(a)  The powers of a health maintenance organization include, but are not limited to, the following:

(1)  The purchase, lease, construction, renovation, operation, or maintenance of hospitals, medical facilities, or both, and their ancillary equipment, and any property that may reasonably be required for its principal office or for any other purposes that may be necessary in the transaction of the business of the health maintenance organization as defined in § 27-41-2(20);

(2)  The making of loans to a medical group under contract with it in furtherance of its program or the making of loans to a corporation or corporations under its control for the purpose of acquiring or constructing medical facilities and hospitals or in furtherance of a program providing healthcare services to enrollees;

(3)  The furnishing of healthcare services through providers that are under contract with or employed by the health maintenance organization;

(4)  The contracting with any person for the performance on its behalf of certain functions such as marketing, enrollment, and administration;

(5)  The contracting with an insurance company or a hospital or medical service corporation licensed in this state for the provision of insurance, indemnity, or reimbursement against the cost of healthcare services provided by the health maintenance organization;

(6)  The offering, in addition to basic healthcare services, of:

(i)  Additional healthcare services;

(ii)  Indemnity benefits covering out-of-area or emergency services; and

(iii)  Indemnity benefits, in addition to those relating to out-of-area and emergency services, provided through insurance companies or hospital or medical service corporations.

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Terms Used In Rhode Island General Laws 27-41-5

  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Director: means the director of the department of business regulation or his or her duly appointed agents. See Rhode Island General Laws 27-41-2
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Health maintenance organization: means a single public or private organization that:

    (i)  Provides or makes available to enrolled participants healthcare services, including at least the following basic healthcare services: usual physician services, hospitalization, laboratory, x-ray, emergency, and preventive services, and out-of-area coverage, and the services of licensed midwives;

    (ii)  Is compensated, except for copayments, for the provision of the basic healthcare services listed in subsection (20)(i) of this section to enrolled participants on a predetermined periodic rate basis;

    (iii)(A)  Provides physicians' services primarily:

    (I)  Directly through physicians who are either employees or partners of the organization; or

    (II)  Through arrangements with individual physicians or one or more groups of physicians organized on a group practice or individual practice basis;

    (B)  "Health maintenance organization" does not include prepaid plans offered by entities regulated under chapter 1, 2, 19, or 20 of this title that do not meet the criteria above and do not purport to be health maintenance organizations; and

    (iv)  Provides the services of licensed midwives primarily:

    (A)  Directly through licensed midwives who are either employees or partners of the organization; or

    (B)  Through arrangements with individual licensed midwives or one or more groups of licensed midwives organized on a group practice or individual practice basis. See Rhode Island General Laws 27-41-2

  • Healthcare services: means any services included in the furnishing to any individual of medical, podiatric, or dental care, or hospitalization, or incident to the furnishing of that care or hospitalization, and the furnishing to any person of any and all other services for the purpose of preventing, alleviating, curing, or healing human illness, injury, or physical disability. See Rhode Island General Laws 27-41-2
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
  • real estate: may be construed to include lands, tenements, and hereditaments and rights thereto and interests therein. See Rhode Island General Laws 43-3-10

(b)  A health maintenance organization shall file notice, with adequate supporting information, with the director of business regulation prior to the exercise of any power granted in subsection (a)(1), (a)(2), or (a)(4) of this section. The director of business regulation shall disapprove any exercise of power only if in the director’s opinion it would substantially and adversely affect the financial soundness of the health maintenance organization and endanger its ability to meet its obligations. The director of business regulation shall approve or disapprove any exercise of power within a reasonable time, subject to certification of approval from the director of health and to the requirements of chapter 15 of Title 23, the Health Care Certificate of Need Act of Rhode Island.

(c)  Investment in real estate may be made only for the purposes set forth in subsection (a)(1) of this section, except that the health maintenance organization shall not be required to fully comply with the uses described in subsection (a)(1) of this section until December 31 of the year following the year of purchase. Upon submission to the director of evidence demonstrating that the health maintenance organization is making satisfactory progress toward compliance with this subsection, the director may grant an extension of no more than one year beyond the time provided.

(d)  The director of business regulation may promulgate rules and regulations exempting from the filing requirement of subsection (b) of this section those activities having a de minimis effect.

History of Section.
P.L. 1983, ch. 225, § 2; P.L. 2001, ch. 248, § 1; P.L. 2001, ch. 330, § 1.