Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-080 - LIABILITIES OF HEALTH MAINTENANCE ORGANIZATIONS › Section 482-1-080-.04 - Definitions

Current through Register Vol. 42, No. 9, June 28, 2024
The following are the meanings to be applied to the terms used
				in this chapter:
(1) Uncovered
			 Expenditures. The costs of health care services which are covered by a health
			 maintenance organization, for which an enrollee would also be liable in the
			 event of the organization's insolvency.
(2) Covered expenditures. Liabilities for the
			 costs of health care services not included in uncovered expenditures.
(3) Accounts payable. Amounts due to
			 creditors for the acquisition of goods and services on a credit basis from
			 trade and other vendors other than health care providers.
(4) Accrued inpatient claims. Hospital and
			 institutional care claims incurred which are not reported and/or booked as
			 payables, including Incurred But Not Reported Claims.
(5) Accrued Physician Claims. Claims incurred
			 for physicians and ancillary services (such as laboratory and x-ray) by
			 providers under an arrangement with the Health Maintenance
			 Organization.
(6) Accrued Referral
			 Claims. Claims incurred for health care provider consultants and for referrals
			 to providers outside a Health Maintenance Organization arrangement or for a
			 professional service contract which is usually paid on a fee-for-service basis
			 outside of the usual contractual provider arrangements of the HMO.
(7) Accrued Other Medical Expenses. Other
			 incurred medical expenses including emergency room, out-of-area services,
			 payroll and other miscellaneous medical expenses.
(8) Accrued Medical Incentive Pool. The
			 accrual for withheld funds from individual practice associations, other medical
			 groups or other such arrangements in which the Health Maintenance Organization
			 may return incentive funds to providers.
(9) Unearned Premium. Income received or
			 booked in advance of the applicable payment period for which a liability exists
			 to render services in the future.
(10) Loans and Loans Payable. The principal
			 amounts on loans signed by the Health Maintenance Organization or for which the
			 Health Maintenance Organization is liable and are amounts which include federal
			 loans.
(11) Capital. The par value
			 of stock; the stated amount of owner's direct equity in the Health Maintenance
			 Organization for a stock HMO. For a partnership HMO, capital shall mean the
			 amount of the partners' equity or ownership accounts.
(12) Restricted Funds. Funds of the Health
			 Maintenance Organization which have been dedicated to specific groups or
			 purposes by the Health Maintenance Organization's governing body. This includes
			 but is not limited to declared dividends and group trust accounts.
(13) Capital Account. Capital Account of an
			 HMO shall be defined as the total of paid-in stated capital which is the total
			 of the par value for stock having par value or the amount of the consideration
			 received by the corporation for all shares of the corporation without par value
			 which have been issued plus such amounts which have been transferred to stated
			 capital in a manner permitted by law for a corporation or the total of the
			 partners' equity account in the case of a partnership. The amount shall not be
			 less than $100,000 for any licensed HMO and shall be maintained without
			 diminution or impairment while the HMO is licensed. This is the legal capital
			 of the HMO.
(14) Impairment or
			 Insolvency. A Health Maintenance Organization shall be deemed to be impaired or
			 insolvent when the HMO does not possess admitted assets at least equal to its
			 liabilities and capital account. A Health Maintenance Organization shall be
			 rehabilitated, liquidated or conserved under any of the reasons as set forth in
			 Sections 27-21A-18 and
			 27-32-6,
Code of Ala.
			 1975
.
(15) Admitted
			 Assets. Those assets which are assets which are legally admissible assets of
			 life insurers and include assets as allowable only in the amounts and
			 qualifications as described in Sections
			 27-41-1,
et
seq
.,
Code of
			 Ala. 1975
. The valuation of admissible assets are as determined
			 according to Sections
			 27-37-1,
et
seq
.,
Code of
			 Ala. 1975
. Any investment limitations based on a life insurance
			 company's capital and surplus in these preceding sections shall instead be
			 based on the capital account and deposit requirement amounts found in Section
			 27-21A-12
Code of Ala.
			 1975
.
(16) Uncovered
			 liabilities. Obligations resulting from unpaid uncovered expenditures, the
			 outstanding indebtedness of loans which are not specifically subordinated to
			 uncovered medical and health care expenses or guaranteed by the sponsoring
			 organization (guaranteeing person), and all other monetary obligations which
			 are not similarly subordinated or guaranteed by subordination agreements,
			 sponsoring organization guarantees, or other arrangements these covered
			 expenditures, subordinated indebtedness, guarantees, and other arrangements
			 must be acceptable to the Commissioner and must be accepted by written approval
			 of the Commissioner.
Author:
Commissioner of Insurance
Statutory Authority:
Code of Ala.
				  1975
, §§
										27-21A-19,
				  27-2-17.