This sets out the minimum quality standards HMOs must meet. The HMO must set up internal peer review mechanisms, and the Department will conduct annual external reviews. The Department has a HMO Quality Assurance Unit directed by the Quality Assurance Medical Director, who must be a licensed physician. If the Unit finds an HMO is not meeting the quality standards, it may isue fines and penalties. For a covered service rendered to an enrollee of a HMO by a health care provider not under written contract with the HMO, the HMO or its agent shall pay the provider or the claim submitted by the hospital or trauma center. The method for caluating the rate of pay is set out.

A health maintenance organization shall reimburse a hospital emergency facility and provider, less any applicable co-payments, for medically necessary services provided to a member or subscriber of the health maintenance organization if the health maintenance organization authorized, directed, referred, or otherwise allowed the member or subscriber to use the emergency facility and the medically necessary services are related to the condition for which the member was allowed to use the emergency facility.