New York Codes, Rules and Regulations › Title 10 - DEPARTMENT OF HEALTH › Chapter II - Administrative Rules and Regulations › Subchapter R - Health Maintenance Organizations › Part 98 - Health Maintenance Organizations › Subpart 98-1 - Managed Care Organizations › Section 98-1.11 - Operational and financial requirements for mcos

Current through Register Vol. 46, No. 28, July 10, 2024
(a) The
					 functions, activities and services undertaken and performed pursuant to the
					 MCO's article 44 certificate of authority shall be clearly distinguished from
					 any other function, activity or service through the maintenance of separate
					 records, reports and accounts for each such MCO function, activity or service.
					 The records, reports and accounts of each MCO shall be maintained separately
					 from those of other persons or MCOs in a holding company system. All records
					 pertaining to the article 44 certified MCO shall be maintained in New York
					 State.
(b) No funds shall be
					 transferred or loaned from the MCO article 44 business to any other business,
					 function or contractor of th e MCO, or to any subsidiary or member of the MCO's
					 holding company system or to any member or stockholder without the prior
					 approval of the commissioner and, except in the case of a PHSP, HIV SNP, PCPCP
					 or MLTC, the superintendent. Repayment of any such approved loans, to th e
					 extent required, shall be made in accordance with schedules approved by the
					 superintendent and commissioner. Any such transfers or loans shall require a
					 certification by the MCO that such transfer or loan is in compliance with and
					 does not violate any provision of any applicable law or regulation. However,
					 distributions from an MCO to any member or stockholder shall not be subject to
					 the provisions of this paragraph to the extent that such distribution was for
					 the sole purpose of reimbursing at least one of the members or stockholders for
					 income taxes paid resulting fro m income received by the MCO, or in the case
					 where one of the members or stockholders is a not-for-profit corporation, the
					 proportionate share of the distribution attributable to each member or
					 stockholder; such a distribution shall be permissible without the prior
					 approval of the commissioner as long as:
(i)
					 both prior to and subsequent to the distribution, the MCO has reserves in
					 excess of minimum requirements as prescribe d by this Part; and
(ii) such distribution is consistent with a
					 tax allocation agreement entered into between the MCO and its members or
					 stockholders.
(1) No such transfer or loan
					 shall be approved if the net worth of the MCO after the transfer or loan would
					 fall below 12.5 percent of its annual net premium income, and all such
					 transfers and loans must be accompanied by projections submitted by the MCO
					 showing that its net worth shall continue to meet or exceed 12.5 percent of
					 annual net premium income for two calendar years following the transfer or
					 loan.
(2) Notwithstanding the
					 provisions of paragraph (1) of this subdivision, no such proposed transfer or
					 loan made by any MCO that received 75 percent or more of its net premium income
					 from the New York State Medicaid, Family Health Plus, and Child Health Plus
					 programs during the last calendar year shall be approved if the net worth of
					 the MCO after such transfer or loan would fall below 15 percent of its annual
					 net premium revenue, and all such transfers and loans must be accompanied by
					 projections submitted by the MCO showing that its net worth shall continue to
					 meet or exceed 15 percent of annual net premium revenue for two calendar years
					 following the transfer or loan.
(3)
					 In order to ensure the availability of quality health services for an enrolled
					 population, the commissioner may waive the provisions of paragraphs 98.11(b)(1)
					 and (b)(2) should the proposed transfer of funds or loan be used to purchase a
					 controlling interest, or a substantial portion of the assets, of an MCO
					 certified to operate under article 44 of the Public Health
					 Law.