# Title 26.1 — Insurance

## Chapter 26.1-49 — Health Provider Cooperatives

### § 26.1-49-01. Definitions.

As used in this chapter:
1. "Commissioner" means the insurance commissioner.
2. "Health care provider" means any person or institution licensed to provide health care
services in this state.
3. "Health provider cooperative" means a corporation organized under this chapter and
operated on a cooperative plan to provide health care services to purchasers of those
services.
4. "Member" means a licensed health care provider or an organization owned, controlled,
or affiliated with a health care provider, including without limitation, a professional
corporation, partnership, or other similar organization.
### § 26.1-49-02. Organization - Licensure.

A health provider cooperative shall organize under chapter 10-15 unless otherwise provided
in this chapter. After incorporation the health provider cooperative is subject to chapter 10-15
unless otherwise provided in this chapter. If a provision of this chapter conflicts with chapter
10-15, the provision of this chapter applies. A health provider cooperative organized under this
chapter is not an insurance company under chapter 26.1-12, a health maintenance organization
under chapter 26.1-18.1, or a nonprofit health service corporation under chapter 26.1-17. A
health provider cooperative does not violate limitations on the corporate practice of medicine.
### § 26.1-49-03. Powers.

In addition to the powers granted a cooperative under chapter 10-15, a health provider
cooperative has the powers granted a nonprofit corporation under chapter 10-33. The power
granted under chapter 10-15 controls over any inconsistent power granted by chapter 10-33.
### § 26.1-49-04. Provider contracts.

A health provider cooperative and its members may execute service contracts permitting the
provider members to provide some or all of their health care services through the health
provider cooperative to the enrollees, members, subscribers, or insureds of a nonprofit health
service plan, health maintenance organization, accident and health insurance company, or the
state medical assistance program. Each purchaser may execute contracts for the purchase of
health services from a health provider cooperative in accordance with this section. A contract
between a health provider cooperative and a purchaser must provide for payment by the
purchaser on a substantially capitated or similar risk-sharing basis.
1. Every contract between a health provider cooperative and a purchaser must be in
writing and must provide that if the purchaser fails to pay for health care services as
set forth in the contract, the enrollee is not liable to the provider for any sums owed by
the purchaser.
2. A member provider, agent, or trustee, or assignee thereof, may not maintain any action
at law against an enrollee to collect sums owed by the purchaser.
### § 26.1-49-05. Contract filing - Approval.

The health provider cooperative shall file each contract between the cooperative and a
purchaser with the commissioner. The commissioner shall disapprove any contract:
1. In which the consideration paid for health services is unreasonably high in relationship
to the services provided.
2. That fails to include evidence of the specific procedures used to inform prospective
enrollees of any limitations imposed on the enrollee's right to receive care from a
health provider of the enrollee's choice.

3. Under which a health provider cooperative assumes a corridor of risk greater than
fifteen percent in its first year of operation, or greater than thirty percent in any year
thereafter.
Any actuarial costs incurred by the department in review of that filing must be borne by the
cooperative. The commissioner may adopt rules implementing this section.
### § 26.1-49-06. Election of directors - Vote by mail.

Directors of health provider cooperatives are elected under procedures set forth in chapter
10-15. A member may vote by mail for a director unless mail voting is prohibited for election of
directors by the articles or bylaws of the cooperative. The board of directors shall prescribe the
form of the ballot. The members shall mark the ballot for the candidate chosen and mail the
ballot to the cooperative in a sealed plain envelope inside another envelope bearing the
member's name. If the ballot of the member is received by the cooperative on or before the date
of the regular members' meeting, the ballot must be accepted and counted as the vote of the
absent member.
### § 26.1-49-07. State and federal governmental participation.

The state or federal government, or any entity or political subdivision of the state or federal
government, may be a member of a health provider cooperative. Any state or federal
governmental hospital may be a member of a health provider cooperative. With respect to
federal governmental participation:
1. A health provider cooperative may limit its enrollment to those persons entitled to care
under the federal program responsible for the health provider cooperative.
2. A health provider cooperative may request that the commissioner waive the eligibility
requirements for participation that are contrary to federal law or regulations.
3. The commissioner shall consult with federal officials to develop procedures to allow a
health provider cooperative to use the federal government as a guaranteeing
organization.
4. In developing and implementing initiatives to expand access to health care, the
commissioner must recognize the unique problems of veterans and consider methods
to reach underserved portions of the veteran population.
### § 26.1-49-08. Prohibited practices - Penalty.

1. It is unlawful for any person, company, or corporation or any agent, officer, or
employee thereof, to coerce or require any person to agree, either in writing or orally,
not to join or become or remain a member of any health provider cooperative as a
condition of securing or retaining a contract for health care services with the person,
firm, or corporation.
2. It is unlawful for any person, company, or corporation, or any combination of persons,
companies, or corporations, or any agents, officers, or employees thereof, to engage
in acts of coercion, intimidation, or boycott of, or any refusal to deal with, any health
care providing entity arising from that entity's actual or potential participation in a
health provider cooperative.
3. It is unlawful for any health provider cooperative to engage in any acts of coercion,
intimidation, or boycott of, or any concerted refusal to deal with any health plan
company seeking to contract with the cooperative on a competitive, reasonable, and
nonexclusive basis.
4. It is unlawful for any health provider cooperative to refuse membership to any licensed
health care provider or organization that applies for membership and that otherwise
agrees to the membership requirements of the health provider cooperative.
5. Any person violating subsections 1 through 4 is deemed to have committed a violation
of chapter 51-08.1 and is subject to the provisions, procedures, and penalties of that
chapter.
