COMMITTEE SUBSTITUTE

FOR

H. B. 2713


(By Delegates H. White, Hrutkay and R. M. Thompson)


(Originating in the Committee on Government Organization)

[February 24, 2003]


A BILL to amend and reenact section three-a, article twenty-five-a, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to authorizing health maintenance organizations incorporated in other states to operate in West Virginia.

Be it enacted by the Legislature of West Virginia:
That section three-a, article twenty-five-a, chapter thirty- three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 25A. HEALTH MAINTENANCE ORGANIZATION ACT.
§33-25A-3a. Conditions.
(1) As a condition precedent to the issuance or maintenance of a certificate of authority, a
health maintenance organization must file or have on file with the commissioner:
(a) An acknowledgment that a delinquency proceeding pursuant to article ten of this chapter or supervision by the commissioner pursuant to article thirty-four of this chapter constitutes the sole and exclusive method for the liquidation, rehabilitation, reorganization or conservation of a health maintenance organization;
(b) A waiver of any right to file or be subject to a bankruptcy proceeding;
(c) Within thirty days of any change in the membership of the governing body of the organization or in the officers or persons holding five percent or more of the common stock of the organization, or as otherwise required by the commissioner:
(i) An amended list of the names, addresses and official positions of each member of the governing body, and a full disclosure of any financial interest by a member of the governing body or any provider or any organization or corporation owned or controlled by that person and the health maintenance organization and the extent and nature of any contract or financial arrangements between that person and the health maintenance organization; and
(ii) A complete biographical statement on forms prescribed by the commissioner and an independent investigation report on each person for whom a biographical statement and independent investigation report have not previously been submitted; and
(d) Effective the first day of May, one thousand nine hundred ninety-eight, for health maintenance organizations that have been in existence at least three years, a copy of the current quality assurance report submitted to the health maintenance organization by a nationally recognized accreditation and review organization approved by the commissioner, or in the case of the issuance of an initial certificate of authority to a health maintenance organization, a determination by the commissioner as to the feasibility of the health maintenance organization's proposed quality assurance program: Provided, That if a health maintenance organization files proof found in the commissioners discretion to be sufficient to demonstrate that the health maintenance organization has timely applied for and reasonably pursued a review of its quality assurance program, but a quality report has not been issued by the accreditation and review organization, the health maintenance organization shall be deemed considered to have complied with this subdivision.
(2) After the effective date of this section the first day of July, two thousand three, as a condition precedent to the issuance of a certificate of authority, any organization that has not yet obtained making application for a certificate of authority to operate a health maintenance organization in this state shall be incorporated under the provisions of article one, chapter thirty-one of this code or the applicable law of the organization's state of domicile: Provided, That nothing in this subsection is intended to permit any corporation to apply for a certificate of authority to operate a health maintenance organization in this state unless the corporation complies with all requirements for health maintenance organizations contained within this article.
(3) After the effective date of this subsection, all certificates of authority issued to health maintenance organizations shall expire at midnight on the thirty-first day of May of each year. The commissioner shall renew annually the certificates of authority of all health maintenance organizations that continue to meet all requirements of this section and subsection (2), section four of this article, make application therefor upon a form prescribed by the commissioner and pay the renewal fee prescribed: Provided, That a health maintenance organization shall not qualify for renewal of its certificate of authority if the organization has no subscribers in this state within twelve months after issuance of the certificate of authority: Provided, however, That an organization not qualifying for renewal may apply for a new certificate of authority under section three of this article.
(4) The commencement of a bankruptcy proceeding either by or against a health maintenance organization shall, by operation of law:
(a) Terminate the health maintenance organization's certificate of authority; and
(b) Vest in the commissioner for the use and benefit of the subscribers of the health maintenance organization the title to any deposits of the health maintenance organization held by the commissioner.
(5) If the bankruptcy proceeding is initiated by a party other than the health maintenance organization, the operation of subsection (4) of this section shall be stayed for a period of sixty days following the date of commencement of the proceeding.