Section 51.04 - Approval of Preferred Provider Health Plans and Workers' Compensation Preferred Provider Arrangements(1)Application. No Preferred Provider Health Plan or Workers' Compensation Preferred Provider Arrangement may be approved without first submitting an application in a format specified by the Commissioner that includes at least the following: (a) A description of the geographical area in which the Preferred Providers are located, including a map of the distribution of the Preferred Providers;(b) A description of the manner in which covered Health Care Services and other benefits may be obtained by persons using the Preferred Providers, including a description of the grievance system available to Covered Persons, including procedures for the registration and resolution of grievance and any requirement within a Preferred Provider Health Plan that Covered Persons select a gatekeeper provider;(c) Provider contracts and contracting criteria, including: 1. A narrative description of the financial arrangements between the Organization and contracting Health Care Providers, identifying any assumption by the providers of financial risk through arrangements such as per diems, diagnosis-related groups, capitation or percentage withholding of fees;2. A copy of every standard form contract with preferred physicians and other Health Care Providers, including providers joining the Preferred Provider Arrangement via leasing, subcontracting, or other arrangements whereby the Organization does not contract directly with the providers (do not include rates of payment to providers);3. A copy of every standard form contract for all Preferred Provider Arrangements including administrative service agreements;4. A copy of the terms and conditions that must be met or agreed to by Health Care Providers desiring to enter into the Preferred Provider Arrangement(s) (do not include rates of payments to Health Care Providers); and5. A description of the criteria and method used to select Preferred Providers.(d) A detailed description of the utilization review program;(e) A detailed description of the quality assurance program;(f) Preferred Provider directory, which shall include: 1. A copy of the Preferred Provider directory distributed to Covered Persons; and2. A description of the process for distributing the directory to Covered Persons.(g) Filing fee for initial applications as determined by the Executive Office for Administration and Finance as set forth in 801 CMR 4.02: Fees for Licenses, Permits, and Services to be Charged by State Agencies.(h) Evidence of compliance with M.G.L. c. 1760 and 211 CMR 52.00: Managed Care Consumer Protections and Accreditation of Carriers.(2)Application Materials to be Submitted by Preferred Provider Health Plans Only. In addition to the application required by 211 CMR 51.04(1), Preferred Provider Health Plans must submit: (a) A narrative description of the Preferred Provider Health Plan to be offered, including a description of whether the plan will be available to small employers eligible under M.G.L. c. 176J;(b)Benefits and Services. 1. A copy of every standard form contract between the Organization and Health Care Purchasers for the Preferred Provider Health Plan;2. A copy of every standard form Evidence of Coverage for every Preferred Provider Health Plan;3. A description of any provision for Covered Services to be payable at the preferred level until an adequate network has been established for a particular service or provider type;4. A description of all mandated benefits and provider types available at the preferred and non-preferred level;5. A description of the incentives for Covered Persons to use the services of Preferred Providers;6. A description of any provisions that allow Covered Persons to obtain covered Health Care Services from a non-preferred provider at the Benefit Level for the same covered health care service rendered by a Preferred Provider; and7. A description of any provisions within the Preferred Provider Health Plan for holding Covered Persons financially harmless for payment denials by, or on behalf of, the Organization for improper utilization of covered Health Care Services caused by Preferred Providers.(c)Financial Resources. 1. A description of the arrangements to be used by the Organization to protect covered members from financial liability in the event of financial impairment or insolvency of any Preferred Provider that assumes financial risk; and2. Evidence of a surety bond, reinsurance, or other financial resources adequate to guarantee that the Organization's obligations to Covered Persons will be performed.(d)Rates. 1. A description of the Organization's methodology for establishing premium rates; and2. A copy of the average rates for community-rated accounts, non-credible accounts, or their equivalent in the rating structure used by the Organization.(3)Application Materials to be Submitted by Workers' Compensation Preferred Provider Arrangements Only. In addition to the application required by 211 CMR 51.04(1), Workers' Compensation Preferred Provider Arrangements must submit: (a) a list of each type of Health Care Provider and medical specialty involved in the proposed Preferred Provider Arrangement and the number of individuals representing each such type of practice and specialty;(b) a list of each Organization with which the Health Care Provider has previously entered into a Preferred Provider Arrangement, and of each Organization with which the applicant has a pending application for a Preferred Provider Arrangement;(c) copy of the letter from the Department of Industrial Accidents approving the applicant's utilization review and quality assessment program;(d) a written agreement to abide by, and a description of the procedure to incorporate, any treatment guidelines or protocols promulgated by the Department of Industrial Accidents pursuant to M.G.L. c. 152, §§ 13 and 30;(e) a procedure to guarantee cooperation by Preferred Providers with the utilization review and quality assurance program which allow for the removal of noncomplying providers from the arrangement;(f) a procedure for referring Covered Persons to Health Care