N.J. Admin. Code § 11:22-4.3

Current through Register Vol. 57, No. 1, January 6, 2025

Section 11:22-4.3 - License requirement

(a) An organized delivery system that receives compensation on a basis that entails the assumption of financial risk shall submit an application for licensure to the Commissioner.

1. This subchapter shall apply to any contract issued and/or renewed on or after October 21, 2002.

(b) An organized delivery system that receives compensation on a basis that entails the assumption of financial risk, but meets the criteria set forth in this subsection, may apply to the Commissioner for an exemption from the licensure requirements based on the system's current contractual arrangements. Any organized delivery system seeking an exemption shall file an application in the format and containing the information set forth at www.state.nj.us/dobi/division_insurance/managedcare/mcapps.htm, as described in N.J.A.C. 11:22-4.4(a)1, with a non-refundable filing fee in the amount of $ 1,000, payable to the Treasurer, State of New Jersey.

1. The Commissioner may grant the exemption for such period of time that he or she determines that the financial risk of the organized delivery system is de minimis because the organized delivery system's exposure to financial loss is limited in amount or likelihood to the degree that it reasonably will not prevent the system from satisfying the liabilities imposed under the terms of its contracts. In making this determination, the Commissioner shall consider various factors in conjunction with the terms of contract with the carrier, including, but not limited to:

i. The existence of stop loss insurance maintained by the organized delivery system from an insurer(s) acceptable to the Commissioner;

ii. Whether the carrier has taken a deduction or credit against the liability it is required to maintain pursuant to law for any risk transferred to the organized delivery system; and

iii. The nature of the risk assumed and the type of coverage related to that risk; and/or

iv. Any limit on the organized delivery system's liability.

v. In any event, the financial risk shall be deemed de minimis if the total annual compensation received by the organized delivery system from any one carrier is less than $ 250,000.

2. The Commissioner may revoke the organized delivery system's exemption from licensure, after notice and an opportunity for hearing, if he or she determines that the system's contracts no longer meet the requirements for exemption set forth in this subsection. Any hearing shall be conducted pursuant to the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq. and 52:14F-1 et seq., and Uniform Administrative Procedure Rules, N.J.A.C. 1:1. Upon revocation of the exemption, the system shall be required to obtain licensure from the Department within 90 days.

(c) An organized delivery system that is granted an exemption from licensure shall apply to and obtain certification as an organized delivery system from the Department pursuant to N.J.S.A. 17:48H-1 et seq.

(d) A licensed organized delivery system shall not directly issue health benefits plans.

N.J. Admin. Code § 11:22-4.3

Amended by 47 N.J.R. 2296(b), effective 9/8/2015