Alabama Administrative Code › Title 560 - ALABAMA MEDICAID AGENCY › Chapter 560-X-64 - INTEGRATED CARE NETWORKS › Section 560-X-64-.06 - Solvency And Financial Requirements For Integrated Care Networks

Current through Register Vol. 42, No. 9, June 28, 2024
(1) The Integrated
			 Care Network (ICN) as a condition to the risk contract between the Medicaid
			 Agency and the ICN, shall maintain minimum capital, surplus, or any combination
			 thereof, of one million dollars ($1,000,000), unless otherwise specified by the
			 Medicaid Agency as provided in section (2).
(2) The Medicaid Agency may, in its sole
			 discretion, add to, reduce, or otherwise alter, amend, adjust, or modify the
			 minimum capital or surplus described in section (1) of this rule to account for
			 the level of financial and/or other risk the ICN bears with regard to the
			 populations to be served or the services to be provided by the ICN, or any
			 other factor the Agency considers relevant to the financial solvency of the
			 ICN.
(3) For purposes of section
			 (1) of this rule, an ICN's capital and surplus is the difference between the
			 admitted assets of the ICN and the liabilities of the ICN, determined as
			 follows:
(a) The classification and value of
			 the ICN's assets and liabilities shall be determined in accordance with
			 Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing
			 Standards (GAAS), as modified by the provisions of this section (3).
(b) For purposes of this rule, "admitted
			 assets" means only assets owned exclusively by the ICN consisting of:
1. Cash, including the true balance of
			 deposits in solvent banks and trust companies;
2. Bonds, notes, warrants, debentures, and
			 other evidences of indebtedness which are direct obligations of the United
			 States of America for which the full faith and credit of the United States of
			 America is pledged for the payment of principal and interest ("U.S. Treasury
			 Securities");
3. Investment grade
			 bonds or other evidences of indebtedness other than U.S. Treasury Securities,
			 satisfying standards approved by the Medicaid Agency;
4. Marketable equity securities, satisfying
			 standards approved by the Medicaid Agency;
5. Due or deferred Per Member Per Month
			 (PMPM) payments pursuant to the risk contract between the ICN and the Medicaid
			 Agency;
6. The acquisition cost of
			 land and depreciated cost of improvements thereon owned by the ICN and used in
			 connection with the performance of the risk contract, in excess of any
			 liabilities secured by encumbrances on such assets, in an aggregate amount not
			 greater than 50 percent of the required minimum capital and surplus of the ICN;
			 and
7. Such other assets as may be
			 approved by the Medicaid Agency.
(c) In addition to assets not described in
			 subsection 3(b) of this rule, an ICN's admitted assets shall not include:
1. Any single investment or asset, or any
			 combination of investments in or secured by the securities, obligations, and/or
			 property of one person, entity, or governmental unit, to the extent any such
			 investment or combination of investments would exceed 20 percent of the ICN's
			 admitted assets, provided that the foregoing restriction shall not apply to
			 U.S. Treasury Securities or cash; or
2. Goodwill and other intangible
			 assets.
(d) In any
			 determination of the capital and surplus of an ICN, liabilities to be charged
			 against the ICN's admitted assets shall include, in addition to other
			 liabilities chargeable in accordance with GAAP and GAAS:
1. The amount necessary to pay all of the
			 ICN's unpaid losses and claims incurred on or prior to the date of the
			 statement, together with the expenses of adjustment or settlement
			 thereof;
2. Federal, state, and
			 local taxes, expenses and other obligations due or accrued at the date of the
			 statement; and
3. Any additional
			 reserves for asset valuation contingencies or loss contingencies required by
			 the Medicaid Agency.