per enrollee per year.

     2.  The contract of insurance must include a provision that, in the case of the insolvency of the health maintenance organization, the insurer will pay all claims made by an enrollee for the period for which a premium has been paid to the health maintenance organization. The contract may have an aggregate limit of $5,000,000 but must specifically provide for the:

     (a) Continuation of benefits to enrollees for the period for which the subscribers have made prepayments to the health maintenance organization;

     (b) Continuation of benefits for those enrollees confined in a medical facility or facility for the dependent at the time of the insolvency of the health maintenance organization until the enrollee is discharged from the facility; and

     (c) Payment of a provider not affiliated with the health maintenance organization who provided medically necessary services, as described in the evidence of coverage, to an enrollee.

     3.  Any contract of insurance obtained by a health maintenance organization under this section may be cancelled only after 90 days’ written notice of the cancellation is given to the Division by the health maintenance organization and its insurer.

     4.  As used in this section:

     (a) “Basic health care services” includes hospitalization but excludes any benefits under an optional plan for dental, vision or pharmaceutical benefits.

     (b) “Free surplus” means the total capital and surplus, as reported on the National Association of Insurance Commissioners’ form of annual statement.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R129-96, 10-29-97; R148-99, 1-27-2000; R248-03, 11-12-2004)

     NAC 695C.136  Contract of insurance for provider-sponsored organization: Amount determined by Commissioner; provision concerning insolvency of organization; notice of cancellation. (NRS 679B.130, 695C.275)

     1.  A provider-sponsored organization shall obtain a contract of insurance for the cost of providing a Medicare + Choice plan which exceeds, per enrollee, an amount to be determined by the Commissioner.

     2.  The contract of insurance may have an aggregate limit in an amount to be determined by the Commissioner. Subject to that aggregate limit, the contract of insurance must:

     (a) Include a provision which states that, in case of the insolvency of the provider-sponsored organization, the insurer will pay all claims made by an enrollee for the period during which a premium was paid to the provider-sponsored organization.

     (b) Specifically provide for:

          (1) The continuation of benefits to enrollees for the period during which prepayments were made to the provider-sponsored organization;

          (2) The continuation of benefits for enrollees confined in a medical facility or facility for the dependent at the time of the insolvency of the provider-sponsored organization until the enrollee is discharged from the facility; and

          (3) The payment of a provider who is not affiliated with the provider-sponsored organization and who provided medically necessary services, as described in the evidence of coverage, to an enrollee during the time in which payments were made to the provider-sponsored organization.

     3.  A contract of insurance obtained by a provider-sponsored organization pursuant to this section must not be cancelled unless the provider-sponsored organization and insurer provide the Commissioner with written notice at least 90 days before the cancellation.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.137  Health maintenance organization: Reserves. (NRS 679B.130)

     1.  After the first year of operation, as a protection against insolvency, each health maintenance organization shall retain as reserves an amount equal to twice its actual average monthly uncovered expenditures for the previous year of operation or $500,000, whichever is greater.

     2.  A health maintenance organization may not reduce the reserves for protection against insolvency unless it notifies the Commissioner in writing and receives his or her written approval of the reduction. Any unauthorized reduction in this reserve creates a presumption that the health maintenance organization is in an unsound financial condition.

     3.  All reserves maintained by a health maintenance organization pursuant to this section:

     (a) Must be deposited in a trust account in a bank chartered by this State or a bank that is a member of the Federal Reserve System and has been approved by the Commissioner. All income earned by the account belongs to the health maintenance organization and may be credited and paid to the health maintenance organization and used for its operations.

     (b) Are in addition to those reserves established by the health maintenance organization according to good business and accounting practices for incurred but not reported claims and other similar claims.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A by R148-99 & R194-99, 1-27-2000)

SALE OF HEALTH CARE PLANS

     NAC 695C.140  Advertising and solicitation. (NRS 679B.130, 695C.275, 695C.300)

     1.  An organization which advertises its benefits must, in that same advertisement, plainly state the exclusions or limitations of the plan.

     2.  Any period of waiting required before an enrollee is eligible to receive benefits under a health care plan must be stated clearly in boldface type in any advertisement.

     3.  An organization shall not solicit persons door to door.

     4.  Any printed advertisement used by an organization must refer to the health care plan being sold by the number used to file that plan with the Division.

     5.  Advertisements by organizations must comply with the provisions of NAC 689A.010 to 689A.270, inclusive.

     [Comm’r of Insurance, LH-4 § VI, eff. 7-1-74] — (NAC A 6-11-86)

     NAC 695C.150  Qualifications of agent or broker. (NRS 679B.130, 695C.280)  A person shall not solicit or sell to any group or person any health care plan which provides for comprehensive health care services unless he or she:

     1.  Has a valid agent’s or broker’s license to sell health insurance issued by the Commissioner;

     2.  Has, if licensed as an agent, been appointed by the organization; and

     3.  Meets all other requirements for an agent or broker licensed to sell health insurance.

     [Comm’r of Insurance, LH-4 § VII, eff. 7-1-74] — (NAC A 6-11-86; R082-98, 1-27-2000)

SERVICES AND BENEFITS

     NAC 695C.165  Geographic area of service: Expansion. (NRS 679B.130, 695C.275)

     1.  Any organization which wants to expand its geographic area of service from that stated in its application shall submit to the Division:

     (a) A copy of a written description of the area it proposes to serve;

     (b) A list of the providers who will offer comprehensive health care services to the enrollees of the organization in that area;

     (c) A copy of the contract with those providers;

     (d) A statement describing the effect of the expansion on the operation and financial position of the organization and certifying that the organization is financially able to expand;

     (e) A statement describing the method of marketing and the projected number of enrollees from the new area;

     (f) Proof that the organization has notified its insurers for its contracts of surety, fidelity and stop-loss insurance of the proposed changes; and

     (g) The fee for amending its certificate of authority.

     2.  A health maintenance organization that wants to expand its geographic area shall send one copy of its submission to the State Board of Health for its review.

     3.  Any request by an organization to expand the area of its service will be treated by the Division as a material modification of the operation of the organization. If the organization subsequently submits information amending the request for expansion, the Division will presume that the original request has been withdrawn and the period for approval or disapproval will be computed from the date of receipt of the amended request.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R148-99, 1-27-2000)

     NAC 695C.170  Health maintenance organization: Required services; optional plans. (NRS 679B.130)

     1.  The comprehensive health care services offered by a health maintenance organization in its evidence of coverage must provide for basic and preventive medical care for the enrollee which is medically necessary, including:

     (a) Services in an emergency provided by a hospital or physician;

     (b) Any care received as an admitted patient at a hospital;

     (c) Care by a physician; and

     (d) Medical services as an outpatient.

