NEW YORK STATE
INSURANCE DEPARTMENT

REGULATION NO. 164
(11 NYCRR 101)

STANDARDS FOR FINANCIAL RISK TRANSFER BETWEEN INSURERS

AND HEALTH CARE PROVIDERS

I, Gregory V. Serio, Superintendent of Insurance of the State of New York, pursuant to the authority granted by Sections 201, 301, 1102, 1109, Articles 32, 41, 42 and 43 of the Insurance Law and Section 4403(1)(c) of the Public Health Law, do hereby promulgate the following new Part 101 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York (Regulation No. 164), to take effect upon publication in the State Register, to read as follows:

(ALL MATERIAL IS NEW)

A new Part 101, entitled "Standards For Financial Risk Transfer Between Insurers And Health Care Providers" is added to Chapter IV, to read as follows:

Section 101.1 Purpose.

This Part implements, interprets and clarifies portions of Chapter 586 of the Laws of 1998, which, inter alia, amended Insurance Law sections 3217-b and 4325 to permit certain insurers, effective July 1, 1999, to enter into financial risk sharing agreements with health care providers. With respect to an insurer's contractual obligations to its subscribers and required solvency, this Part addresses an insurer's obligation to assess the financial responsibility and capability of providers to perform their obligations under certain financial risk transfer agreements, and sets forth standards pursuant to which health care providers may adequately demonstrate such responsibility and capability to insurers.

Section 101.2 Applicability.

Except as otherwise provided, this Part applies to entities certified under article 44 of the Public Health Law, insurance companies authorized to do accident and health insurance in the State of New York and corporations licensed pursuant to article 43 of the Insurance Law which enter into agreements to share financial risk through a capitation arrangement with health care providers. This regulation does not apply to risk sharing agreements among entities defined as insurers herein.

Section 101.3 Definitions.

(a) The term "capitation" or "capitation arrangement" shall mean contractually based prepayments (any payments made prior to the last day of the month shall be deemed a prepayment of the entire month’s capitation) made to a health care provider, on a per member per month or a percentage of premium basis, in exchange for one or more covered health care services to be rendered, referred or otherwise arranged by such provider and by its participating providers; however, the estimated part of the prepayment needed to provide the covered services to be referred or otherwise arranged by the health care provider to non-participating providers shall be deposited by the insurer into a separate account to be designated as the "out-of-network health care provider account" which account shall be maintained on the books of the insurer for the sole purpose of paying for the services covered by the capitation arrangement that were rendered by non-participating providers. Payments into such account shall be designated as "capitation outside of the health care provider’s network" and the payments made for services to be rendered by the health care provider and its participating providers shall be designated as the "health care provider’s in-network capitation."

(b) The term "financial responsibility" shall mean that, on a prospective basis, the health care provider has demonstrated to the insurer and the superintendent that it can faithfully perform its obligations under a financial risk transfer agreement by demonstrating its compliance with the provisions of this Part.

(c) The term "financial risk transfer" shall mean the contractual assumption of liability by the health care provider by means of a capitation arrangement for the delivery of specified health care services to subscribers of the insurer.

(d) The term "financial solvency" or "financially solvent" shall mean that the most recent health care provider’s financial statement or guaranteeing parent corporation’s consolidated financial statement evidences an excess of assets over liabilities and the health care provider has demonstrated to the satisfaction of the insurer and the superintendent that the health care provider has adopted and has in place the necessary safeguards to ensure that the health care provider’s in-network capitation will first be used for the payment of medical and hospital services to be rendered by the health care provider and its participating providers which derive from a financial risk transfer agreement, including any necessary administrative costs associated with the rendering of such services.

(e) The term "guaranteeing parent corporation" shall mean an entity that controls a health care provider and guarantees the performance of the provider’s obligations under the financial risk transfer agreement including the payment of any amounts owed by the health care provider to participating providers for services rendered pursuant to a risk transfer agreement. The guaranteeing parent corporation must include the financial condition of the controlled health care provider in its consolidated financial statement as required by section 101.9(a)(3) of this Part.

