Nevada Administrative Code Chapter 695C - Health Maintenance Organizations; Provider-Sponsored Organizations
Overview
NAC Chapter 695C sets forth the rules and regulations governing the operation, licensing, and oversight of Health Maintenance Organizations (HMOs) and Provider-Sponsored Organizations (PSOs) in Nevada. These organizations provide managed health care services, usually through a network of providers, aiming to deliver cost-effective and coordinated care.
The chapter implements state statutes that regulate HMOs and PSOs to ensure consumer protection, quality of care, financial stability, and compliance with applicable laws.
1. Definitions
The chapter defines important terms, including:
Health Maintenance Organization (HMO): An organization that provides or arranges managed health care services for enrolled members for a prepaid fee.
Provider-Sponsored Organization (PSO): A type of HMO that is organized, operated, or sponsored by health care providers (such as hospitals or physician groups) to deliver care directly.
Enrollee: A person who is eligible and enrolled to receive services from an HMO or PSO.
Network Provider: A health care provider who has contracted with an HMO or PSO to provide services to enrollees.
Prepaid Health Care: A system where members pay in advance for health care services.
2. Licensing and Application Requirements
To operate legally in Nevada, an HMO or PSO must obtain a license from the Nevada Division of Insurance.
The application must include detailed information on the organization’s:
Ownership and governance structure
Financial condition and projections
Business plan, including services offered
Provider network and contracting policies
Quality assurance programs
Marketing and enrollment procedures
The Division reviews applications to ensure the organization meets financial solvency and operational standards.
3. Financial Standards and Solvency
HMOs and PSOs must maintain sufficient financial reserves to cover liabilities and ensure ongoing operations.
They are required to submit periodic financial reports and undergo audits.
The chapter specifies minimum capital and surplus requirements.
Financial stability is critical to protect enrollees from service interruptions.
4. Provider Networks and Contracts
HMOs and PSOs must develop and maintain adequate networks of providers to deliver covered services.
Network providers must have formal contracts defining roles, responsibilities, payment terms, and quality expectations.
The organizations must monitor provider performance and ensure compliance with contract terms.
Members must have access to specialists, hospitals, and other necessary services within the network or through authorized referrals.
5. Enrollee Rights and Protections
The chapter outlines enrollee rights, such as:
The right to receive timely and appropriate care.
The right to access emergency services without prior authorization.
Privacy and confidentiality of medical records.
Procedures for grievances and appeals if services are denied or delayed.
HMOs and PSOs must have written policies for handling enrollee complaints and appeals and must provide timely responses.
6. Marketing and Enrollment Practices
Marketing materials and enrollment processes must be truthful, clear, and not misleading.
HMOs and PSOs must provide potential enrollees with all necessary information to make informed decisions, including coverage benefits, exclusions, and costs.
Enrollment procedures must comply with nondiscrimination laws.
The organizations must keep records of enrollment applications and contracts.
7. Quality Assurance and Utilization Review
HMOs and PSOs must have ongoing quality assurance programs to monitor the quality and effectiveness of health care services.
Utilization review procedures are used to ensure that services are medically necessary and appropriate.
These programs may include peer review, clinical audits, and member satisfaction surveys.
The organizations must report quality metrics to the Division of Insurance as required.
8. Reporting and Record-Keeping
The chapter requires HMOs and PSOs to maintain detailed records of financial transactions, enrollee information, provider contracts, complaints, and quality assurance activities.
Regular reports must be submitted to state regulators, including financial statements, claims data, and quality measures.
Records must be retained for specified periods and be available for inspection.
9. Disciplinary Actions and Enforcement
The Nevada Division of Insurance has authority to investigate complaints and violations.
If an HMO or PSO fails to comply with the rules, the Division may impose sanctions such as:
Fines
License suspension or revocation
Orders to correct deficiencies
The organizations have the right to appeal enforcement actions.
10. Termination and Withdrawal Procedures
The chapter outlines procedures for voluntary or involuntary termination of an HMO or PSO’s license.
If an organization plans to cease operations, it must notify enrollees, arrange for continuity of care, and submit a plan to the Division.
The chapter also addresses handling of claims and member records upon termination.
Summary
NAC Chapter 695C provides a comprehensive regulatory framework to ensure that Health Maintenance Organizations and Provider-Sponsored Organizations operating in Nevada:
Are financially sound and well-managed.
Maintain adequate provider networks.
Protect the rights and interests of enrollees.
Provide high-quality, coordinated health care.
Operate transparently and ethically.
Comply with state laws and administrative rules.
This chapter helps ensure that consumers receive reliable, effective health care through these managed care entities while maintaining oversight to protect public health and safety.
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