96-05: Modifications to Service Area and/or Provider Network

This bulletin was repealed by 08-05

To:           All Health Maintenance Organizations

From:      Jay Angoff, Director

Re:          Modifications to service area and/or provider network

Date:       August 14, 1996

Please be advised of the obligation of HMO's under Section 354.405.4, RSMo 1994, and Regulation 20 CSR 400-7.020 to file notice of their intention to modify any of the procedures or materials contained in their original application for a certificate of authority. Noteworthy among these materials are proposed modifications to an HMO's service area and/or its provider network.

SERVICE AREA

Pursuant to Section 354.405.3(10), HMO's are required to provide information regarding their proposed service areas so that the Department can determine whether the HMO can fulfill its statutory obligation to effectively provide basic health care services along with any other requirements of the HMO law (Sections 354.400 to 354.550). Historically, this has meant expansion of the service area, and the Department has specifically addressed this possibility in Regulation 20 CSR 400-7.090. Please be aware, however, that Section 354.405.4 also imposes the same prior notice and approval requirement upon any proposed decrease in an HM0's service area. Any HMO contemplating such a decrease in its service area should file notice with the Department prior to taking any substantive action.

PROVIDER NETWORK

Pursuant to Section 354.405.3(13) and the above-referenced service area requirements, the Department has routinely required HMOs to provide information regarding their provider networks as part of their initial application for a certificate of authority. Accordingly, Section 354.405.4 requires this network information to be updated as well. Although HMOs are now also required to provide information on their primary care and hospital provider networks by zip code as part of their Annual Statement, this does not absolve them from the Section 354.405.4 requirement for notice and approval of any changes to their provider networks. Since a significant increase or decrease in the network can have an impact on the HMO's ability to fulfill its statutory obligations, it is important that the Department be promptly apprised of substantial changes. The Department intends to amend its current HMO regulations to provide clarification regarding this current statutory requirement.

Should you have any questions regarding the above, please feel free to contact Kevin R. Jones in the Life and Health Section at (573) 751-3365. As always, we appreciate your cooperation and assistance.