                                 CODE OF VIRGINIA

SUSPENSION OR REVOCATION OF LICENSE (§ 38.2-4316)

A. The Commission may suspend or revoke any license issued to a health
maintenance organization under this chapter if it finds that any of the
following conditions exist:

   1. The health maintenance organization is operating significantly at variance
   with its basic organizational document, its health care plan, or in a manner
   contrary to that described in and reasonably inferred from any other
   information submitted under &#xA7; 38.2-4301, unless amendments to those
   submissions have been filed with and approved by the Commission;

   2. The health maintenance organization issues an evidence of coverage or uses
   a schedule of charges for health care services that do not comply with the
   requirements of &#xA7; 38.2-4306;

   3. The health care plan does not provide or arrange for basic health care
   services or limited health care services;

   4. The health maintenance organization is no longer financially responsible
   and a reasonable expectation exists that it may be unable to meet its
   obligations to enrollees or prospective enrollees;

   5. The health maintenance organization has failed to implement a mechanism
   providing the enrollees with an opportunity to participate in matters of
   policy and operation as provided in &#xA7; 38.2-4304;

   6. The health maintenance organization, or any person on its behalf, has
   advertised or merchandised its services in an untrue, misrepresentative,
   misleading, deceptive, or unfair manner;

   7. The continued operation of the health maintenance organization would be
   hazardous to its enrollees; or

   8. The health maintenance organization has otherwise failed to substantially
   comply with the provisions of this chapter.

B. When the license of a health maintenance organization is suspended, the
health maintenance organization shall not enroll any additional enrollees during
the period of the suspension except newborn children or other newly acquired
dependents of existing enrollees, and shall not engage in any advertising or
solicitation.

C. The Commission shall not revoke or suspend the license of a health
maintenance organization upon any of the grounds set out in subsection A of this
section until it has given the organization ten days&#8217; notice of the
proposed revocation or suspension and the grounds for it, and has given the
organization an opportunity to introduce evidence and be heard. Any hearing
authorized by this section may be informal. The required notice may be waived by
the Commission and the health maintenance organization.

D. When the license of a health maintenance organization is revoked, the
organization shall proceed to wind up its affairs immediately following the
effective date of the order of revocation. The health maintenance organization
shall conduct no further business except as may be essential to the orderly
conclusion of its affairs. It shall engage in no further advertising or
solicitation. The Commission may, by written order, permit further operation of
the organization that it finds to be in the best interests of enrollees for the
purpose of giving them the greatest practical opportunity to obtain continuing
health care coverage.

HISTORY: 1980, c. 720, § 38.1-880; 1986, c. 562; 1992, c. 481; 1998, c. 891.