     2.  The health maintenance organization, as a part of its comprehensive services, must offer to the subscriber optional plans for optometric, dental and pharmaceutical care. The subscriber may be subject to an additional charge for these types of care.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A by R148-99, 1-27-2000)

     NAC 695C.175  Health maintenance organization: Removal of prescription drug from approved formulary prohibited; exception; movement to different tier in formulary; addition of drug to formulary. (NRS 679B.130, 687B.120)

     1.  Except as otherwise provided in this section, a health maintenance organization that offers a health benefit plan in the individual market which provides coverage for prescription drugs and uses a formulary that has been approved by the Commissioner pursuant to NRS 687B.120 shall not:

     (a) Remove a prescription drug from the formulary; or

     (b) If the formulary includes two or more tiers of benefits providing for different deductibles, copayments or coinsurance applicable to the prescription drugs in each tier, move a drug to a tier with a larger deductible, copayment or coinsurance,

Ê during the plan year for which the formulary was approved by the Commissioner.

     2.  A health maintenance organization described in subsection 1 may:

     (a) Remove a prescription drug from a formulary at any time if:

          (1) The drug is not approved by the United States Food and Drug Administration;

          (2) The United States Food and Drug Administration issues a notice, guidance, warning, announcement or any other statement about the drug which calls into question the clinical safety of the drug; or

          (3) The prescription drug is approved by the United States Food and Drug Administration for use without a prescription.

     (b) If the health maintenance organization’s formulary includes two or more tiers of benefits providing for different deductibles, copayments or coinsurance applicable to the prescription drugs in each tier, move a brand name prescription drug to a tier with a larger deductible, copayment or coinsurance if the health maintenance organization adds to the formulary a generic prescription drug that is approved by the United States Food and Drug Administration for use as an alternative to the brand name prescription drug at:

          (1) The benefit tier from which the brand name prescription drug is being moved; or

          (2) A benefit tier that has a smaller deductible, copayment or coinsurance than the benefit tier from which the brand name prescription drug is being moved.

     3.  This section does not prohibit a health maintenance organization from adding a prescription drug to a formulary at any time.

     4.  This section does not apply to a grandfathered plan.

     5.  As used in this section, “health benefit plan” has the meaning ascribed to it in NRS 687B.470.

     (Added to NAC by Comm’r of Insurance by R074-14, 12-21-2015, eff. 1-1-2016)

     NAC 695C.180  Coordination of benefits; lien against recovery from third person. (NRS 679B.130, 695C.275)

     1.  An organization may coordinate its benefits with any policy of individual or group health insurance offered by an insurance company, trust established by an employer to pay for health care for his or her employees, group contract for hospital, medical or dental service offered by a nonprofit corporation for hospital, medical or dental service, or evidence of coverage offered by another health maintenance organization. Before an organization may seek coordination for the payment of the cost of benefits, it must first provide those benefits to its enrollees. If an organization intends to coordinate its benefits, it shall do so based upon standards filed with and approved by the Division.

     2.  Except as otherwise provided by specific federal or state statute or regulation, an organization may include in its evidence of coverage a provision for subrogation regarding the right of an enrollee to recover, and the imposition of a lien upon any recovery by an enrollee, from a third person for the cost of the medical benefits which were provided by the organization to the enrollee because of injuries incurred by the enrollee as a result of the actions of the third person. The amount of the lien must not be more than the reasonable value of the services rendered by the organization.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; 12-15-94; R089-17, 5-16-2018)

     NAC 695C.185  Benefits payable by more than one insurer to provider; restrictions. (NRS 679B.130, 695C.275)  When the benefits set forth in any evidence of coverage are payable by more than one insurer to a provider, the evidence of coverage must not require the insured, or any secondary insurer who is a:

     1.  Group health insurer;

     2.  Health maintenance organization; or

     3.  Nonprofit corporation for hospital, medical or dental service,

Ê to pay more than the remaining deductible and coinsurance, if any, based upon the rates established by the primary insurer for its payment of that provider.

     (Added to NAC by Comm’r of Insurance, eff. 12-15-94)

PROVIDERS OF MEDICAL CARE

     NAC 695C.190  Requirements for agreement between provider and organization. (NRS 679B.130, 695C.275)  Each agreement between a provider and an organization must:

     1.  Adequately and completely describe the responsibilities of the provider and organization under the agreement.

     2.  Specify that the provider releases the enrollee from liability for the cost of services rendered pursuant to the organization’s health care plan except for any nominal payment made by the enrollee or for a service not covered under the evidence of coverage.

     3.  Be effective for not less than 1 year, subject to any right of termination stated in the agreement.

     4.  Require the provider to participate in the program to assure the quality of health care provided to enrollees by the organization through its providers.

     5.  Require the provider to provide all medically necessary services required by the evidence of coverage and the agreement to each enrollee for the period for which a premium has been paid to the organization.

     6.  Require the provider to give evidence of a contract of insurance against loss resulting from injuries resulting to third persons from the practice of his or her profession or a reasonable substitute for it as determined by the organization. The organization may require the provider to indemnify the organization for any liability resulting from the health care services rendered by the provider.

     7.  Require a provider who is a physician to transfer or otherwise arrange for the maintenance of the records of enrollees who are his or her patients if the provider leaves the panel of physicians associated with the organization.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86)

     NAC 695C.195  Per capita payments. (NRS 679B.130, 695C.275)

     1.  An agreement between a primary physician or delivery system intermediary and an organization may provide for per capita payments. If an agreement provides for per capita payments, such payments must be:

     (a) Paid in advance without regard to the time services are rendered or the extent of those services; and

     (b) Based upon an actuarial computation of the expected cost of those services.

     2.  The per capita payment:

     (a) May be reduced by the amount withheld pursuant to the agreement between the provider and organization as an incentive for the effective use of health care services.

     (b) May not reflect any payment made by an enrollee to a physician in accordance with the schedule filed with and approved by the Division.

     3.  This section does not prohibit the organization and physician or delivery system intermediary from agreeing to prospective or retroactive adjustments of the per capital payment which reflect an increase in the number of enrollees or additional services tendered by the physician or delivery system intermediary.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A by R129-96, 10-29-97; R194-99, 1-27-2000)

     NAC 695C.205  Restriction of choice of primary physician or other provider. (NRS 679B.130, 695C.275)  Any organization may restrict the enrollee’s or subscriber’s choice of a primary physician or other provider to those in a preselected group specified in its evidence of coverage or in a list or addendum to that evidence of coverage.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86)

     NAC 695C.215  Cost sharing. (NRS 679B.130, 695C.275)

     1.  An organization may establish schedules for cost sharing between an enrollee and the organization. For a benefit provided pursuant to a health care plan by a provider who is under contract with the organization to provide services on a preferred basis, commonly referred to as a “preferred” or “in-network” benefit, cost sharing may be not more than 50 percent of the usual and customary charges for providing any single service or supplying an item to an enrollee, but in no case more than 50 percent of the maximum benefits provided by the evidence of coverage for such service or item, after any applicable deductible has been met.

