Transfer of HMO regulation to Insurance Commission

The regulation and supervision of Health Maintenance Organizations (HMOs) are officially transferred from the Department of Health (DOH) to the Insurance Commission (IC).
This includes oversight of establishment, operations, and financial activities of HMOs.

An HMO is a juridical entity legally organized to provide or arrange for pre-agreed health care services to enrolled members.
Such services are provided for a fixed prepaid fee over a specified period.
This definition aligns with DOH Administrative Order No. 34 (1994).

The IC is authorized, in coordination with the Department of Budget and Management, to streamline and augment its human resources.
This is to enable IC to effectively execute its regulatory functions over HMOs.

Issue rules on minimum capitalization, net worth, reserve funds, security deposits, and qualification criteria for HMO officers and marketing personnel.
Set procedures for reportorial and examination requirements, contract registrations, claims adjudication, and other relevant matters.
Approve, amend, renew, suspend, decline, or revoke HMO licenses and registrations.
Fix, assess, collect, and utilize reasonable fees and charges related to regulatory functions.
Regulate, supervise, and monitor HMO operations to ensure compliance with applicable laws and directives.
Issue orders to prevent fraud and safeguard the interests of HMO members and stakeholders.
Conduct examinations of documents, records, financial statements, and other pertinent materials of HMOs and related parties.
Impose sanctions and penalties pursuant to existing laws, rules, and regulations.
Enlist and deputize law enforcement agencies when necessary for enforcement.
Issue directives such as appointment of conservators, receivers, or liquidators for non-compliant HMOs.
Prepare, approve, or amend rules, regulations, orders, and circulars.
Formulate policies, issue opinions, and supervise compliance related to the health maintenance industry.
Recommend legislative proposals and exercise other powers necessary to fulfill objectives of the order.

All types of HMOs (investor-based, community-based, cooperative) must procure a License to Operate from the IC.
Licenses or clearances previously issued by the DOH remain honored but may be subject to modifications.

Implementation funds come from the current appropriations of the IC.
Future funding requirements must be included in the IC's annual budget proposals.

The DOH and IC may enter into inter-agency agreements to ensure smooth transfer of HMO-related functions.
Temporary detail of DOH personnel to the IC is authorized for efficient transition.

All HMO-related books, contracts, records, and pending matters from the DOH are to be transferred to the IC.
The IC shall create a special team to manage these matters and must complete transfer of records within 90 days.
DOH personnel affected may continue with the DOH but may be detailed to the IC as needed.

An Oversight Committee with the Secretary of Finance as Chairman, and the Secretary of Health and the Insurance Commissioner as members is established.
The Committee's purpose is to oversee effective transfer of jurisdiction over HMOs.
The committee is dissolved on June 30, 2016.

The DOH retains jurisdiction over medical issues such as medical practice, procedures, standards, and health programs.
Medical and health service matters are to be referred back to the DOH.

The IC is mandated to create and implement necessary rules, regulations, and issuances to carry out this Order effectively.

Previous orders or issuances inconsistent with this Executive Order are repealed or modified accordingly.

Invalidity or unconstitutionality of any provision does not affect the validity of the remaining provisions.

The Order takes effect immediately upon publication in a newspaper of general circulation.