(f) The term "health care facility" shall mean a hospital as defined in and licensed under article 28 of the Public Health Law or a similar facility licensed under article 19, 31, or 32 of the Mental Hygiene Law.

(g) The term "health care provider" shall mean a person or entity licensed or certified pursuant to article 28, 36 or 40 of the Public Health Law; a facility licensed pursuant to article 19, 31 or 32 of the Mental Hygiene Law; a health care professional licensed, registered or certified pursuant to Title 8of the Education Law (including a group of such health care professionals); a clinical laboratory certified pursuant to Title V of the Public Health Law; and a dispenser or provider of pharmaceutical products, healthcare services or durable medical equipment. A "health care provider" shall also include a "health care facility" and an "intermediary entity" as defined in this section.

(h) An "insurer" shall mean an insurance company licensed to do accident and health insurance, a corporation licensed pursuant to article 43 of the Insurance Law or an entity possessing a certificate of authority under article 44 of the Public Health Law.

(i) The term "intermediary entity" shall mean a person or entity which enters into a financial risk transfer agreement with one or more insurers and who contracts with one or more participating providers to perform the services which are set forth in the financial risk transfer agreement. When the insurer is an entity certified pursuant to article 44 of the Public Health Law, the term shall also mean an Independent Practice Association.

(j) The term "participating provider" shall mean the person or entity who is contractually obligated to the health care provider to provide the services that are covered by the insurer’s financial risk transfer agreement with such health care provider.

(k) The term "subscriber" shall mean an enrollee, a policyholder or a contract holder.

(l) The term "withhold" shall mean a percentage of payments or set dollar amounts deducted from a health care provider's contractual payment and that may or may not be returned to the health care provider, depending on specific predetermined factors, including any necessary approvals by the insurer's board of directors.

(m) The definitions contained in section 107 of the Insurance Law and Part 98-1.2 of Title 10 shall also apply to this Part.

Section 101.4 Requirements for risk transfer, insurer reporting, and superintendent’s approval.

(a) An insurer may not enter into a financial risk transfer agreement with a health care provider unless all agreements between such health care provider and any participating provider contain the following provisions:

(1) A participating provider will not, in the event of default by the health care provider, demand payment from the insurer for any covered services rendered to the insurer’s subscribers for which the in-network capitation payment was made by the insurer to the health care provider pursuant to the financial risk transfer agreement;

(2) A "hold harmless" provision that prohibits a participating provider from collecting or attempting to collect from a subscriber any amounts owed to such participating provider for covered services, but excluding any amounts owed by the subscriber to the provider pursuant to the subscriber’s contract, it being understood that such a "hold harmless" is in addition to the protections afforded to subscribers under Insurance Law section 4307(d); and

(3) In the event the health care provider’s financial risk transfer agreement is terminated by the superintendent, pursuant to the provisions of section 101.9(a)(7) of this Part, the health care provider’s agreement with the participating provider must be assignable on a prospective basis (without any obligation to pay any amounts owed to the participating provider by the health care provider) to each insurer that entered into the financial risk transfer agreement with such health care provider for a period of time which is determined by the Commissioner of Health, as respects entities certified pursuant to article 44 of the Public Health Law, or by the superintendent as respects all other insurers, to be necessary in order to provide the services that the insurer is legally obligated to deliver to its subscribers. However, no such assignment shall exceed twelve months from the date the financial risk transfer agreement is terminated by the superintendent.

(b) Notwithstanding any agreement to the contrary, the insurer retains full financial risk on a prospective basis for the provision of health care services pursuant to any applicable policy or contract. At all times, the insurer must be able to demonstrate to the satisfaction of the superintendent that the insurer can fulfill its non-transferable obligation to provide coverage for health care services to subscribers in any event, including the failure, for any reason, of a financial risk transfer agreement with a provider. In considering whether an insurer has satisfied its obligation to retain full financial risk, on a prospective basis, the superintendent shall consider the financial condition of the insurer and the health care provider, including a review of income and expenses, quality and liquidity of assets, establishment of adequate claim and other reserves, net worth, and any financial security deposit, as defined in section 101.5(b) of this Part, established by the health care provider.

