CHAPTER 24. SUSPENSION, REVOCATION, OR DENIAL OF CERTIFICATE OF AUTHORITY
IC 27-13-24
Chapter 24. Suspension, Revocation, or Denial of Certificate of
Authority
IC 27-13-24-1
Grounds for suspension or revocation
Sec. 1. (a) The commissioner may suspend or revoke a certificate
of authority issued under this article or deny an application submitted
under this article if the commissioner finds that any of the following
conditions exists:
(1) The health maintenance organization is operating:
(A) significantly in contravention of its basic organizational
document; or
(B) in a manner contrary to that described in any other
information submitted under IC 27-13-2;
unless amendments to the basic organizational document or
other submissions that are consistent with the operations of the
organization have been filed with and approved by the
commissioner.
(2) The health maintenance organization:
(A) issues an evidence of coverage;
(B) enters into a contract with a participating provider; or
(C) uses a schedule of charges for health care services;
that does not comply with the requirements of IC 27-13-7,
IC 27-13-15, and IC 27-13-20.
(3) The health maintenance organization does not provide or
arrange for basic health care services.
(4) The commissioner determines that the health maintenance
organization is unable to fulfill its obligations to furnish health
care coverage.
(5) The health maintenance organization is no longer financially
responsible and may reasonably be expected to be unable to
meet its obligations to enrollees or prospective enrollees.
(6) The health maintenance organization has failed to correct,
within the time prescribed by section 2 of this chapter, any
deficiency occurring due to the impairment of the prescribed
minimum net worth of the health maintenance organization.
(7) The health maintenance organization has failed to
implement the grievance procedures required by IC 27-13-10 in
a reasonable manner to resolve valid complaints.
(8) The health maintenance organization or any person acting
on behalf of the organization has intentionally advertised or
merchandised the services of the organization in an untrue, a
misrepresentative, a misleading, a deceptive, or an unfair
manner.
(9) The continued operation of the health maintenance
organization would be hazardous to the enrollees of the
organization.
(10) The health maintenance organization fails to comply with
the requirements provided under IC 27-13-36 through
IC 27-13-40.
(11) The health maintenance organization has otherwise failed
substantially to comply with this article.
(b) The commissioner, in a proceeding under IC 4-21.5-3-8, may
impose a civil penalty of not more than twenty-five thousand dollars
($25,000) against a health maintenance organization for each cause
listed in subsection (a). The civil penalties may not exceed one
hundred thousand dollars ($100,000) for any one (1) health
maintenance organization in one (1) calendar year. The penalty may
be imposed in addition to or instead of a suspension or revocation of
the certificate of authority of the health maintenance organization.
As added by P.L.26-1994, SEC.25. Amended by P.L.69-1998,
SEC.10.
IC 27-13-24-2
Deficient net worth
Sec. 2. (a) If the commissioner finds that the net worth maintained
by a health maintenance organization subject to this article is less
than the minimum net worth required by IC 27-13-12, the
commissioner shall:
(1) give written notice to the health maintenance organization
of the amount of the deficiency; and
(2) require the health maintenance organization to:
(A) file with the commissioner a plan for correction of the
deficiency that is acceptable to the commissioner; and
(B) correct the deficiency within a reasonable time, not to
exceed sixty (60) days, unless an extension of time, not to
exceed an additional sixty (60) days, is granted by the
commissioner.
(b) A deficiency described in subsection (a) is an impairment, and
the failure of a health maintenance organization to correct the
impairment in the time prescribed by the commissioner under
subsection (a) is grounds for:
(1) the suspension or revocation of the certificate of authority
of the organization; or
(2) placing the health maintenance organization in rehabilitation
or liquidation.
As added by P.L.26-1994, SEC.25.
IC 27-13-24-3
Procedures; written order; revised application; hearing
Sec. 3. (a) The commissioner may:
(1) suspend or revoke a certificate of authority;
(2) deny an application for a certificate of authority; or
(3) impose an administrative penalty;
under this article only after complying with this section.
(b) The commissioner may:
(1) suspend or revoke a certificate of authority;
(2) deny an application for a certificate of authority; or
(3) impose an administrative penalty;
under this section by written order that shall be sent to the health
maintenance organization or applicant by certified or registered mail.