     2.  The amount of the cost sharing listed in the schedule given to the enrollee and submitted to the Division for approval must be:

     (a) Stated in dollars; or

     (b) Expressed as a percentage of the cost of the service or the item supplied.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R148-99, 1-27-2000; R180-12, 2-20-2013)

ADMINISTRATION OF ORGANIZATION

     NAC 695C.217  Approval of contract for marketing, enrollment, administration or health care services; effect of agreement. (NRS 679B.130, 695C.275)

     1.  Any organization contracting with a third party for services for marketing, enrollment, administration or health care services shall submit a copy of the contract to the Division for its review and approval.

     2.  The Division will consider the contract to be an agreement by the third party contracting with the organization to:

     (a) Submit to the jurisdiction of the Division for its review of the contract; and

     (b) Authorize the Division to examine that person concerning his or her duties under the contract to the organization and the payment and handling of money pursuant to the contract.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R129-96, 10-29-97)

     NAC 695C.220  Enrollment, cancellation and termination. (NRS 679B.130, 695C.275)

     1.  The period of open enrollment to allow eligible persons to become enrolled must be:

     (a) For any individual contract, at least 30 days per year;

     (b) For any group contract, at least 30 days per year; and

     (c) For any member of a group, a period set by the agreement between the organization and the subscriber but not less than 15 days per year.

     2.  An organization may cancel or terminate an enrollee only for cause as described in the evidence of coverage. The termination or cancellation may not take effect until 30 days after written notice is given to the enrollee.

     [Comm’r of Insurance, LH-4 § VIII, eff. 7-1-74] — (NAC A 6-11-86)

     NAC 695C.230  System for resolving complaints of enrollees of health maintenance organizations: Requirements for approval. (NRS 679B.130, 695C.260)

     1.  To obtain approval of a system for resolving complaints of enrollees concerning health care services covered by a health maintenance organization as required pursuant to NRS 695C.260 and 695G.200, the health maintenance organization must submit to the Division:

     (a) The name and title of the employee responsible for the system;

     (b) A description of the procedure used to notify an enrollee of the decision regarding his or her complaint; and

     (c) A copy of the explanation of rights and procedures which is to be provided to an enrollee pursuant to NRS 695C.260 and 695G.230.

     2.  A health maintenance organization may not delegate the responsibility for the operation of a system to resolve complaints to a delivery system intermediary.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R129-96, 10-29-97; R132-98, 3-30-99; R148-99, 1-27-2000)

     NAC 695C.235  System for resolving complaints of enrollees of health maintenance organizations: Annual report. (NRS 679B.130, 695C.260)

     1.  A health maintenance organization shall submit its annual report regarding its system for resolving complaints as required pursuant to NRS 695C.260 and 695G.220 on or before June 1 of each year. The health maintenance organization shall retain a copy of the annual report for at least 3 years or until the next examination conducted by the Division, whichever is longer.

     2.  The health maintenance organization is not required to include in the annual report information concerning an oral inquiry by an enrollee relating to a misunderstanding or miscommunication if the misunderstanding or miscommunication was resolved within 1 working day after the inquiry was made. If the misunderstanding or miscommunication was not resolved within 1 working day, the health maintenance organization shall report it as a complaint in the annual report.

     (Added to NAC by Comm’r of Insurance by R132-98, eff. 3-30-99; A by R148-99, 1-27-2000; R008-02, 5-23-2002)

     NAC 695C.240  Health maintenance organization: Joint board on consumer satisfaction. (NRS 679B.130)  A health maintenance organization shall notify the Division of the names and addresses of enrollees nominated to its joint board on consumer satisfaction within 6 months after the health maintenance organization first enrolls persons in its health care plan.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92; R148-99, 1-27-2000)

     NAC 695C.250  Records: Segregation from records of related corporation. (NRS 679B.130, 695C.275)  The records of an organization holding a certificate of authority in Nevada must be segregated from the records of any subsidiary or related corporation and treated as separate corporate documents.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86)

     NAC 695C.260  Records: Retention. (NRS 679B.130, 695C.275)

     1.  The organization shall retain indefinitely the minutes of the meetings of its governing body, any advisory panel and the joint board on consumer satisfaction by microfilm or any other means.

     2.  An organization shall retain for 3 years or until the next examination of the organization conducted by the Division a copy of all:

     (a) Published material used to market the organization; and

     (b) Scripts used for advertising on radio or television.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 5-27-92)

     NAC 695C.270  Reports and financial statements; quarterly report of domestic health maintenance organization; extension of time for filing report or statement; disciplinary action for failure to file report or statement. (NRS 679B.130, 695C.210, 695C.275)

     1.  As a condition of doing business in this State, each health maintenance organization must file with the Commissioner an annual report required by NRS 695C.210 that:

     (a) Conforms to the format prescribed by the National Association of Insurance Commissioners in the Annual and Quarterly Statement Instructions for Health and the Accounting Practices and Procedures Manual, which have been adopted by reference in NAC 679B.033;

     (b) Contains exhibits and schedules that follow the specifications developed by the National Association of Insurance Commissioners; and

     (c) Contains any other information relating to the organization required by the Commissioner.

     2.  Information from the annual report of the organization must be filed:

     (a) Pursuant to the specifications adopted by the National Association of Insurance Commissioners for filing information in an electronic format;

     (b) At the central office of the National Association of Insurance Commissioners, 1100 Walnut Street, Suite 1500, Kansas City, Missouri 64106-2197; and

     (c) On or before March 1 of each year.

     3.  If a foreign or alien health maintenance organization files a report in an electronic format with the National Association of Insurance Commissioners, that report will be deemed to have been filed with the Commissioner if:

     (a) The foreign or alien health maintenance organization submits an affidavit, a jurat page or a copy of the jurat page to the Commissioner indicating that the report has been so filed. If the organization submits a jurat page, the jurat page must:

          (1) Conform to the format prescribed by the National Association of Insurance Commissioners in the Annual and Quarterly Statement Instructions for Health, which has been adopted by reference in NAC 679B.033; and

          (2) Be executed by a notarial officer pursuant to NRS 240.1655 and 240.167.

     (b) The affidavit, jurat page or copy of the jurat page is accompanied by the applicable fees set forth in NRS 680B.010.

     4.  An annual report required by NRS 695C.210 to be filed with the Commissioner by an organization must be on the current version of the Annual and Quarterly Statement Blanks for Health adopted by the National Association of Insurance Commissioners, which has been adopted by reference in NAC 679B.033. Each organization shall, in preparing the report, follow the Annual and Quarterly Statement Instructions for Health adopted by the National Association of Insurance Commissioners, which accompanies the Annual and Quarterly Statement Blanks for Health.

     5.  Each organization shall include in its annual report the number and amount of claims of malpractice initiated against it during that year. The report must include claims made with or without legal process and the disposition, if any, of each claim.

     6.  Each organization shall furnish a copy of any annual report it distributes to its enrollees to the Division 30 days before that distribution with a notice of its intent to distribute it.

     7.  If an organization is required by federal law to submit quarterly reports to the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services, it shall submit copies of those reports to the Division.

