HARRY HUGHES,

Governor

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(B) Is provided with an effective
incentive to avoid unnecessary inpatient utilization,
regardless of whether the individual physician members of
the group are paid on a fee—for—service or other basis; and

(4) Assures to its subscribers and members, the
Commissioner, and the Department of Health and Mental
Hygiene that one clearly specified legal and administrative
focal point or element of the organization is charged with
the responsibility of providing the availability,
accessibility and quality (including effective utilization)
of comprehensive health care services.

(f)   ["Person"] "ORGANIZATION" means any individual,
partnership, association, corporation, or other legal
entity.

(g)   r"Health care plan" (which may be referred to as a
"benefit package")] "BENEFIT PACKAGE" means the arrangement
through which health care services are A SET OF HEALTH CARE
SERVICES TO BE provided to a member under contracts which
entitle the member to the health care services provided
directly, or furnished through contracts or arrangements
with other persons, by a health maintenance organization.

844.

(a) The Commissioner shall issue a certificate of
authority, within 90 days of the filing of the application,
to any organization filing an application in conformity with
§ 843, upon payment of the prescribed fees, upon receipt of
official written notification from the Department of Health
and Mental Hygiene that the organization's proposed health
related services, operations and functions falling under the
regulatory jurisdiction of the Department appear to meet its
requirements or have been approved by the Department, and
upon being satisfied that:

(1)   The organization proposes to establish and
operate a bona fide health [care plan] MAINTENANCE
ORGANIZATION having the capability to provide health care
services in the geographic area proposed;

(2)   The proposed health [care plan] MAINTENANCE
ORGANIZATION is actuarially sound and the organization has
an adequate schedule of minimum tangible net equity. These
requirements may be satisfied by a finding that the
organization has made acceptable arrangements to provide all
or stipulated parts of health care services offered;

(3)   The terms of contracts, including any
medical assistance program contracts under "Subchapter

XVIII.  — Health Insurance for the Aged and Disabled"
(Medicare) 42 U. S. C. § 1395 et seq. (1970 Ed. and Supp.
III 1972), as amended from time to time, [and] "Subchapter

XIX. â€” Grants to States for Medical Assistance Programs"