                                 CODE OF VIRGINIA

ESTABLISHMENT OF AN MCHIP (§ 38.2-5802)

A. A health carrier, when applying for initial licensing under this title and
with each request for renewal that is to be effective on or after July 1, 1999,
shall describe and categorize generally its transactions and operations in this
Commonwealth that influence the cost or level of health care services between
the health carrier and one or more providers with respect to the delivery of
health care services through its MCHIPs. Descriptions and categorization shall
identify generally the arrangements that the health carrier has with providers
with respect to the delivery of health care services. Descriptions of incentive
arrangements shall include compensation methodology and incentives. The
descriptions of incentive arrangements shall not include amounts of compensation
and values of incentives. Renewal filings shall clearly identify new matter and
material changes of information disclosed in the preceding filing.

B. A health carrier applying to the Department of Health for initial
certification of quality assurance shall simultaneously file a copy of its
request for certification with the Commission and shall include the list of
providers required by &#xA7; 38.2-5805. Such filings shall be assessed by the
Department of Health.

C. In addition to items specified in subsection B, the initial filing under this
chapter by a health carrier subject to subsection B of &#xA7; 38.2-5801 shall
include any forms of contracts, including any amendments thereto, made with
health care providers enabling the health carrier to provide health care
services through its MCHIPs to covered persons. Individual provider contracts
and contracts with persons outside this Commonwealth shall not be filed with the
Commission unless requested by the Commission or necessary to explain or fully
disclose pursuant to subsection D operational changes that are materially at
variance with the information currently on file with the Commission. The health
carrier shall maintain a complete file of all contracts made with health care
providers which shall be subject to examination by the Commission. The contracts
shall be retained in the file for a period of at least five years after their
expiration. Notwithstanding the provisions of Chapter 37 (&#xA7; 2.2-3700 et
seq.) of Title 2.2 of the Code of Virginia, such contracts shall be confidential
and shall not be subject to discovery upon subpoena.

D. No MCHIP shall be operated in a manner that is materially at variance with
the information submitted pursuant to this section. Any change in such
information which would result in operational changes that are materially at
variance with the information currently on file with the Commission shall be
subject to the Commission&#8217;s prior approval. If the Commission fails to act
on a notice of material change within thirty days of its filing, the proposed
changes shall be deemed approved. A material change in the MCHIP&#8217;s health
care delivery system shall be deemed to result in operational changes that are
materially at variance with the information on file with the Commission. The
Commission may determine that other changes are material and may require
disclosure to secure full and accurate knowledge of the affairs and condition of
the health carrier.

E. A health carrier shall give notice to the State Health Commissioner of the
filings it makes with the Commission pursuant to this section.

F. The provisions of this section are applicable generally for all health
carriers subject to licensure under this title. The provisions of this section
shall be applied specifically as follows: (i) the provisions of subsection A are
applicable for each health carrier requesting renewal of a license on or after
July 1, 1998, and also for each health carrier applying for initial licensing on
or after July 1, 1998; (ii) the provisions of subsection B shall be applied to
any health carrier that files an application with the Department of Health for
initial certification of quality assurance; (iii) the provisions of subsection C
become applicable as soon as a health carrier makes a filing pursuant to this
section; (iv) the filing requirements described in subsection D are applicable
for all material filed with the Commission pursuant to this section, and shall
be applied also when a health carrier proposes material changes to information
of the type described in this section which previously had been filed with the
Commission pursuant to provisions of Chapter 43 (&#xA7; 38.2-4300 et seq.) of
this title; and (v) the provisions of subsection E are applicable whenever a
health carrier makes a filing pursuant to this section.

HISTORY: 1998, c. 891; 1999, c. 20.