     8.  If necessary to determine the financial condition of a foreign or alien health maintenance organization or the fulfillment of contractual obligations or compliance with law by a foreign or alien health maintenance organization, the Commissioner may require the foreign or alien health maintenance organization to file a financial report more frequently than annually. Such a report must be:

     (a) Filed on the current form adopted by the National Association of Insurance Commissioners for the type of organization filing;

     (b) Completed in accordance with the current instruction manual for the type of organization filing; and

     (c) Filed with the National Association of Insurance Commissioners in an electronic format.

     9.  Each domestic health maintenance organization shall file a quarterly report with the Commissioner. A quarterly report must be:

     (a) Filed on the current form adopted by the National Association of Insurance Commissioners for the type of organization filing;

     (b) Completed in accordance with the current instruction manual for the type of organization filing; and

     (c) Filed with the National Association of Insurance Commissioners in an electronic format.

     10.  For a health maintenance organization, the audited financial statement of the organization filed pursuant to subsection 3 of NRS 695C.210 is a separate document from the annual statement required to be filed pursuant to paragraph (a) of subsection 2 of NRS 695C.210. For a provider-sponsored organization, the audited financial statement of the organization filed pursuant to subsection 3 of NAC 695C.360 is a separate document from the annual statement required to be filed pursuant to paragraph (a) of subsection 2 of NAC 695C.360. The audited financial statement filed pursuant to subsection 3 of NRS 695C.210 or subsection 3 of NAC 695C.360 must be:

     (a) Filed for each individual organization within 120 days after the end of its fiscal year; and

     (b) Filed pursuant to the specifications and instructions adopted by the National Association of Insurance Commissioners which are included in the Annual and Quarterly Statement Instructions for Health, which have been adopted by reference in NAC 679B.033.

Ê Consolidated statements for organizations that are members of an insurance holding company system are not acceptable.

     11.  The Commissioner will, if appropriate, take disciplinary action pursuant to NRS 695C.340 or 695C.350 or NAC 695C.1286 or 695C.1288 against an organization which fails to file its annual financial reports or statements on the prescribed forms, in the prescribed format or by the prescribed date.

     12.  The Commissioner will grant, for good cause and upon advance written request, an extension for filing an annual report or statement.

     13.  As used in this section, “jurat page” means a written declaration by a notarial officer that the signer of a document signed the document in the presence of the notarial officer and swore to or affirmed that the statements in the document are true.

     (Added to NAC by Comm’r of Insurance, eff. 6-11-86; A 12-9-91; 5-27-92; R148-99, 1-27-2000; R248-03, 11-12-2004; R089-17, 5-16-2018)

     NAC 695C.275  Quality and performance indicators to be included in report of health maintenance organization. (NRS 439.200, 679B.130, 695C.210)

     1.  On or before March 1 of each year, each health maintenance organization which receives a certificate of authority shall file with the Commissioner the quality and performance indicators selected by the Commissioner for the immediately preceding calendar year. The Commissioner will select the indicators from the reporting set data domains set forth in Technical Specifications for Health Plans, Healthcare Effectiveness Data and Information Set (HEDIS), volume 2, in the form most recently published by the National Committee for Quality Assurance (NCQA), unless the Commissioner gives notice that the most recent revision is not suitable for this State pursuant to subsection 2. Volume 2 of HEDIS may be obtained from the National Committee for Quality Assurance, NCQA, 1100 13th Street N.W., Washington, D.C. 20005, for the price of $355 plus $33 for shipping and handling or by ordering via telephone at (888) 275-7585 or on the Internet at http://store.ncqa.org/.

     2.  The Commissioner will review each revision of the reporting set data domains set forth in Technical Specifications for Health Plans, Healthcare Effectiveness Data and Information Set (HEDIS), volume 2, to ensure their suitability for this State.

     (Added to NAC by Bd. of Health, eff. 11-1-95; A by R058-99, 11-4-99; A by Comm’r of Insurance by R148-99, 1-27-2000; R248-03, 11-12-2004; R106-08, 9-18-2008; R089-17, 5-16-2018)

     NAC 695C.285  Limitation on frequency of increases in premium rates; exceptions. (NRS 679B.130, 695C.275)

     1.  Except as otherwise provided in this section, an organization shall not increase the premium rates for a group health care plan more frequently than every 6 months unless the increase in the premium rates is being made because:

     (a) An employer has requested a change in its group health care plan;

     (b) There has been a change in the number of employees covered by an employer that would affect the insurance premium rate of the employer; or

     (c) There has been a change in federal or state law which affects the cost of providing services under the group health care plan.

     2.  If an organization issues a group health care plan to a class of employers that consists solely of bona fide associations and uses a common date of renewal for that class, an increase in the premium rates for that class does not violate the provisions of subsection 1 solely because at least one but not all the members of that class will have an increase in premium rates more frequently than every 6 months.

     (Added to NAC by Comm’r of Insurance by R009-02, eff. 5-23-2002; A by R009-02, 7-11-2002)

     NAC 695C.290  Filing, contents and delivery of disclosure summarizing coverage by health maintenance organization. (NRS 679B.130, 695C.193)

     1.  Each health maintenance organization shall file with the Commissioner, for his or her approval, a disclosure summarizing the coverage provided by a group health care plan offered by the health maintenance organization.

     2.  The disclosure must:

     (a) Be in at least 10-point type;

     (b) Include the name, address and telephone number of the health maintenance organization;

     (c) Include the name, address and telephone number of the agent, broker and administrator, if applicable;

     (d) Include a statement describing the principal benefits and the type of coverage being provided;

     (e) Include a description of any provision of the health care plan which significantly excludes, eliminates, reduces or in any other manner operates to limit the payment of the benefits;

     (f) Include a statement concerning the renewal provisions of the health care plan; and

     (g) Define the term “usual and customary” or any similar term used in the plan.

     3.  The agent for the organization, the organization after a response to a direct-response solicitation or the broker representing the group policyholder shall deliver the approved disclosure summary to the proposed group policyholder as provided in NRS 695C.195.

     (Added to NAC by Comm’r of Insurance, eff. 2-21-90)

     NAC 695C.295  Disclosures in advertising and sales materials; inclusion of certain information in health care plan. (NRS 679B.130, 695C.193)

     1.  As part of the disclosure required by NRS 695C.193, an organization shall disclose in the advertising and sales materials that the organization provides to employers:

     (a) The term of the contract applicable to the premium rates;

     (b) A general description of the underwriting factors that the organization used to calculate premiums; and

     (c) A description of the class of business in which the employer is included.

     2.  An organization shall include a copy of the information described in paragraph (c) of subsection 1 in the health care plan that the organization provides to an enrollee.

     (Added to NAC by Comm’r of Insurance by R009-02, eff. 5-23-2002; A by R009-02, 7-11-2002)

REVISER’S NOTE.

      The regulation of the Commissioner of Insurance filed with the Secretary of State on July 11, 2002 (LCB File No. R009-02), the source of this section (section 19 of the regulation), contains the following provision not included in NAC:

      “Sec. 20.  Sections 6, 13, 16 and 19 of this regulation [NAC 689B.205, 689C.172, 695B.035 and 695C.295] apply to any disclosures given for health insurance, group contracts for hospital or medical service and group health care plans offered by insurers, nonprofit corporations for hospital, medical or dental services and health maintenance organizations that are offered or issued on or after July 10, 2002.”

