Section 26-A3508. MAINTENANCE OF INSUFFICIENT NET WORTH

 

3508.1When the Commissioner finds that the net worth maintained by any HMO is less than the minimum net worth required to be maintained under section 3506, the Commissioner shall give written notice to the HMO indicating the amount of the deficiency and require it to file a plan to correct the deficiency. The plan shall be acceptable to the Commissioner. The HMO shall correct the deficiency within a reasonable time not to exceed sixty (60) days, unless the Commissioner grants an extension of time to correct the deficiency.

 

3508.2A deficiency in an HMO's net worth will be considered an impairment. An impairment will be grounds for placing the HMO in conservation, rehabilitation, or liquidation, or suspending or revoking its certificate of authority. Noncompliance with the requirements in section 3506 is a prerequisite to suspending or revoking a certificate of authority, denying an application for a certificate of authority or imposing an administrative penalty.

 

3508.3When an HMO is impaired and the fact of impairment is known by the HMO or to the person acting on its behalf, no HMO or the person acting on its behalf may, directly or indirectly, renew, issue, or deliver any certificate, agreement, or contract of coverage in the District, for which a premium dues is charged or collected, except for newborn children, other newly acquired dependents of existing enrollees, other newly eligible individuals, or as otherwise allowed by the Commissioner.

 

3508.4The existence of an impairment shall not prevent the issuance or renewal of a certificate, agreement or contract when an enrollee exercises an option granted under the plan to obtain new, renewed, or converted coverage.

 

3508.5Suspension or revocation of a certificate of authority, the denial of an application or imposition of an administrative penalty shall be by written order and shall be sent to the HMO by certified or registered mail.

 

3508.6The written order shall state the grounds, charges or conduct on which the suspension, revocation, denial of an application, or administrative penalty is based.

 

3508.7An HMO or applicant has thirty (30) days from the date of mailing of the order to make a written request for a hearing.

 

3508.8An order under subsection 3508.6 shall be final upon the expiration of the thirty (30) days.

 

3508.9The procedural requirements for hearings shall be the same as prescribed in section 10 of the District of Columbia Administrative Procedure Act, D.C. Code § 1-1509.

 

3508.10When the certificate of authority of an HMO is suspended, the HMO shall not enroll any additional enrollees (except for newborn children, other newly acquired dependents of existing enrollees, or other newly eligible individuals), and shall not engage in any advertising or solicitation whatsoever.

 

3508.11When an HMO's certificate of authority is revoked, the HMO shall, immediately following the effective date of the order of revocation:

 

(a)Immediately wind up its affairs in the District;

 

(b)Conduct no further business in the District except as may be essential to the orderly conclusion of the HMO's affairs in the District;

 

(c)Cease advertising or soliciting customers for its services in the District; and

 

(d)If permitted by written order of the Commissioner, may further operate its business if the Commissioner finds it to be in the best interest of the HMO's enrollees.

 

source

Final Rulemaking published at 46 DCR 7291(September 17, 1999).