1. (a) As used in this subchapter, a managed care organization is an entity holding a certificate of authority to operate as an HMO under Chapter 20A of the Texas Insurance Code or as an approved nonprofit health corporation under Article 21.52F of the Texas Insurance Code.
2. (b) Any managed care organization or other entity providing the services specified in 42 United States Code §1396b(m)(2)(A) and participating in the State Medicaid Program (all hereinafter referred to as a "MCO") must first comply with the requirements and solvency standards set forth in this subchapter, and must not be in a hazardous financial condition as defined in Article 20A.19 of the Texas Insurance Code or Chapter 8 of this title (relating to Early Warning System for Insurers in Hazardous Condition) where pertinent to managed care organizations. In addition, any MCO already subject to regulation of any kind, must be in compliance with any solvency standard and/or requirement pertinent to its regulation, as well as all applicable licensing laws and regulations.
3. (c) Notwithstanding any other provision in this subchapter, if a MCO had a Medicaid contract in effect immediately prior to August 1, 1996 and if that MCO is subject to this subchapter, then that MCO must comply with the requirements in this subchapter within one year after becoming subject to this subchapter.

Source Note:The provisions of this §11.1801 adopted to be effective December 3, 1996, 21 TexReg 11377.