(c) An insurer who uses a capitation arrangement to transfer all or part of its financial risk to a health care provider must do so by means of a contract approved by the superintendent. Before granting such approval the insurer shall have demonstrated to the satisfaction of the superintendent the financial responsibility of the health care provider to render the services covered by the in-network capitation and compliance with the provisions of this Part. If so demonstrated, the insurer is relieved of the reporting requirements for carrying a liability on its own balance sheet for underlying unpaid claims and expenses related to in-network capitated payments made pursuant to the financial risk transfer agreement. However, where a capitated arrangement contains a provision whereby retroactive payments may be made by the insurer for adverse in-network experience of the health care provider, or where the insurer is financially responsible for the payment of claims which exceed amounts set forth in the financial risk transfer agreement, then in both cases the insurer must report an unpaid claim liability on its balance sheet that is adequate to meet its contractual exposure. Amounts deposited into the out-of-network health care provider account may be used by the insurer to offset the liability on its balance sheet for underlying claims and expenses related to non-participating provider out-of-network claims. Any such offsetting shall be done on a basis which compares the liability established on the insurer’s balance sheet for each health care provider’s out-of-network claims and expenses with the amount in such health care provider’s out-of-network account. Amounts deposited in such account shall be reconciled at least annually with such health care provider’s out-of-network incurred claims and expenses for the period covered by the reconciliation and any excess in the account shall be remitted to or otherwise settled with such provider within six months of the ending date of the reconciliation period. In the event the reconciliation reports a deficit, then the insurer shall bill such deficit or otherwise settle such deficit with the health care provider within six months of the ending date of the reconciliation period.

(d) Any amount due to an insurer from a health care provider, pursuant to a financial risk transfer agreement or any risk sharing arrangement which is not otherwise subject to the provisions of this Part, that is not paid or otherwise satisfied within 90 days from the date the receivable is entered on the insurer’s books of account shall not be admitted nor used as an offset on financial statements filed by the insurer with this Department.

(e) Financial risk sharing effected under a contract between an insurer and a health care provider shall not be subject to the provisions of this Part when payments, subject to a withhold by the insurer, occur subsequent to the date that the health care provider rendered the service which is covered by the contract.

(f) Where the financial risk transfer agreement includes payment by the insurer of administrative expenses incurred by the health care provider, and such expenses include expense items which the insurer is required to report as a claim adjustment or general administrative expense on its financial statements filed with the superintendent, then such expense shall be included by the insurer as a claim adjustment or general administrative expense in such financial statements and for determining compliance with any applicable loss ratio standards.

(g) Financial risk transfer arrangements which are in effect on the effective date of this Part and which receive all necessary Department of Health approvals, may continue in effect without having to meet the requirements of this Part except that the health care provider must comply with the provisions of section 101.9(a)(3) of this Part as respects the filing of audited financial statements for fiscal years which close on or after the effective date of this Part, until the contract renewal date; however, for agreements which are either automatically renewed or whose renewal date is more than thirty-six months after the effective date of this Part, the exemption from meeting all of the other requirements of this Part, including obtaining the superintendent’s approval, shall not extend beyond thirty-six months.

(h) The superintendent shall act upon any request for approval, within thirty days of receipt provided such submission includes: a certified financial statement of the health care provider prepared in accordance with section 101.9(a)(3) of this Part which evidences financial solvency including a demonstration of any necessary safeguards which may be required to be in place pursuant to the definition of financially solvent; a copy of any guarantee issued by the guaranteeing parent corporation; twelve month financial projections of the health care provider which reflect the inclusion of the proposed transfer; a demonstration of the health care provider’s financial responsibility; and a certification executed by all parties to the financial risk transfer agreement that such agreement complies with the provisions of this Part, that any agreement between the health care provider and its participating providers meets the standards set forth in section 101.4(a) of this Part, and, if such agreement is to be entered into by an entity certified under Article 44 of the Public Health Law, a statement that such agreement has been filed with the Department of Health.