 

EXAMINATIONS

     NAC 695C.300  Requirements for conducting examination. (NRS 679B.130, 695C.275, 695C.310)  Each examination of an organization, including one made pursuant to NRS 695C.310 or NAC 695C.325, must be conducted in accordance with the requirements found in the handbooks and manuals adopted by reference in NAC 679B.033 and the provisions of NRS 679B.250 to 679B.300, inclusive.

     (Added to NAC by Comm’r of Insurance, eff. 12-9-91; A by R148-99, 1-27-2000)

     NAC 695C.310  Health maintenance organization: Review of examination of organization required; approved examiners; organization to cooperate during examination. (NRS 439.200, 679B.130, 695C.310)

     1.  As part of the examination of the quality of health care services for a health maintenance organization required pursuant to NRS 695C.310, the State Board of Health will review or cause the Division of Public and Behavioral Health to review and report the results of an examination of the organization conducted by:

     (a) The Federal Government for federal qualification as a health maintenance organization;

     (b) A group which is nationally recognized to provide accreditation of health maintenance organizations; or

     (c) A person approved by the Board pursuant to subsection 2.

     2.  The State Board of Health shall maintain a list of not less than two persons whom the Board has approved to assist the Board in conducting the examination of a health maintenance organization.

     3.  During an examination, the health maintenance organization shall provide such information as the Board or Division of Public and Behavioral Health deems necessary and shall allow the Board or the Division of Public and Behavioral Health to review any relevant books, records and operations necessary at the place of business of the health maintenance organization.

     (Added to NAC by Bd. of Health, eff. 11-1-95; A by Comm’r of Insurance by R148-99, 1-27-2000)

     NAC 695C.320  Health maintenance organization: Division of Public and Behavioral Health to notify organization of its findings; objections to findings; dispute resolution; distribution of proposed findings. (NRS 439.200, 679B.130, 695C.310)

     1.  Not less than 90 days after an examination is completed, the Division of Public and Behavioral Health shall mail to the health maintenance organization by certified mail, return receipt requested, the proposed findings of its review. The proposed findings must include, without limitation, any deficiencies discovered within the health maintenance organization and its proposed recommendations to be given by the State Board of Health to the Commissioner regarding the certification of the health maintenance organization.

     2.  The health maintenance organization may mail to the Division of Public and Behavioral Health any written objections to the proposed findings of the examination not later than 30 days after the date upon which the proposed findings were mailed pursuant to subsection 1.

     3.  If the health maintenance organization objects to the proposed findings, the Division of Public and Behavioral Health shall attempt to resolve the dispute. If the dispute is not resolved within 30 days from the date upon which the objections were mailed pursuant to subsection 2, the Division of Public and Behavioral Health shall inform the Board of the dispute. The Board will then provide for a hearing as soon as practicable. A written copy of any final decision of a hearing must be sent to the Commissioner.

     4.  If the health maintenance organization does not object to the proposed findings of the Division of Public and Behavioral Health or if any dispute has been resolved, the Division of Public and Behavioral Health shall provide its proposed findings to the Board. After reviewing the proposed findings, the Board will mail its proposed findings and recommendations to the Commissioner.

     (Added to NAC by Bd. of Health, eff. 11-1-95; A by Comm’r of Insurance by R148-99, 1-27-2000)

     NAC 695C.325  Provider-sponsored organization: Frequency of examinations; submission of records; acceptance of alternate report. (NRS 679B.130, 695C.275)

     1.  The Commissioner will make an examination of the affairs of any provider-sponsored organization and providers with whom such provider-sponsored organization has contracts, agreements or other arrangements pursuant to its health care plan as often as the Commissioner deems it necessary for the protection of the interests of the people of this State. An examination will be made not less frequently than once every 3 years.

     2.  Every provider-sponsored organization and provider shall submit its books and records relating to the health care plan to an examination made pursuant to subsection 1 and in every way facilitate the examination. Medical records of natural persons and records of physicians providing service pursuant to a contract to the provider-sponsored organization are not subject to such examination, although the records are subject to subpoena upon a showing of good cause. For the purpose of examinations, the Commissioner may administer oaths to, and examine the officers and agents of, the provider-sponsored organization and the principals of such providers concerning their business.

     3.  The expenses of examinations pursuant to this section must be assessed against the provider-sponsored organization being examined and remitted to the Commissioner.

     4.  In lieu of such examination, the Commissioner may accept the report of an examination made by the insurance commissioner or the state board of health of another state.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.330  Provider-sponsored organization: Determination of financial condition. (NRS 679B.130, 695C.275)

     1.  To determine its financial condition, fulfillment of its contractual obligations and compliance with law, the Commissioner will, as often as he or she deems advisable, examine the affairs, transactions, accounts, records and assets of a provider-sponsored organization and of any person as to any matter relevant to the financial affairs of the provider-sponsored organization or to the examination. Except as otherwise provided in the Nevada Insurance Code, the Commissioner will examine each provider-sponsored organization at least once every 3 years.

     2.  The Commissioner will examine each provider-sponsored organization applying for an initial certificate of authority.

     3.  In lieu of making his or her own examination, the Commissioner may, in his or her discretion, accept a full report of the last recent examination of a foreign or alien provider-sponsored organization, certified to by the supervisory officer of insurance of another state.

     4.  To the extent that it is practical, the examination of a foreign or alien provider-sponsored organization must be made in cooperation with the insurance supervisory officers of other states in which the provider-sponsored organization transacts business.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.335  Provider-sponsored organization: Procedure; appointment of examiner; maintenance and use of records. (NRS 679B.130, 695C.275)

     1.  If the Commissioner examines a provider-sponsored organization pursuant to NAC 695C.330, he or she will designate one or more examiners and instruct them as to the scope of the examination. The examiner shall, upon demand, exhibit his or her official credentials to the provider-sponsored organization being examined.

     2.  The Commissioner will conduct each examination in an expeditious, fair and impartial manner.

     3.  The Commissioner, or the examiner if authorized in writing by the Commissioner, may administer oaths and examine under oath any person concerning any matter relevant to the examination.

     4.  Each provider-sponsored organization and its officers, attorneys, employees, agents and representatives shall make available to the Commissioner or the examiners the accounts, records, documents, files, information, assets and matters of the provider-sponsored organization in his or her possession or control relating to the subject of the examination and shall facilitate the examination.

     5.  If the Commissioner or examiner finds any accounts or records to be inadequate or inadequately kept or posted, he or she will so notify the provider-sponsored organization and give the provider-sponsored organization a reasonable opportunity to reconstruct, rewrite, post or balance the account or record. If the provider-sponsored organization fails to maintain, complete or correct the records or accounting after the Commissioner or examiner has given the provider-sponsored organization written notice and a reasonable opportunity to do so, the Commissioner may employ experts to reconstruct, rewrite, post or balance the account or record at the expense of the provider-sponsored organization being examined.

