1. (a) Preemption of State law. Any provisions of State law that relate to the licensing of the organization and that prohibit the organization from providing coverage under a contract as specified in this subpart, are superseded.

2. (b) Consumer protection and quality standards.

   1. (1) A waiver of State licensure granted under this subpart is conditioned upon the organization's compliance with all State consumer protection and quality standards that—

      1. (i) Would apply to the organization if it were licensed under State law;
      2. (ii) Generally apply to other MA organizations and plans in the State; and
      3. (iii) Are consistent with the standards established under this part.
   2. (2) The standards specified in paragraph (b)(1) of this section do not include any standard preempted under section 1856(b)(3)(B) of the Act.
3. (c) Incorporation into contract. In contracting with an organization that has a waiver of State licensure, CMS incorporates into the contract the requirements specified in paragraph (b) of this section.
4. (d) Enforcement. CMS may enter into an agreement with a State for the State to monitor and enforce compliance with the requirements specified in paragraph (b) of this section by an organization that has obtained a waiver under this subpart.

[63 FR 25377, May 7, 1998]