1. (a) The department has authority to conduct examinations of HMOs under the Insurance Code Articles 20A.05, 20A.12 and 20A.17. Such examinations may be to determine the financial condition ("financial exams"), quality of health care services ("quality of care exams"), or such other exams regarding compliance with laws affecting the conduct of business ("market conduct exams") of the HMO.
2. (b) On-site financial and market conduct examinations shall be conducted pursuant to the Insurance Code Article 1.15 and §7.83 of this title (relating to Examinations).

3. (c) On-site quality of care examinations shall be conducted pursuant to the following protocol:

   1. (1) Entrance conference. The assigned examiner shall hold an entrance conference with the HMO's administrative personnel or their designee before beginning the on-site examination.
   2. (2) Exit conference. Upon completion of the examination, the examiner shall hold an exit conference with the HMO's administrative personnel or their designee.
   3. (3) Written report of examination outcome. The examiner shall prepare a written report of the examination outcome. The department shall provide the HMO with the written report, and if any deficiencies are cited, then the department shall issue a letter outlining the due dates for the corrective action plan and corrective actions.

4. (d) The HMO shall provide a plan of correction for each deficiency cited in the letter outlining corrective action described in subsection (c) of this section.

   1. (1) If examiner cites serious deficiencies, the HMO shall provide the examiner with a signed plan of correction within one business day of written notice of deficiencies. The HMO's plan of correction shall provide up to 10 business days for correction of the deficiencies in accordance with severity of the deficiencies.
   2. (2) If the examiner cites potentially serious deficiencies, the HMO shall provide the examiner with a signed plan of correction within 10 business days of receiving written notice from the examiner specifying the deficiencies. The HMO's plan of correction shall provide for correction of these deficiencies no later than 30 days from the date of the exit conference.
   3. (3) If the examiner cites non-serious deficiencies, then the HMO shall provide a signed plan of correction to the department no later than 30 days from receipt of the written examination report. The HMO's plan of correction must provide for correction of these deficiencies no later than 90 days from the receipt of the written examination report.
5. (e) The department shall verify the correction of deficiencies by submitted documentation or by on-site examination.
6. (f) This section does not apply to complaint investigations conducted under the Insurance Code Article 20A.12A.

Source Note:The provisions of this §11.303 adopted to be effective November 2, 1998, 23 TexReg 11347.