     6.  The Commissioner or an examiner will not remove any record, account, document, file or other property of the provider-sponsored organization being examined from the office or place of business of the provider-sponsored organization unless the Commissioner or examiner has the written consent of an officer of the provider-sponsored organization before the removal or pursuant to an order of a court. This provision does not prohibit the Commissioner or examiner from making or removing copies or abstracts of a record, account, document or file.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.340  Provider-sponsored organization: Payment of expenses. (NRS 679B.130, 695C.275)

     1.  The provider-sponsored organization being examined shall pay the expense of an examination. The expenses to be paid include only the reasonable and proper travel and lodging expenses of the Commissioner and the examiners and assistants, including, without limitation, expert assistance, reasonable compensation to the examiners and assistants and incidental expenses as necessarily incurred in the examination. The Commissioner will consider the scales and limitations recommended by the National Association of Insurance Commissioners regarding the expense and compensation for an examination.

     2.  The provider-sponsored organization shall promptly pay to the Commissioner the expenses of the examination upon presentation by the Commissioner of a reasonably detailed written statement thereof.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.345  Provider-sponsored organization: Statutory procedures required for examination and hearing. (NRS 679B.130, 695C.275)  The Commissioner will use the procedures required by:

     1.  NRS 679B.230 to 679B.290, inclusive, when conducting an examination of a provider-sponsored organization.

     2.  NRS 679B.310 to 679B.370, inclusive, when conducting a hearing involving a provider-sponsored organization.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

MISCELLANEOUS PROVISIONS FOR PROVIDER-SPONSORED ORGANIZATIONS

     NAC 695C.350  Notice and approval required for modification of operations. (NRS 679B.130, 695C.275)  A provider-sponsored organization shall, unless otherwise provided for in this chapter, file a notice with the Commissioner before any material modification of the operations described in the information required by NAC 695C.115. The provider-sponsored organization shall submit a copy of its proposed modification to the Commissioner. The Commissioner may, as a condition of approval for the proposed modification by the provider-sponsored organization, require the provider-sponsored organization to increase the amount of reserves, deposits, bonds or minimum net worth it is required to maintain. If the Commissioner does not disapprove the modification within 90 days after filing of the notice, the modification is deemed approved.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.355  Accounting principles required for certain reports and transactions. (NRS 679B.130, 695C.275)  A provider-sponsored organization shall use accounting principles that are recognized by the laws of this State or approved by the Commissioner for:

     1.  All financial reports;

     2.  The accounting of investments and deposits; and

     3.  Transactions between affiliates and holding companies.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.360  Annual report of financial condition and financial statement; administrative penalty for failure to file report or statement; request for extension. (NRS 679B.130, 695C.275)

     1.  A provider-sponsored organization shall file with the Commissioner on or before March 1 of each year a report showing its financial condition on the last day of the preceding calendar year. The report must be verified by at least two principal officers of the provider-sponsored organization.

     2.  The report must be on forms prescribed by the Commissioner and must include:

     (a) A financial statement of the provider-sponsored organization, including its balance sheet and receipts and disbursements for the preceding calendar year;

     (b) Any material changes in the information submitted pursuant to NAC 695C.115;

     (c) The number of persons enrolled during the year, the number of enrollees as of the end of the year, the number of enrollments terminated during the year and, if requested by the Commissioner, a compilation of the reasons for such terminations;

     (d) The number and amount of malpractice claims initiated against the provider-sponsored organization and any of the providers used by it during the year broken down into claims with and without form of legal process and the disposition, if any, of each such claim, if requested by the Commissioner; and

     (e) Such other information relating to the performance of the provider-sponsored organization as is necessary to enable the Commissioner to carry out his or her duties pursuant to this chapter.

     3.  A provider-sponsored organization shall file with the Commissioner annually an audited financial statement of the provider-sponsored organization prepared by an independent certified public accountant. The statement must cover the preceding 12-month period and must be filed with the Commissioner within 120 days after the end of the fiscal year of the provider-sponsored organization. Upon written request, the Commissioner may grant a 30-day extension.

     4.  If a provider-sponsored organization fails to file timely the report or financial statement required by this section, it shall pay an administrative penalty of $100 per day until the report or statement is filed, except that the total penalty must not exceed $3,000. The Attorney General shall recover the penalty in the name of the State of Nevada.

     5.  The Commissioner may grant a reasonable extension of time for filing the report or financial statement required by this section if the request for an extension is submitted in writing and shows good cause.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.365  Fees. (NRS 679B.130, 695C.275)

     1.  A provider-sponsored organization subject to this chapter shall pay to the Commissioner the following fees:

     (a) For filing an application for a certificate of authority, $2,450.

     (b) For issuance of a certificate of authority, $250.

     (c) For an amendment to a certificate of authority, $100.

     (d) For the renewal of a certificate of authority, $2,450.

     (e) For filing each annual report, $25.

     (f) All applicable fees required pursuant to NRS 680C.110.

     2.  At the time of filing the annual report, the provider-sponsored organization shall forward to the Department of Taxation the tax and any penalty for nonpayment or delinquent payment of the tax in accordance with the provisions of chapter 680B of NRS.

     3.  All fees paid pursuant to this section shall be deemed earned when paid and may not be refunded.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000; A by R103-09, 1-28-2010)

     NAC 695C.370  Availability of information for inspection. (NRS 679B.130, 695C.275)  A provider-sponsored organization shall have available for inspection the following information:

     1.  A current statement of financial condition including a balance sheet and summary of receipts and disbursements;

     2.  A description of the organizational structure and operation of the provider-sponsored organization and a summary of any material changes since the issuance of the last report;

     3.  A description of services and information as to where and how to secure the services; and

     4.  A clear and understandable description of the method of the provider-sponsored organization for resolving enrollee complaints.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.375  Prohibited practices. (NRS 679B.130, 695C.275)

     1.  No provider-sponsored organization or representative thereof may cause or knowingly permit the use of advertising or solicitation which is untrue or misleading. For purposes of this chapter:

     (a) A statement or item of information shall be deemed to be untrue if it does not conform to fact in any respect which is or may be significant to an enrollee of, or person considering enrollment in, a health care plan.

     (b) A statement or item of information shall be deemed to be misleading, whether or not it may be literally untrue if, in the total context in which such statement is made or such item of information is communicated, such statement or item of information may be reasonably understood by a reasonable person not possessing special knowledge regarding health care coverage as indicating any benefit or advantage or the absence of any exclusion, limitation or disadvantage of possible significance to an enrollee of, or person considering enrollment in, a health care plan if such benefit or advantage or absence of limitation, exclusion or disadvantage does not in fact exist.

     2.  NRS 686A.010 to 686A.310, inclusive, must be construed to apply to provider-sponsored organizations and health care plans except to the extent that the nature of provider-sponsored organizations and health care plans render the sections therein clearly inappropriate.

     3.  An enrollee may not be cancelled or not renewed except for the failure to pay the charge for such coverage or for cause as determined in the master contract.

