§ 438.706 Special rules for temporary management.

(a) Optional imposition of sanction. If the State imposes temporary management under § 438.702(a)(2), the State may do so only if it finds (through onsite surveys, enrollee or other complaints, financial status, or any other source) any of the following: (1) There is continued egregious behavior by the MCO, including but not limited to behavior that is described in § 438.700, or that is contrary to any requirements of sections 1903(m) and 1932 of the Act. (2) There is substantial risk to enrollees' health. (3) The sanction is necessary to ensure the health of the MCO's enrollees— (i) While improvements are made to remedy violations under § 438.700. (ii) Until there is an orderly termination or reorganization of the MCO. (b) Required imposition of sanction. The State must impose temporary management (regardless of any other sanction that may be imposed) if it finds that an MCO has repeatedly failed to meet substantive requirements in sections 1903(m) or 1932 of the Act, or this subpart. The State must also grant enrollees the right to terminate enrollment without cause, as described in § 438.702(a)(3), and must notify the affected enrollees of their right to terminate enrollment. (c) Hearing. The State may not delay imposition of temporary management to provide a hearing before imposing this sanction. (d) Duration of sanction. The State may not terminate temporary management until it determines that the MCO can ensure that the sanctioned behavior will not recur.