(a) Before any entity may operate a prepaid limited health service organization, it must obtain a certificate of authority from the department. An application for a certificate of authority to operate a prepaid limited health service organization must be filed with the department on a form prescribed by the department. The application must be sworn to by an officer or authorized representative of the applicant and be accompanied by the following:

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Terms Used In Tennessee Code 56-51-106

  • Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
  • 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.
  • Department: means the department of commerce and insurance. See Tennessee Code 56-51-102
  • 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.
  • Limited health service: means dental care services, vision care services, mental health services, substance abuse services, and pharmaceutical services. See Tennessee Code 56-51-102
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds-type organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Tennessee Code 56-16-102
  • Prepaid limited health service contract: means any contract entered into by a prepaid limited health service organization with a health maintenance organization or a state or federal agency to provide limited health services in exchange for a prepaid per capita or prepaid aggregate fixed sum. See Tennessee Code 56-51-102
  • Prepaid limited health service organization: means any person, corporation, partnership, or any other entity that, in return for a prepayment from a health maintenance organization or a state or federal agency, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers. See Tennessee Code 56-51-102
  • Qualified independent actuary: means an actuary who is a member of the American Academy of Actuaries or the Society of Actuaries and who has experience in establishing rates for limited health services and who has no financial or employment interest in the prepaid limited health service organization. See Tennessee Code 56-51-102
  • Representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
  • Subscriber: means an individual on whose behalf a contract or arrangement has been entered into with a prepaid limited health service organization for health care services or other persons who also receive health care services as a result of the contract. See Tennessee Code 56-51-102
(1) A copy of the applicant’s basic organizational document, including the articles of incorporation, articles of association, partnership agreements, trust agreement, or other applicable documents and all amendments to the documents;
(2) A copy of all bylaws, rules, and regulations, or similar documents, if any, regulating the conduct of the applicant’s internal affairs;
(3) A list of the names, addresses, official positions, and biographical information of the individuals who are responsible for conducting the applicant’s affairs, including, but not limited to, all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers, contracted management company personnel, and any person or entity owning or having the right to acquire ten percent (10%) or more of the voting securities of the applicant. The listing must fully disclose the extent and nature of any contracts or arrangements between any individual who is responsible for conducting the applicant’s affairs and the prepaid limited health service organization, including any possible conflicts of interest;
(4) A complete biographical statement, on forms prescribed by the department, an independent investigation report, with respect to each individual identified under subdivision (a)(3);
(5) A statement generally describing the applicant, its facilities and personnel, and the limited health service or services to be offered;
(6) A copy of the form of all contracts made or to be made between the applicant and any providers regarding the provision of limited health services to enrollees;
(7) A copy of the form of any contract made or arrangement to be made between the applicant and any person listed in subdivision (a)(3);
(8) A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant’s behalf of any function, including, but not limited to, marketing, administration, enrollment, investment management, and subcontracting for the provision of limited health services to enrollees;
(9) A copy of the form of any prepaid limited health service contract that is to be issued to employers, unions, trustees, individuals, or other organizations and a copy of any form of evidence of coverage to be issued to subscribers;
(10) A copy of the applicant’s most recent financial statements audited by an independent certified public accountant;
(11) A copy of the applicant’s financial plan, including a three-year projection of anticipated operating results, a statement of the sources of funding, and provisions for contingencies, for which projection all material assumptions shall be disclosed;
(12) A schedule of rates and charges for each contract to be used that contains an opinion from a qualified independent actuary that the rates are not inadequate, excessive, or discriminatory;
(13) A description of the proposed method of marketing;
(14) A description of the subscriber complaint procedures to be established and maintained as required under § 56-51-131;
(15) A description of how the applicant will comply with § 56-51-138;
(16) The fee for issuance of a certificate of authority as provided in § 56-51-145; and
(17) Other information the department may reasonably require to make the determinations required by this chapter.
(b) The applicant shall meet the network adequacy requirements established pursuant to § 56-7-2356.
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