Section 101.5 Demonstration of financial responsibility.

(a) No agreement to transfer financial risk through a capitation arrangement may be entered into between an insurer and a health care provider unless such health care provider is financially responsible by virtue of having met the standards set forth in this section.

(b) Financial security deposit. The financial security deposit required by this Part ("required amount") shall at all times be at least equivalent to twelve and one half (12.5%) percent of the estimated annual in-network capitation revenue to be received from the insurer under the financial risk transfer agreement then in force, and may consist of either securities in trust, a letter of credit or funds held by the insurer as described below or a combination of securities, a letter of credit, funds held and a provider stop loss insurance policy or other acceptable means which complies with the requirements of this Part. For purposes of this section, the estimated annual in-network capitation to be paid to a financially solvent health care provider pursuant to a capitation arrangement with the insurer shall exclude that portion of the capitation revenue which will be required to pay for the health care services to be rendered: directly by the health care provider which is not an intermediary entity; directly by the health care provider’s guaranteeing parent corporation if such parent is a health care facility; by the employees of the health care provider; by the employees of the health care provider’s guaranteeing parent corporation if such parent is a health care facility; by any participating provider who is paid pursuant to a capitation arrangement with the health care provider (provided that payment to the participating provider is made no later than the first day of the month following its receipt by the health care provider); or by any participating provider who is paid a salary pursuant to a contractual arrangement with the health care provider.

(1) Securities in trust.

(i) Securities which shall be held in trust for the insurer in compliance with the requirements of sections 126.2, 126.3, 126.4 and 126.5 of Part 126 of this Title (Regulation 114).

(ii) If the aggregate market value of the securities in trust shall fall below the required amount, the insurer must require the health care provider to immediately deposit with the trustee additional securities of like character.

(2) Letter of credit.

(i) A letter of credit, with the insurer as beneficiary, which shall comply with the requirements of sections 79.1, 79.2 and 79.3 of Part 79 of this Title (Regulation 133).

(ii) If the face value of the letter of credit shall fall below the required amount, the insurer must require the health care provider to immediately increase the value of the letter of credit.

(3) Funds held by the insurer. Amounts (funds) which are owed by the insurer to a health care provider pursuant to a risk sharing arrangement and which are reported as a liability on the insurer’s books of account may qualify as a financial security deposit if the insurer and health care provider agree that such amounts shall be subject to the provisions of this Part which govern a financial security deposit. To effectuate compliance with this paragraph the insurer shall deposit cash up to the amount of such payable into a separate account to be maintained in the form of cash or cash equivalents and such account shall be subject to the provisions of subdivisions (e) and (f) of this section. The funds in this account, including any interest accrued thereon shall be held by and under the control of the insurer and have a market value at least equal to the required amount.

(4) Provider stop loss insurance. If a health care provider elects to meet a portion of its financial responsibility requirement by purchasing a provider stop loss insurance policy approved by the superintendent, then the amount of the provider stop loss insurance coverage, net of any retention amounts or participation limits to be paid by the health care provider, may be used to offset up to 50 per cent of the required financial security deposit. Under this paragraph a health care provider may only use aggregate provider stop loss insurance. The participating provider shall have no beneficial interest in such stop loss coverage.

(5) In lieu of the provider stop loss insurance, the superintendent may permit the use of other acceptable means which the superintendent determines would provide the insurer with protection equivalent to provider stop loss insurance. Any such means shall be approved by the superintendent and comply in substance with the minimum provisions and requirements set forth in this Part for provider stop loss insurance.

