New York Codes, Rules and Regulations › Title 11 - INSURANCE › Chapter IV - Financial Condition Of Insurer and Reports to Superintendent › Subchapter B - Life Insurers › Part 101 - Standards For Financial Risk Transfer Between Insurers And Health Care Providers › Section 101.9 - Provisions required in health care provider agreements that transfer financial risk

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Every
				  financial risk transfer agreement between an insurer and a health care provider
				  shall specify that:
(1) the health care
				  provider's in-network capitation from the insurer must first be used for
				  medical and hospital services to be rendered by the health care provider and
				  its participating providers which derive from the financial risk transfer
				  agreement with the insurer, as well as necessary administrative costs
				  associated with such services;
(2)
				  the health care provider agrees that the superintendent, and the insurer, shall
				  have the right, from time to time, to inspect the health care provider's books
				  and records and that the superintendent may examine under oath any officer or
				  agent of such provider with respect to its use of the in-network capitation
				  funds received from the insurer and the provider's compliance with the terms
				  and conditions of the financial risk transfer agreement and the provisions of
				  this Part;
(3) the health care
				  provider agrees that on an annual basis, it will submit within 120 days of the
				  close of its fiscal year, to the insurer and the superintendent, a financial
				  statement in a form prescribed by the superintendent, sworn to under penalty of
				  perjury by the health care provider's chief financial officer, showing the
				  health care provider's financial condition at the close of its fiscal year,
				  together with an opinion of an independent certified public accountant (CPA) on
				  the financial statement of such health care provider. When reviewing the
				  financial condition of the health care provider the CPA's certification shall
				  represent whether the liabilities of the health care provider make adequate
				  provision for any additional liability that may insure to the health care
				  provider by virtue of its assumption of risk under a financial risk transfer
				  agreement or any similar transaction. The amount and adequacy of any such
				  liability (and a description of the procedures used by the CPA to determine
				  such liability) shall be disclosed and commented upon by the CPA in its
				  certification. The CPA shall also test check and report on the safeguards
				  adopted by the health care provider to ensure its compliance with requirements
				  of paragraph (1) of this subdivision. In rendering the required opinion, the
				  CPA may take into consideration the financial position of a guaranteeing parent
				  corporation, provided that the terms and conditions of such guarantee have been
				  reviewed by the CPA. In such cases, the opinion of the CPA on the health care
				  provider's financial statement shall state to what extent, if any, the CPA
				  relied upon the guarantee when rendering its opinion and to what extent the CPA
				  reviewed the financial position of the parent corporation. A copy of the
				  consolidated financial statement of the guaranteeing parent corporation for the
				  same fiscal year together with an opinion of an independent CPA on such
				  financial statement shall be attached to the CPA's opinion on the health care
				  provider's financial statement. Such financial statement and opinion shall be
				  available for public inspection at the office of the superintendent and the
				  principal office of the insurer;
(4) in-network capitation payments from the
				  insurer to the health care provider must be made on a monthly basis;
(5) no payment to the health care provider
				  shall be made by the insurer prior to the first day of the month for which the
				  payment relates;
(6) in the event
				  the insurer will be providing administrative services for the health care
				  provider in conjunction with such provider's assumption of financial risk, then
				  such services and the resulting charges must be set forth in writing (as part
				  of the financial risk transfer agreement or in a separate agreement) and if
				  such services include the remittance of claim payments due to participating
				  providers then such payments must be disbursed from the health care provider's
				  bank account; and
(7) in addition
				  to any other contractual provision affecting termination of the agreement, that
				  upon a satisfactory demonstration to the superintendent that the health care
				  provider is not, in a material way, adhering to the terms and conditions of the
				  financial risk transfer agreement, or the provisions of this Part; or that the
				  health care provider's condition is such that the further transaction of its
				  business will be hazardous to the insurer's subscribers; then with the approval
				  of the superintendent the insurer may make all or part of any monthly
				  in-network capitation payments due under the financial risk transfer agreement
				  into an escrow account approved by the superintendent which amounts shall
				  remain in escrow until such time as the superintendent determines that the
				  health care provider is complying with the terms and conditions of the
				  financial risk transfer agreement, or the provisions of this Part; or, after
				  notice and an opportunity to be heard, the superintendent determines (with the
				  advice of the commissioner in the case of an entity possessing a certificate of
				  authority under article 44 of the Public Health Law) that it is in the best
				  interest of subscribers to immediately terminate such agreement. Any
				  determination by the superintendent shall provide for the distribution of the
				  funds held in this escrow account and for the disposition of any financial
				  security deposit.