| (a) Any delegation of any function under Insurance
Code Chapter 843 (concerning Health Maintenance Organizations) and
Chapter 1272 (concerning Delegation of Certain Functions by Health
Maintenance Organization), and other applicable insurance laws and
regulations of this state by an HMO must comply with this subchapter.
(b) Oversight by the department does not relieve an
HMO of responsibility for monitoring and oversight of its delegated
entities.
(c) Before entering into, renewing, or amending a delegation
agreement, an HMO must make a reasonable effort to evaluate the delegated
entity's current and prospective ability to perform the functions
to be delegated, including, but not limited to, the solvency and financial
operations of the delegated entity and the projected financial effects
of the agreement on the delegated entity.
(d) An HMO that delegates functions to a delegated
entity must have a written contingency plan to resume any and all
delegated functions, including, as applicable:
(1) quality of care;
(2) continuity of care, including a plan for transferring
enrollees to new physicians and providers in the event of termination
of the delegation agreement; and
(3) processing, adjudication, and payment of claims.
(e) The department may require an HMO to immediately
terminate any delegation agreement to ensure that the HMO is in compliance
with Insurance Code Chapter 843 and Chapter 1272 and other applicable
insurance laws and regulations of this state.
(f) An HMO retains ultimate responsibility for any
and all functions delegated.
(g) A delegated entity's failure to comply with applicable
statutes or rules constitutes a violation of Insurance Code Chapter
843 and Chapter 1272 and other applicable insurance laws and regulations
of this state by the delegating HMO.
(h) An HMO is responsible for monitoring each delegated
entity with which it contracts to ensure compliance with all applicable
statutes and rules, as well as for solvency.
(i) An HMO must report to the department, within a
reasonable time, all penalties assessed against a delegated entity
under the provisions of the delegation agreement.
(j) If an HMO cannot ensure that a delegated entity
is performing all delegated functions in compliance with all applicable
statutes, rules, or an order issued by the department under this subchapter,
the HMO must resume all delegated functions from the delegated entity.
(k) If a license is required for any function delegated
by an HMO, the HMO must ensure that the delegated entity or third
party performing the function has a current appropriate license.
(l) On termination of a delegation agreement by either
party, the HMO must notify the department.
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