     4.  No provider-sponsored organization, unless licensed as an insurer, may use in its name, contracts or literature any of the words “insurance,” “casualty,” “surety,” “mutual” or any other words descriptive of the insurance, casualty or surety business or deceptively similar to the name or description of any insurance or surety corporation doing business in this State.

     5.  No person not certificated pursuant to this chapter shall use in its name, contracts or literature the phrase “provider-sponsored organization” or the initials “PSO.”

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

     NAC 695C.380  Rehabilitation, liquidation or conservation. (NRS 679B.130, 695C.275)  Any rehabilitation, liquidation or conservation of a provider-sponsored organization shall be deemed to be the rehabilitation, liquidation or conservation of an insurance company and will be conducted under the supervision of the Commissioner pursuant to the law governing the rehabilitation, liquidation, or conservation of insurance companies.

     (Added to NAC by Comm’r of Insurance by R148-99, eff. 1-27-2000)

QUALITY ASSURANCE PROGRAM

     NAC 695C.400  Requirements; written description of action plan; staff; periodic review of program. (NRS 439.200)

     1.  Each organization shall establish a quality assurance program which consists of a method for analyzing the outcomes of health care, peer review, the collection of health care data and appropriate recommendations for remedial action.

     2.  The program must be designed to direct, evaluate and monitor the effectiveness of the health care provided by the organization.

     3.  The organization shall maintain a written description of its program which describes the specific actions that will be taken to ensure that the quality of health care provided to members is adequate and the personnel responsible for such actions. The actions may consist of a particular study or methodology for determining the quality of health care.

     4.  The organization shall inform each provider of health care of the organization of the manner in which the quality assurance program operates.

     5.  The organization shall provide the necessary staff to implement the program and evaluate the effectiveness of the program.

     6.  The organization is responsible for all activities conducted pursuant to the quality assurance program regardless of whether the organization performs the activity or the activity is delegated to another entity.

     7.  Not less than annually, the organization shall review the continuity and effectiveness of the program and any proposed findings of the quality assurance committee. The organization shall take such actions as necessary to improve the program.

     (Added to NAC by Bd. of Health, eff. 11-1-95)

     NAC 695C.410  Quality assurance committee: Appointment of members; staff; duties. (NRS 439.200)

     1.  The program established pursuant to NAC 695C.400 must include a quality assurance committee which is directed by either a licensed physician or dentist, as appropriate. The organization shall establish written guidelines for the manner in which members are appointed. The organization shall appoint members pursuant to those guidelines and provide adequate staff to assist the committee.

     2.  The members of the committee must be selected from the health care providers with whom the organization has contracted to provide services to members. The members must include primary care physicians, physicians who provide commonly used specialized care and may include other persons who provide ancillary health care services.

     3.  The committee shall:

     (a) Routinely select and review appropriate medical records of members and other data related to the quality of health care provided by health care providers.

     (b) Review the clinical processes used by providers of health care in providing services.

     (c) Identify any problems related to the quality of health care.

     (d) Advise health care providers regarding issues related to quality of care, performance of services, outcomes of services and provide recommendations for improving the quality of care when necessary.

     (e) Develop a methodology for monitoring and evaluating the quality of health care provided to members. The methodology must include an analysis of the quality of care provided for high volume common medical problems and less common higher risk medical problems.

     (f) Evaluate the impact on the quality of care caused by incentives offered to providers of health care by the organization to provide or not to provide certain services.

     (g) Interpret data collected pursuant to NAC 695C.420 for use by the organization.

     (Added to NAC by Bd. of Health, eff. 11-1-95)

     NAC 695C.420  System for collection and maintenance of information related to health care services. (NRS 439.200)

     1.  The quality assurance program must include a system to collect and maintain information related to the health care services received by members.

     2.  The system must have the capacity to aggregate data in a manner which will assist the committee in identifying patterns of substandard care and any particular provider who is providing substandard care. The information collected must include any complaints filed by members or other providers, adverse outcomes to treatment or services, inappropriate use of services and underutilization of services.

     (Added to NAC by Bd. of Health, eff. 11-1-95)

     NAC 695C.430  Written guidelines for remedial action; final determinations regarding quality of care. (NRS 439.200)

     1.  The quality assurance program must include written guidelines which set forth the procedures for remedial action when problems related to quality of care are identified.

     2.  The guidelines must provide:

     (a) A list of the types of problems which require remedial action;

     (b) The specific remedial action that may be required;

     (c) The time within which providers of health care must comply with such remedial action;

     (d) The action that the organization will take if the remedial action is not implemented when required; and

     (e) The procedures used to assess the effectiveness of any remedial action.

     3.  The guidelines must also identify a person who is responsible for making any final determinations regarding the quality of care and set forth procedures for terminating an affiliation with a physician or other health care provider who does not meet the established standard of care.

     (Added to NAC by Bd. of Health, eff. 11-1-95)

DELIVERY SYSTEM INTERMEDIARY

     NAC 695C.500  Compliance with statutory provisions. (NRS 679B.130, 695C.275)  An organization shall ensure that a delivery system intermediary complies with the applicable provisions of title 57 of NRS relating to any services performed on behalf of the organization.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.505  Required provisions of health service contracts. (NRS 679B.130, 695C.275)  Each health service contract submitted to the Commissioner pursuant to NAC 695C.510 must contain a provision which:

     1.  Requires the delivery system intermediary to provide to the organization a written report, at least quarterly, which identifies the total payments made or owed to its providers in sufficient detail to enable the organization and the Commissioner to determine whether the payments have been made in a timely manner and in compliance with the applicable provisions of NRS.

     2.  Requires the organization to review the reports of the delivery system intermediary provided pursuant to subsection 1.

     3.  Authorizes the organization, upon reasonable prior notice, to audit, inspect and copy the delivery system intermediary’s books, records and any other evidence of its operations which, in the discretion of the organization, are relevant to the delivery system intermediary’s obligations pursuant to the health service contract.

     4.  Authorizes the Commissioner, upon reasonable prior notice, to audit, inspect and copy the delivery system intermediary’s books, records and any other evidence of its operations to determine whether the delivery system intermediary has complied with the applicable provisions of NRS or any regulations adopted pursuant thereto.

     5.  Requires the delivery system intermediary to maintain working capital in the form of cash or equivalent liquid assets in an amount equal to at least:

     (a) Five hundred thousand dollars; or

     (b) The operating expenses paid for 2 months calculated by using the monthly average of the operating expenses for the prior 6 months,

Ê whichever is less. As used in this subsection, “operating expenses” means the expenses of the delivery system intermediary, except money paid or owed to providers for health services provided pursuant to the health service contract.

     6.  Requires the organization to assume financial responsibility for any claims which are:

     (a) Presented for payment to the delivery system intermediary by its providers for covered health care services; and

     (b) Not paid by the delivery system intermediary as provided by law and the contract between the delivery system intermediary and the organization.

     7.  Requires that each contract with a subscriber must be entered into directly with the organization and not with the delivery system intermediary.

