(a) The department may suspend the authority of a prepaid limited health service organization to enroll new subscribers, through its contract with a health maintenance organization or with a federal or state agency, or revoke any certificate issued to a prepaid limited health service organization or order compliance within thirty (30) days, if it finds that any of the following conditions exist:

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Terms Used In Tennessee Code 56-51-139

  • Contract: A legal written agreement that becomes binding when signed.
  • Department: means the department of commerce and insurance. See Tennessee Code 56-51-102
  • Insolvent: means that all the statutory assets of the prepaid limited health service organization, if made immediately available, would not be sufficient to discharge all of its statutory liabilities or that the prepaid limited health service organization is unable to pay its debts as they become due in the usual course of business. See Tennessee Code 56-51-102
  • 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
  • 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
  • Rescission: The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) The organization is not operating in compliance with this chapter;
(2) The plan is no longer actuarially sound or the organization does not have the minimum surplus as required by this chapter;
(3) The organization has advertised, merchandised, or attempted to merchandise its services in such a manner as to misrepresent its services or capacity for service or has engaged in deceptive, misleading, or unfair practices with respect to advertising or merchandising;
(4) The organization is insolvent;
(5) The prepaid limited health service organization is operating significantly in contravention of its basic organizational document or in a manner contrary to that described in and reasonably inferred from any other information submitted pursuant to § 56-51-106 and § 56-51-107, unless amendments to the submissions have been filed with and approved by the department;
(6) The prepaid limited health service organization is unable to fulfill its obligations to furnish limited health services;
(7) The prepaid limited health service organization has no subscribers twelve (12) months after the issuance of the certificate of authority;
(8) The continued operation of the prepaid limited health service organization would be hazardous to its enrollees; or
(9) The prepaid limited health service organization has filed with the department sworn financial statements that contain material omissions or errors.
(b) If the department has cause to believe that grounds for the suspension or revocation of a certificate of authority exist, it shall notify the prepaid limited health service organization in writing specifically stating the grounds for suspension or revocation and shall pursue a hearing on the matter in accordance with the Uniform Administrative Procedures Act, compiled at title 4, chapter 5.
(c) When the certificate of authority of a prepaid limited health service organization is surrendered or revoked, the organization must proceed, immediately following the effective date of the order of revocation, to wind up its affairs transacted under the certificate of authority. It may not engage in any further advertising, solicitation, or renewal of contracts. The department may, by written order, permit the further operation of the organization as it finds to be in the best interest of enrollees, so that enrollees will be afforded the greatest practical opportunity to obtain continuing limited health services.
(d) The department shall, in its order suspending the authority of a prepaid limited health service organization to enroll new subscribers, specify the period during which the suspension is to be in effect and the conditions, if any, that must be met by the prepaid limited health service organization prior to reinstatement of its authority to enroll new subscribers. The order of suspension is subject to rescission or modification by further order of the department prior to the expiration of the suspension period. Reinstatement may not be made unless requested by the prepaid limited health service organization; however, the department may not grant reinstatement if it finds that the circumstances for which the suspension occurred still exist or are likely to recur.
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