19 See NAIC White Paper, supra note 8, at 11. 20 See Painter, supra note 1, at 1070. 21 See Epstein, supra note 18, at 16; Painter, supra note 1, at 1070. 22 See Epstein, supra note 18, at 17. 23 See id. 24 See NAIC White Paper, supra note 8, at 11. 25 See YOUNGER ET AL., supra note 10, at 10; Painter, supra note 1, at 1070. 26 Recent estimates suggest that approximately 15% of existing HMOs are PSOs. See Terese Hudson, The Great Debate: Resolved, PSOs are Going to be Regulated. The Question Is, Will They Get What They Want?, MED. & HEALTH J., Jan. 20, 1996, available in LEXIS, Health Library, Rxmega File. 27 See . 28 See Ernst & Young, Navigating Through the Changing Currents (visited Nov. 7, 1997) ‹http://www.businessmonitor.co.uk/docs/proc/203/104CURR.html› (PSO survey). 29 See GA. COMP. R. & REGS. r. 33-20-1 (1996); Ericka L. Rutenberg, Note, (1996). 30 See , . 31 See MINN. STAT. ANN. § 331.1303 (West 1992). 32 See Ernst & Young, supra note 28. 33 See id. 34 Just 30% of the surveyed PSOs reported a profit in 1995. See id. 35 See id. PSOs “are taking on many of the characteristics that will allow them to compete with existing managed care companies.” Id. 36 See Mary Chris Jaklevic, Doc-Owned Health Plans Struggle to Go It Alone, MOD. HEALTHCARE, May 12, 1997, at 3, 14. Significantly, access to capital, including reserve amounts needed to acquire an HMO license, is cited as a major impediment that prevents PSOs from competing with sizable HMOs. See id.
251 See supra Part III.B.1-2. Although the White Paper does refer, in this context, to an NAIC document dealing specifically with ERISA, the absence of further discussion of ERISA preemption and direct contracting arrangements is somewhat conspicuous here. Apparently other readers have made this observation as well. See Meeting Minutes from Risk-Bearing Entities Working Group of the State and Federal Health Insurance Legislative Policy (B) Task Force 1 (Dec. 16, 1996) (on file with the NAIC). 252 See NAIC White Paper, supra note 8, at 27-28. 253 See id. at 28-32. 254 See Unland, supra note 12, at 65. 255 See supra Part IV.A.1-2. 256 See generally EHCIP Letter, supra note 94 (discussing the EHCIP’s views on the NAIC White Paper). 257 See id. 258 See id. 259 See id. 260 See id. 261 Id. The Employer Health Care Innovation Project (EHCIP) extends this argument to downstream arrangements as follows: “The risk to a consumer whose HMO contracts with an independent medical group to provide medical services for a capitation payment is defined by the capacity of the HMO to deliver promised benefits, and not by the financial condition of the medical group.” Id. 262 See supra notes 113-15 and accompanying text for the factors in Pireno. 263 See EHCIP Letter, supra note 94, at 2. 264 See id. 265 See id. 266 See id. The EHCIP has elaborated on this point elsewhere. See Memorandum from the Employer Health Care Innovation Project on Self-Insurance 1 (Mar. 14, 1996) [hereinafter EHCIP Project]. 267 See EHCIP Letter, supra note 94, at 2. However, “[u]nlike an insurance carrier that bears risk with little control over the delivery of services, a provider group will have substantial control over how services are provided.” Id.