In the case of an application for a certificate of authority, the written
order must be sent within one hundred twenty (120) days after the
submission of a completed application. Failure by the commissioner
to issue an order within the one hundred twenty (120) day period
constitutes approval of the application for a certificate of authority.
The written order must state the grounds, charges, or conduct on
which the suspension, revocation, denial, or administrative penalty
is based. The health maintenance organization or applicant may in
writing request a hearing within thirty (30) days after the date of the
mailing of the order. If a written request is not made, the order is
final upon expiration of the thirty (30) days.
(c) If an order is issued under subsection (b) denying an
application for a certificate of authority, the applicant may initiate
the following procedure:
(1) The applicant may submit to the commissioner a revised
application or any other information or material addressing the
reasons the commissioner denied the application. A revised
application and other information submitted to the
commissioner under this subdivision must be submitted within
thirty (30) days after receiving the order, unless the applicant
requests an extension of time from the commissioner, who may
not unreasonably deny the request.
(2) Upon receiving an applicant's revised application or other
information or materials as described in subdivision (1), the
commissioner shall promptly review the materials regardless of
whether the applicant has requested a hearing under subsection
(b).
(3) An applicant's submission of a revised application or other
information or materials is considered to correct and resolve the
reasons for denying the original application for a certificate of
authority. The application or revised application is considered
to be approved unless the commissioner notifies the applicant
in writing by certified or registered mail, within fifteen (15)
business days after the date the submission under subdivision
(1) is made, that the application or revised application is not
approved. A written notification under this subdivision must
state in detail the reasons for continuing to deny the application
or the revised application.
(d) If the health maintenance organization or applicant requests a
hearing under this chapter, the commissioner shall issue a written
notice of hearing and send the notice to the health maintenance
organization or applicant by certified or registered mail. The notice
must contain a specific date and time for the hearing, which may not
be less than twenty (20) days or more than sixty (60) days after the
mailing of the notice of hearing.
As added by P.L.26-1994, SEC.25. Amended by P.L.195-1996,
SEC.8.
IC 27-13-24-4
Action by commissioner after hearing
Sec. 4. (a) After a hearing, or upon failure of the health
maintenance organization or applicant to appear at the hearing, the
commissioner shall:
(1) take whatever action the commissioner finds necessary and
appropriate based on written findings; and
(2) mail the decision to the health maintenance organization or
applicant.
(b) The action of the commissioner under this chapter is subject
to review under IC 4-21.5.
As added by P.L.26-1994, SEC.25.
IC 27-13-24-5
Application of IC 4-21.5
Sec. 5. IC 4-21.5 applies to proceedings under this chapter to the
extent IC 4-21.5 does not conflict with any section of this chapter.
As added by P.L.26-1994, SEC.25.
IC 27-13-24-6
Prohibited activity during suspension
Sec. 6. A health maintenance organization whose certificate of
authority is suspended may not, during the period of suspension:
(1) enroll any additional enrollees, except newborn children or
other newly acquired dependents of existing enrollees; or
(2) engage in any advertising or solicitation.
As added by P.L.26-1994, SEC.25.
IC 27-13-24-7
Conclusion of affairs following revocation of certificate of
authority
Sec. 7. (a) A health maintenance organization whose certificate of
authority is revoked:
(1) shall proceed, immediately following the effective date of
the order of revocation, to wind up the affairs of the
organization; and
(2) may not conduct further business, except as essential to the
orderly conclusion of the affairs of the organization.
(b) After the certificate of authority of a health maintenance
organization is revoked, the health maintenance organization may not
engage in further advertising or solicitation.
(c) Notwithstanding subsection (a), the commissioner may, by
written order, permit further operation of a health maintenance
organization after the certificate of authority of the organization is
revoked if the commissioner finds the further operation of the
organization to be in the best interest of enrollees.
As added by P.L.26-1994, SEC.25.
IC 27-13-24-8
Prohibited activities before hearing
Sec. 8. If the commissioner issues an order under section 3(b)(1)
of this chapter and the health maintenance organization requests a
hearing under section 3(d) of this chapter within the time period
specified, the health maintenance organization may not:
(1) enroll any additional enrollees, except newborn children or
other newly acquired dependents of existing enrollees; or
(2) engage in any advertising or solicitation;
until the commissioner takes action under section 4 of this chapter.
As added by P.L.26-1994, SEC.25. Amended by P.L.195-1996,
SEC.9.