Minnesota Statutes
Chapter 62D — Health Maintenance Organizations
Section 62D.03 — Establishment Of Health Maintenance Organizations.

Subdivision 1. Certificate of authority required. Notwithstanding any law of this state to the contrary, any foreign or domestic corporation organized to do so or a local governmental unit may apply to the commissioner of health for a certificate of authority to establish and operate a health maintenance organization in compliance with sections 62D.01 to 62D.30. No person shall establish or operate a health maintenance organization in this state, nor sell or offer to sell, or solicit offers to purchase or receive advance or periodic consideration in conjunction with a health maintenance organization or health maintenance contract unless the organization has a certificate of authority under sections 62D.01 to 62D.30.
Subd. 2. [Repealed, 1997 c 205 s 40]
Subd. 3. Required application. The commissioner of health may require any person providing physician and hospital services with payments made in the manner set forth in section 62D.02, subdivision 4, to apply for a certificate of authority under sections 62D.01 to 62D.30. An applicant may continue to operate until the commissioner of health acts upon the application. In the event that an application is denied, the applicant shall henceforth be treated as a health maintenance organization whose certificate of authority has been revoked. Any person directed to apply for a certificate of authority shall be subject to the provisions of this subdivision.
Subd. 4. Application requirements. Each application for a certificate of authority shall be verified by an officer or authorized representative of the applicant, and shall be in a form prescribed by the commissioner of health. Each application shall include the following:
(a) a copy of the basic organizational document, if any, of the applicant and of each major participating entity; such as the articles of incorporation, or other applicable documents, and all amendments thereto;
(b) a copy of the bylaws, rules and regulations, or similar document, if any, and all amendments thereto which regulate the conduct of the affairs of the applicant and of each major participating entity;
(c) a list of the names, addresses, and official positions of the following:
(1) all members of the board of directors, or governing body of the local government unit, and the principal officers and shareholders of the applicant organization; and
(2) all members of the board of directors, or governing body of the local government unit, and the principal officers of the major participating entity and each shareholder beneficially owning more than ten percent of any voting stock of the major participating entity;
The commissioner may by rule identify persons included in the term "principal officers";
(d) a full disclosure of the extent and nature of any contract or financial arrangements between the following:
(1) the health maintenance organization and the persons listed in clause (c)(1);
(2) the health maintenance organization and the persons listed in clause (c)(2);
(3) each major participating entity and the persons listed in clause (c)(1) concerning any financial relationship with the health maintenance organization; and
(4) each major participating entity and the persons listed in clause (c)(2) concerning any financial relationship with the health maintenance organization;
(e) the name and address of each participating entity and the agreed-upon duration of each contract or agreement;
(f) a copy of the form of each contract binding the participating entities and the health maintenance organization. Contractual provisions shall be consistent with the purposes of sections 62D.01 to 62D.30, in regard to the services to be performed under the contract, the manner in which payment for services is determined, the nature and extent of responsibilities to be retained by the health maintenance organization, the nature and extent of risk sharing permissible, and contractual termination provisions;
(g) a copy of each contract binding major participating entities and the health maintenance organization. Contract information filed with the commissioner shall be confidential and subject to the provisions of section 13.37, subdivision 1, clause (b), upon the request of the health maintenance organization.
Upon initial filing of each contract, the health maintenance organization shall file a separate document detailing the projected annual expenses to the major participating entity in performing the contract and the projected annual revenues received by the entity from the health maintenance organization for such performance. The commissioner shall disapprove any contract with a major participating entity if the contract will result in an unreasonable expense under section 62D.19. The commissioner shall approve or disapprove a contract within 30 days of filing.
Within 120 days of the anniversary of the implementation of each contract, the health maintenance organization shall file a document detailing the actual expenses incurred and reported by the major participating entity in performing the contract in the preceding year and the actual revenues received from the health maintenance organization by the entity in payment for the performance;
(h) a statement generally describing the health maintenance organization, its health maintenance contracts and separate health service contracts, facilities, and personnel, including a statement describing the manner in which the applicant proposes to provide enrollees with comprehensive health maintenance services and separate health services;
(i) a copy of the form of each evidence of coverage to be issued to the enrollees;
(j) a copy of the form of each individual or group health maintenance contract and each separate health service contract which is to be issued to enrollees or their representatives;
(k) financial statements showing the applicant's assets, liabilities, and sources of financial support. If the applicant's financial affairs are audited by independent certified public accountants, a copy of the applicant's most recent certified financial statement may be deemed to satisfy this requirement;
(l) a description of the proposed method of marketing the plan, a schedule of proposed charges, and a financial plan which includes a three-year projection of the expenses and income and other sources of future capital;
(m) a statement reasonably describing the geographic area or areas to be served and the type or types of enrollees to be served;
(n) a description of the complaint procedures to be utilized as required under section 62D.11;
(o) a description of the procedures and programs to be implemented to meet the requirements of section 62D.04, subdivision 1, clauses (b) and (c) and to monitor the quality of health care provided to enrollees;
(p) a description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of policy and operation under section 62D.06;
(q) a copy of any agreement between the health maintenance organization and an insurer, including any nonprofit health service corporation or another health maintenance organization, regarding reinsurance, stop-loss coverage, insolvency coverage, or any other type of coverage for potential costs of health services, as authorized in sections 62D.04, subdivision 1, clause (f), 62D.05, subdivision 3, and 62D.13;
(r) a copy of the conflict of interest policy which applies to all members of the board of directors and the principal officers of the health maintenance organization, as described in section 62D.04, subdivision 1, paragraph (g). All currently licensed health maintenance organizations shall also file a conflict of interest policy with the commissioner within 60 days after August 1, 1990, or at a later date if approved by the commissioner;
(s) a copy of the statement that describes the health maintenance organization's prior authorization administrative procedures; and
(t) other information as the commissioner of health may reasonably require to be provided.
1973 c 670 s 3; 1977 c 305 s 45; 1983 c 205 s 3,4; 1984 c 464 s 12; 1984 c 641 s 2; 1985 c 248 s 21,22; 1987 c 384 art 2 s 1; 1988 c 612 s 3; 1990 c 538 s 14; 1997 c 205 s 2,3; 2006 c 212 art 3 s 2; 2009 c 79 art 5 s 2; 2017 c 2 art 2 s 5

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