     8.  Sets forth the responsibilities which the delivery system intermediary will assume and requires that the delivery system intermediary comply with requirements of the quality assurance program established by the organization pursuant to NAC 695C.400.

     9.  Requires the organization to review, not less than quarterly, the delivery system intermediary’s compliance with the provisions of the contract.

     10.  If the delivery system intermediary provides health care services on behalf of more than one entity, requires the delivery system intermediary to maintain separate records for each entity.

     11.  Authorizes the organization to terminate its relationship with any provider of the delivery system intermediary with appropriate notice as specified in the health services contract.

     12.  Requires that each contract with a provider must be assigned to the organization if the delivery system intermediary fails to pay for covered or authorized health care services. The provision is binding on the provider until the provider renegotiates a contract with the organization.

     13.  Prohibits a health care provider who has a financial interest of more than 10 percent in a delivery system intermediary from participating on a utilization review committee or taking any action to change an authorization made by the utilization review committee or an authorized physician.

     14.  Requires the delivery system intermediary to provide the organization, the Commissioner and the State Board of Health with a list of the names of those persons who have a financial interest in the delivery system intermediary and the amount of each person’s financial interest. Any change in the financial interests of the delivery system intermediary must be reported to the organization, the Commissioner and the State Board of Health within 10 working days after the change.

     15.  Prohibits a delivery system intermediary from assigning its contract to any other organization without the prior approval of the organization. The approval of the organization is subject to the filing of a material modification of operation pursuant to NRS 695C.140.

     16.  If a delivery system intermediary hires a company to manage the affairs of the delivery system intermediary, requires the delivery system intermediary or that company to provide the organization with a surety bond or deposit of cash or securities in the amount of $250,000 for the faithful performance of the obligations of the company.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.510  Health service contract to be filed with Commissioner; certain documentation to be included in contract. (NRS 679B.130, 695C.275)

     1.  An organization which enters into a health service contract with a delivery system intermediary shall file a copy of the health service contract with the Commissioner as a material modification of operations pursuant to NRS 695C.140 or NAC 695C.350.

     2.  In addition to complying with the provisions of NAC 695C.505, the contract must be signed by the organization and the delivery system intermediary and include:

     (a) All exhibits, attachments, addenda, schedules or any other documents relating to the contract; and

     (b) A statement of a qualified actuary that the contract:

          (1) Is a financially sound transaction;

          (2) Does not cause excessive payments to the delivery system intermediary;

          (3) Provides for reasonable incentives to the delivery system intermediary for the containment of costs; and

          (4) Does not substantially or unreasonably contribute to the increase in the cost of providing health care services to enrollees or subscribers.

     3.  The information required by subsection 2 is not required to include the monetary value of the services which will be provided pursuant to the health service contract, but that information must be made available to the Commissioner upon request.

     4.  As used in this section, “qualified actuary” has the meaning ascribed to it in NAC 681B.155.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97; A by R148-99, 1-27-2000)

     NAC 695C.515  Commissioner may order cancellation or renegotiation of health service contract under certain circumstances. (NRS 679B.130, 695C.275)  The Commissioner may order the immediate cancellation or renegotiation of any health service contract if he or she determines that the contract:

     1.  Provides for excessive payments for health care services;

     2.  Fails to include incentives for the containment of the costs of providing health care services to enrollees or subscribers; or

     3.  Otherwise substantially or unreasonably contributes to an increase in the cost of providing health care services to enrollees or subscribers.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.520  Conditions for paying claims or acting as agent for utilization review. (NRS 679B.130)  If a delivery system intermediary intends to pay claims or act as an agent for utilization review, the delivery system intermediary must:

     1.  Obtain the appropriate licenses required pursuant to chapter 683A of NRS; and

     2.  Provide proof to the organization that the delivery system intermediary has obtained those licenses.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.525  Provision of health care services. (NRS 679B.130)

     1.  A delivery system intermediary may employ or enter into a contract with a provider to furnish or arrange for the furnishing of health care services to the members of an organization covered under a health care plan.

     2.  Health care services provided by a delivery system intermediary must be provided primarily by providers employed by the delivery system intermediary or providers with whom the delivery system intermediary has contracted for the provision of those services.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.530  Contract for provision of health care services. (NRS 679B.130)  A contract entered into by a delivery system intermediary and a provider for the provision of health care services must:

     1.  Describe the responsibilities of the provider and the delivery system intermediary under the contract.

     2.  Release enrollees and subscribers from liability for the cost of the health care services provided pursuant to the organization’s health care plan, except for any nominal payment made by the enrollee for a service not covered under the evidence of coverage.

     3.  Require the provider to participate in a program to ensure the quality of health care provided to enrollees by the organization.

     4.  Require the provider to provide to each enrollee all medically necessary services required by the evidence of coverage and the contract for the period for which a premium has been paid to the organization.

     5.  Be effective for not less than 1 year, subject to any right of termination provided in the contract.

     6.  Require the provider to furnish evidence of a contract of insurance against loss arising from injuries to third parties resulting from the practice of his or her profession or a reasonable substitute as determined by the organization.

     7.  Require the provider to transfer or arrange for the maintenance of the records of enrollees and subscribers who are his or her patients if the provider terminates the contract with the delivery system intermediary.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.535  Organization prohibited from requiring provision of health care services for which delivery system intermediary has not contracted except under certain circumstances. (NRS 679B.130, 695C.275)

     1.  An organization shall not require a delivery system intermediary to provide any health care services which a provider of the delivery system is not required to provide.

     2.  This section does not prohibit the organization or the delivery system intermediary from entering into an agreement for the provision of such health care services if the agreement provides incentives to the delivery system intermediary for the containment of the costs of providing those health care services.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.540  Contract for evaluation of credentials of providers. (NRS 679B.130, 695C.275)

     1.  An organization may enter into a contract with a delivery system intermediary for evaluating the credentials of those providers who will provide health care services to the members of the organization. The contract must include a provision which requires the delivery system intermediary to comply with the requirements established by the organization for evaluating the credentials of providers.

     2.  The organization has the exclusive authority to reject or terminate a contract with any provider who fails to comply with requirements established by the organization pursuant to subsection 1.

     3.  The organization shall, at least annually, verify that the delivery system intermediary is in compliance with the requirements established by the organization pursuant to subsection 1.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.545  Commissioner to have access to books and records. (NRS 679B.130, 695C.275)  An organization shall take all reasonable measures to provide the Commissioner with access to the books and records of any delivery system intermediary with which it contracts for the provision of health care services, to the same extent the Commissioner is given access to the books and records of the organization pursuant to title 57 of NRS. The organization shall pay the costs incurred by the Commissioner to examine the books and records of a delivery system intermediary.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)

     NAC 695C.550  Prohibited acts. (NRS 679B.130)  A delivery system intermediary shall not:

     1.  Solicit or sell to a person or group any health care plan which provides for comprehensive health care services unless it complies with the requirements set forth in NAC 695C.150; or

     2.  Contract directly with enrollees or subscribers unless it has obtained a certificate of authority to operate pursuant to chapter 695C or 695F of NRS.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)