New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT

25 BEAVER STREET
NEW YORK, NEW YORK 10004

Eliot Spitzer
Governor
Eric R. Dinallo
Superintendent

The Office of General Counsel issued the following opinion on April 20, 2007 representing the position of the New York State Insurance Department.

RE: Managed Long Term Care Plans (MLTCP) Appointing Insurance Agents for Medicare Advantage Program

QUESTION PRESENTED:

May a Managed Long Term Care Plan (MLTCP) that has a Certificate of Authority from the New York State Department of Health (DOH) and that offers a Medicare Advantage (MA) program appoint insurance agents to market its MA program only?

CONCLUSION:

Yes. A Managed Long Term Care Plan that holds a Certificate of Authority from the New York Department of Health (DOH) pursuant to § 4403-f of the Public Health Law and that offers a Medicare Advantage (MA) program may appoint agents under the Insurance Law to market its MA program only.

FACTS:

The inquirer reports that he is counsel to a New York not-for-profit corporation recognized under § 501(c)(3) of the Internal Revenue Code as a charitable organization. Since 1998, the organization has operated a demonstration MLTCP pursuant to a contract with DOH. On June 9, 2006, DOH awarded the MLTCP a Certificate of Authority pursuant to Public Health Law § 4403-f (McKinney Supp. 2007). In the same year, the organization applied to the Centers for Medicare and Medicaid Services (CMS) of the U.S. Department of Health and Human Services (US DHH) to operate an MA program. As part of that application, DOH’s Bureau of Managed Care provided a certification to CMS that the organization was a risk-bearing entity authorized to operate an MA program. Consequently, CMS awarded a contract to the MLTCP, and the program commenced enrollment of eligible individuals on January 1, 2007.

On January 8, 2007, the MLTCP contacted the New York State Insurance Department’s Licensing Bureau for approval to appoint marketing staff as insurance agents to market and sell the MA program only. The inquirer now seeks guidance from the Department’s Office of General Counsel about whether the Insurance Law permits an MLTCP that has a Certificate of Authority under Public Health Law § 4403-f, and that offers an MA program, to appoint insurance agents to market its MA program only.

ANALYSIS:

A "managed long term care plan" is an entity that has received a certificate of authority to provide, or arrange for, health and long term care services, on a capitated basis in accordance with the Public Health Law, for a specified population over the age of eighteen. New York Public Health Law § 4403-f (McKinney Supp. 2007).

The Public Health Law provides that an MLTCP is subject to the same provisions of the Insurance Law (and regulations promulgated thereto) that are applicable to health maintenance organizations (HMOs), to the extent that they are not inconsistent with the Public Health Law. Indeed, Public Health Law § 4403-f(5) reads as follows:

(a) A managed long term care plan or approved managed long term care demonstration shall be subject to the provisions of the insurance law and regulations applicable to health maintenance organizations, this article and regulations promulgated pursuant thereto. To the extent that the provisions of this section are inconsistent with the provisions of this chapter or the provisions of the insurance law, the provisions of this section shall prevail.

(b) Notwithstanding chapter thirty-nine of the laws of nineteen hundred ninety-seven, the provisions of this section shall apply to the chronic care management demonstration authorized by such chapter.

Insurance Law § 2101 defines an insurance agent as, among other things, an agent of an HMO issued a certificate of authority pursuant to Article 44 of the Public Health Law who acts as such in the solicitation of, negotiation for, or sale of, an HMO contract. Furthermore, Insurance Law § 2112 (McKinney 2007) requires every HMO doing business in this state to file a certificate of appointment in such form as the superintendent may prescribe in order to appoint insurance agents to represent such HMO. To the extent that an HMO may, under the Insurance Law, appoint agents to solicit for, negotiate, or sell an MA program, an MLTCP likewise may do the same.1 Therefore, an MLTCP such as the inquirer’s client that holds a Certificate of Authority pursuant to § 4403-f of the Public Health Law may appoint agents under the Insurance Law to market its MA program.

For further information you may contact Assistant Attorney Sapna Maloor at the New York City Office.

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1 I note that while an MLTCP may appoint agents for a Medicare Advantage product, it may not, under State Law, do so for any Medicaid product.  Neither the Public Health Law nor the Insurance Law provides that Medicaid is a product that a non-governmental agent may solicit, negotiate, or sell.