North Carolina HB 967: Prepaid Health Plans Licensing by DOI.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2015
H 1
HOUSE BILL 967*

Short Title: Prepaid Health Plans Licensing by DOI. (Public)
Sponsors: Representatives Dollar and Lambeth (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Insurance, if favorable, Appropriations
April 27, 2016
*H967-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO REQUIRE PREPAID HEALTH PLANS TO OBTAIN A LICENSE FROM THE 2
DEPARTMENT OF INSURANCE AND TO ENSURE SOLVENCY OF ALL PREPAID 3
HEALTH PLAN PROVIDERS UNDER THE MEDICAID PROGRAM, AS PROVIDED BY 4
THE DEPARTMENT OF INSURANCE AND AS RECOMMENDED BY THE JOINT 5
LEGISLATIVE OVERSIGHT COMMITTEE ON MEDICAID AND NC HEALTH CHOICE. 6
The General Assembly of North Carolina enacts: 7
SECTION 1. Chapter 58 of the General Statutes is amended by adding a new Article 8
to read: 9
"Article 93. 10
"Prepaid Health Plan Licensing Act. 11
"§ 58-93-1. Short title. 12
This Article may be cited as the Prepaid Health Plan Licensing Act. 13
"§ 58-93-5. Definitions. 14
The following definitions apply in this Article: 15
(1) Enrollee. – An individual who is covered by and receives Medicaid health care 16
services through a Prepaid Health Plan. 17
(2) Health care services. – Services provided by a Prepaid Health Plan under a 18
capitated contract with the North Carolina Department of Health and Human 19
Services, through the Division of Health Benefits. 20
(3) Insolvent or Insolvency. – A circumstance that occurs when a Prepaid Health 21
Plan has been declared insolvent and is placed under an order of liquidation by 22
a court of competent jurisdiction. 23
(4) Person. – As defined in G.S. 58-1-5(9). 24
(5) Prepaid Health Plan or PHP. – A person that has entered into a capitated 25
contract with the North Carolina Department of Health and Human Services, 26
through the Division of Health Benefits, to deliver Medicaid or NC Health 27
Choice health care services. 28
(6) Working capital. – The excess of current assets over current liabilities. The only 29
borrowed funds that may be included in working capital must be funds that are 30
repayable only from net earned income and must be repayable only with the 31
advance permission of the Commissioner. 32
"§ 58-93-10. Licensing. 33

General Assembly Of North Carolina Session 2015
Page 2 House Bill 967*-First Edition
(a) Notwithstanding any law of this State to the contrary, only those persons authorized by 1
the Department of Health and Human Services, through the Division of Health Benefits, may 2
apply to the Commissioner for a license to operate a PHP in compliance with this Article. 3
(b) Any person that is already a licensed health organization in this State under this 4
Chapter shall not be subject to this Article, provided that the solvency requirements for such 5
organization are equal to or greater than the requirements of this Article. 6
(c) Each license application shall be verified by an officer or authorized representative of 7
the applicant, shall be in a form prescribed by the Commissioner, and shall be set forth or be 8
accompanied by all of the following: 9
(1) A copy of the organizational documents, if any, of the applicant, such as the 10
articles of incorporation, articles of association, partnership agreement, trust 11
agreement, or other applicable documents, and all amendments. 12
(2) A copy of the bylaws, rules and regulations, or similar documents, if any, 13
regulating the conduct of the internal affairs of the applicant. 14
(3) A list of the names, addresses, official positions, and biographical affidavit of 15
the persons who are to be responsible for the conduct of the affairs of the 16
applicant, including all members of the board of directors, board of trustees, 17
executive committee, or other governing board or committee, the principal 18
officers in the case of a corporation, or the partners or members in the case of a 19
partnership or association. This list shall be accompanied by a completed 20
release of information for each of these individuals on forms acceptable to the 21
Commissioner. 22
(4) A disclosure identifying all affiliates, including a description of any 23
management, service, or cost-sharing arrangements. 24
(5) The name and address of the registered agent. 25
(6) A detailed plan of operation. 26
(7) The names and addresses of the applicant's qualified actuary and external 27
auditors. 28
(8) Financial statements showing the applicant's assets, liabilities, and sources of 29
financial support. If the applicant's financial affairs are audited by independent 30
certified public accountants, a copy of the applicant's most recent regular 31
certified financial statement shall satisfy this requirement unless the 32
Commissioner directs that additional or more recent financial information is 33
required for the proper administration of this Article. 34
(9) A financial feasibility study that includes (i) detailed enrollment projections, (ii) 35
a projection of bala