Sec 36-2906.01. Qualified commercial carriers; administration; contracts

A. Entities, including insurers as defined in section 20-104, hospital, medical, dental and optometric service corporations defined in title 20, chapter 4, article 3 and health care services organizations as defined in section 20-1051, are prohibited from contracting with the administration as a system contractor unless the entity establishes an affiliated corporation whose only authorized business is to provide services or coverage pursuant to a contract with the administration to persons defined as eligible in section 36-2901, paragraph 6, subdivisions (a), (f) and (g).

B. If there is an insufficient number of, or an inadequate member capacity in, contracts awarded to contractors, the director may request that the director of the department of insurance grant a temporary exemption from the requirements of subsection A of this section for an entity regulated by the department of insurance, and otherwise qualified to be a system health plan, in order for that entity to enter into an arrangement with the administration to provide services to persons defined as eligible in section 36-2901, paragraph 6, subdivisions (a), (f) and (g). On a written request from the administration, the director of the department of insurance may grant a one-time exemption to an entity, for a period not to exceed one year. During the temporary exemption, the entity must comply with all applicable provisions of both this article and the applicable chapter or article of title 20 under which the entity is licensed to operate.

C. With respect to entities that have been granted an exemption pursuant to subsection B of this section, the provisions of section 36-2903, subsection M, relating to the direct operation of a provider, shall not apply. If the director determines that the operations of the entity would otherwise meet the circumstances specified in contract under which the administration could operate the entity directly or that the public health, safety or welfare require emergency action relative to the entity, the director shall notify the director of the department of insurance and may request that the department of insurance take appropriate actions.