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Pennsylvania Code



301.1.    Applicability.
301.2.    Definitions.

§ 301.1. Applicability.

 This chapter applies to persons who propose to establish, maintain and operate an HMO within this Commonwealth, with the exception of HMO programs exempted under sections 16 and 17(b) of the act (40 P. S. § §  1566 and 1567(b)).


   The provisions of this §  301.1 adopted February 20, 1987, effective February 21, 1987, 17 Pa.B. 807.

§ 301.2. Definitions.

 (a)  No contract or evidence of coverage delivered or issued for delivery to a person by an HMO established or operating in this Commonwealth may contain definitions respecting the matters in subsections (b) and (c) unless the definitions are consistent with this section.

 (b)  Definitions other than those in this section may be used as appropriate if they do not contradict the definitions in this subsection. Definitions used in the contracts or evidence of coverage shall be in alphabetical order.

 (c)  The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

   Act—The Health Maintenance Organization Act (40 P. S. § §  1551—1567).

   Affiliated provider or participating provider—A provider that has entered into a contractual agreement either directly or indirectly with an HMO to provide health care services to members.

   Certificate of authority—The document issued jointly by the Secretary and the Commissioner permitting a corporation to establish, maintain and operate a health maintenance organization.

   Commissioner—The Insurance Commissioner of the Commonwealth.

   Contractholder—An entity consisting of employes or members which has purchased a group contract from an HMO for the provision of specific health care services to its eligible employes or members.

   Department—The Insurance Department of the Commonwealth.

   Evidence of coverage—A certificate, agreement or contract issued to a subscriber setting out the coverage to which the member is entitled.

   Federally qualified health maintenance organization—An entity which has been found by the Secretary of the United States Department of Health and Human Services to meet the requirements of section 1301 of the Public Health Service Act (42 U.S.C.A. §  300e).

   Group contract—A contract for health care services which by its terms limits eligibility to members of a specified group.

   HMO—health maintenance organization—An organized system which combines the delivery and financing of health care and which provides basic health services to voluntarily enrolled members for a fixed prepaid fee.

   Impaired organization—An organization which is deemed by the Commissioner, under sections 5.1(b)(2) and 10 (40 P. S. § §  1555.1(b)(2) and 1560), to be no longer able to operate in a financially sound manner, but which is not insolvent.

   Individual contract or nongroup contract—A contract for health care services issued to and covering an individual or family member.

   Insolvent—The point at which an HMO’s liabilities exceed its assets, as defined in section 403 of The Insurance Company Law of 1921 (40 P. S. §  503).

   Medical necessity or medically necessary—Appropriate and necessary services as determined by the HMO which are rendered to a member for a condition requiring, according to generally accepted principles of good medical practice, the diagnosis or direct care and treatment of an illness or injury and which are not provided only as a convenience.

   Member or enrollee—An individual who is contractually entitled to receive basic health services from an HMO.

   Net worth—The excess of total admitted assets over total liabilities, but not including fully subordinated debt.

   Primary care physician—A physician who supervises, coordinates and provides initial and basic care to members; initiates their referral for specialist care and maintains continuity of patient care.

   Provider—A physician, hospital or other person licensed and practicing within the scope of the license or otherwise authorized in this Commonwealth to furnish health care services.

   Secretary—The Secretary of Health of the Commonwealth.

   Service area—The geographical area as approved by the Commissioner within which the HMO provides or arranges for health services for members.

   Subordinated debt—The debt which is subordinated to all other obligations of the HMO and which meets the requirements of this section.

   Subscriber—A member whose employment or other status, except for family dependency, is the basis for eligibility for enrollment in the HMO.


   The provisions of this §  301.2 amended under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. § §  66, 186, 411 and 412); and the Health Maintenance Organization Act (40 P. S. § §  1551—1567).


   The provisions of this §  301.2 adopted February 20, 1987, effective February 21, 1987, 17 Pa.B. 807; amended September 8, 1989, effective September 9, 1989, 19 Pa.B. 3820; amended March 13, 1992, effective March 14, 1992, 22 Pa.B. 1178. Immediately preceding text appears at serial pages (163550) and (143037).

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