Services outside the Preferred Provider Plan when indicated by diagnosis, excessive travel time, and presence of any preexisting medical condition which would make treatment substantially more difficult;(g) a position statement indicating how the applicant intends to facilitate the return to work of injured employees in a rapid, cost-effective and safe manner;(h) a copy from the Organization, if a self-insurer or self-insurance group, of the Organization's current authorization to act as a self-insurer or self-insurance group; and(i) a copy of the information distributed annually to employees which shall include clear reference to the following: 1. that an employee is required to obtain treatment within the Preferred Provider Health Plan for the first scheduled appointment or incur the responsibility to pay for such appointment, provided that such person may seek Health Care Services for a compensable injury outside the Preferred Provider Arrangement for the initial scheduled appointment without incurring any financial obligation when such appointment is with a licensed or registered Health Care Provider of a type or specialty not represented within the Preferred Provider Arrangement;2. that an employee may seek Health Care Services for a compensable injury outside the Preferred Provider Arrangement after the initial scheduled appointment without incurring any obligation to pay for such subsequent visit(s) according to the provisions of M.G.L. c. 152, § 30;3. that no copayments or deductibles may be charged employees with compensable injuries who utilize the Preferred Provider Arrangement or any other Health Care Provider under the provisions of M.G.L. c. 152, §§ 13 and 30;4. that each Covered Person has the right to file complaints regarding the provision of Health Care Services with the Health Care Services Board within the Division of Industrial Accidents;5. the names of all current Preferred Providers within the geographic region of such Covered Person or of all current Preferred Providers arranged geographically, to be distributed to Covered Persons upon initial approval of the Preferred Provider Arrangement; which shall also be posted in a convenient and prominent place in workplaces where covered workers are employed, and be re-distributed to Covered Persons after any alleged workplace injury or upon request; and6. a clear description of all other rights of Covered Persons and the obligations of applicants as well as information regarding any restrictions or requirements imposed upon Covered Persons by the Preferred Provider Arrangement's utilization review or quality assurance programs.(4)Review of Application. Upon receipt of a complete application, the Commissioner will review the submitted material to determine whether applicable requirements set forth in M.G.L. c. 152, and c. 1761 and 211 CMR 51.00 have been met, including the following: (a) Corporate and organizational structure capable of supporting the benefits offered;(b) Contractual agreements that adequately protect the interests of members;(c) Utilization systems ensuring the appropriate and efficient use of Health Care Services;(d) Quality assurance system monitoring the quality of care provided to members;(e) Clear and logical plan for marketing of a Preferred Provider Health Plan;(f) Adequate Preferred Provider networks to guarantee that all services contracted for will be accessible to members on a preferred basis and in all cases without delays detrimental to the health of Covered Persons;(g) Operations capable of administering the Preferred Provider Health Plan or Workers' Compensation Preferred Provider Arrangement and to maintain financial and utilization data for the Preferred Provider Health Plan or Preferred Provider Arrangement in a form separate or separable from other activities of the Organization;(h) Sufficient financial reserves to support introduction of a Preferred Provider Health Plan; and(i) Submission of all documentation and other materials required by 211 CMR 51.00.(5)Approval of Application. Each Preferred Provider Health Plan or Workers' Compensation Preferred Provider Arrangement, approved under M.G.L. c. 1761 and 211 CMR 51.00, may continue to be marketed unless such approval is subsequently revoked by the Commissioner. Following approval of any Workers' Compensation Preferred Provider Arrangement, a copy of the approved application must then be forwarded to the Office of Health Policy at the Department of Industrial Accidents.(6)Denial of Application. If an application is denied or a Preferred Provider Health Plan or Workers' Compensation Preferred Provider Arrangement is disapproved, the Commissioner shall notify the Organization in writing, stating the reason(s) for the denial. The Organization shall have the right to a hearing within 45 days of its receipt of such notice by filing a written request for hearing within 15 days of its receipt of such notice. Within 30 days after the conclusion of the hearing, the Commissioner shall either grant approval or shall notify the applicant in writing of the denial, stating the reason(s) for the denial. The Organization shall have the right to judicial review of the Commissioner's decision in accordance with the provisions of M.G.L. c. 30A, § 14.(7)Licensure. If it is determined during the review of any material submitted that any entity is bearing insurance risk, engaging or proposing to engage in the business of insurance as defined in M.G.L. c. 175; or the business of a nonprofit hospital service corporation as defined in M.G.L. c. 176A; or the business of a medical service corporation as defined in M.G.L. c. 176B; or the business of a dental service corporation as defined in M.G.L. c. 176E; or the business of an optometric service corporation as defined in M.G.L. c. 176F; or the business of a health maintenance organization as defined in M.G.L. c. 176G without proper licensure, the Commissioner will so inform the filer and require the relevant entity to seek licensure under the appropriate statute. The Commissioner may require the filer to submit any information necessary to make this determination.Amended by Mass Register Issue 1323, eff. 10/7/2016.