                                 CODE OF VIRGINIA

GENERAL PROVISIONS (§ 38.2-5801)

A. No person shall operate an MCHIP in this Commonwealth unless the health
carrier who directly or indirectly manages, owns, contracts with, or employs the
providers for the plan is licensed in accordance with provisions in this title
as an insurance company, a health maintenance organization, or a nonstock
corporation organized in accordance with provisions in Chapter 42 (&#xA7;
38.2-4200 et seq.) or Chapter 45 (&#xA7; 38.2-4500 et seq.) of this title. Such
health carrier shall be deemed responsible for the MCHIP and its compliance with
this chapter and the provisions of Title 32.1 concerning quality assurance of
MCHIPs. A health carrier may be responsible for more than one MCHIP; however, no
MCHIP shall have more than one responsible health carrier.

B. Except as provided in subsection C, no person shall operate an MCHIP in this
Commonwealth unless the health carrier responsible for the MCHIP holds an active
or temporarily suspended certificate of quality assurance issued by the
Department of Health.

C. 1. A health maintenance organization applying for licensure under this title
on or after July 1, 1998, or whose application for such licensure is pending
before the Commission on July 1, 1998, shall request its initial certificate of
quality assurance prior to licensing and a copy of its request shall be included
with and made a part of the licensing application and material filed with the
Commission pursuant to § 38.2-4301 and subsection B of § 38.2-5802. Until July
1, 2000, (i) issuance of a license under § 38.2-4302 shall be contingent upon
receipt of notice from the State Health Commissioner that the health maintenance
organization&#8217;s description of its complaint system has been reviewed and
approved by the State Health Commissioner and (ii) upon issuance of the license
such health maintenance organization shall be deemed in compliance with
subsection B provided no certificate of quality assurance has been issued to the
health maintenance organization which has been revoked or not renewed by the
State Health Commissioner. Effective July 1, 2000, issuance of a license under
§ 38.2-4302 shall be contingent upon the Department of Health&#8217;s issuance
of a certificate of quality assurance.

   2. Until July 1, 2000, a health maintenance organization licensed under this
   title on and before July 1, 1998, shall be deemed in compliance with the
   provisions of this section if (i) a request for initial certification has been
   filed with the Department of Health on or before December 1, 1998, and is
   pending before the State Health Commissioner and (ii) no certificate has been
   issued to the health maintenance organization which has been revoked or not
   renewed by the State Health Commissioner.

   3. A health carrier, other than a health maintenance organization, responsible
   for an MCHIP pursuant to this chapter, shall request its initial certificate
   of quality assurance from the Department of Health on or before December 1,
   1998, or becoming responsible for a MCHIP under this title. Until July 1,
   2000, such health carrier shall be deemed in compliance with the provisions of
   this section if (i) a request for initial certification is pending before the
   Department of Health and (ii) no certificate has been issued to the health
   carrier which has been revoked or not renewed by the State Health
   Commissioner.

D. The provisions of this chapter shall apply to all health carriers and all
MCHIPs operating in this Commonwealth unless an exemption is recognized in
accordance with &#xA7; 38.2-3420; and, except as otherwise provided in this
chapter, the provisions of this chapter shall be supplemental and in addition to
those otherwise applicable under this title or Title 32.1.

HISTORY: 1998, c. 891.