(c) A health care provider will be eligible for the elimination of the otherwise applicable financial security deposit where:

(1) In the case of a health care provider under contract with one or more entities certified pursuant to article 44 of the Public Health Law, including the line of business HMO of an Insurance Law article 43 Corporation, the financial statement of the health care provider, as required by section 101.9(a)(3) of this Part, evidences that the amount of liquid assets (cash and marketable securities) and the net worth of the health care provider or the consolidated liquid assets and net worth of the parent corporation of the health care provider, in cases where the health care provider's obligations have been guaranteed by the parent corporation, are equal to or exceed five per cent of the health care provider's total estimated annual in-network capitation revenue from all article 44 entities;

(2) In the case of a health care provider under contract with one or more insurance companies, including the non-HMO business written by article 43 corporations, the financial statement of the health care provider, as required by section 101.9(c) of this Part, evidences that the amount of liquid assets (cash and marketable securities) and the net worth of the health care provider or the consolidated liquid assets and net worth of the parent corporation of the health care provider, in cases where the health care provider's obligations have been guaranteed by the parent corporation, is equal to or exceeds: i) in the case of liquid assets, five percent of the health care provider’s total estimated annual in-network capitation revenue from all insurance companies, and ii) in the case of net worth, 12.5 percent of the health care provider’s total estimated annual in-network capitation revenue from all insurance companies; or

(3) In the case of a health care provider who is receiving capitation from more than one type of licensee (e.g. HMO and accident and health insurer) must evidence compliance with the standards set forth in paragraph one of this subdivision for capitation received from entities certified pursuant to article 44 of the Public Health Law and compliance with the standards set forth in paragraph two of this subdivision for capitation received from insurance companies.

(d) During the first year that a financial risk transfer agreement is in effect the amount of the required securities in trust, letter of credit, or funds held as set forth in paragraph (b) of this section, may be accrued over a period of time not to exceed twelve months; provided that at the end of three months the amount shall not be less than 25%, at the end of six months shall not be less than 50%, at the end of nine months shall not be less than 75% and after one year shall not be less than 100% of the amount required.

(e) All proceeds from the financial security deposit which are received by the insurer or, as respects funds held by the insurer, which are maintained by the insurer in a separate account shall be held by the insurer and only used to indemnify itself for any amounts owed by the health care provider pursuant to the underlying financial risk transfer agreement and, notwithstanding section 101.4(a)(1) of this Part, to indemnify participating providers for any amounts which are owed by the health care provider for services rendered to the insurer’s subscribers who are covered by the underlying financial risk transfer agreement. However, any indemnification to the insurer for a deficit in the health care provider’s out-of-network escrow account shall be limited to the most recent twelve month period and any indemnification to participating providers shall not exceed the amount of such proceeds or funds. Any indemnification to the insurer or to eligible participating providers shall be pursuant to a plan approved by the superintendent which plan shall provide that distributions to eligible participating providers shall commence within ninety days of the insurer’s receipt of the proceeds or the transfer of the funds from the separate account. Such plan shall provide for the return of any such proceeds or funds to the health care provider after satisfaction of all amounts due to the insurer and participating providers, as set forth in this subdivision.

(f) Release of the financial security deposit. The required financial security deposit shall be maintained until such time as the underlying financial risk transfer agreement terminates or is cancelled, in accordance with the terms of such agreement; or until the health care provider qualifies for the elimination of the financial security deposit, pursuant to the provisions of subdivision (c) of this section. In the event of termination or cancellation, the necessary financial security deposit shall be released periodically by the insurer in accordance with the calculation of the required amount and after the insurer has given due consideration to any projected out-of-network deficit and any amounts which may be due to participating providers by the health care provider. To the extent such deposit was funded using a provider stop loss insurance or other acceptable means, then the amount of any release shall first be applied to that part of the deposit which was satisfied by the stop loss insurance or other acceptable means. The provisions of this subdivision shall not apply to a financial security deposit where the underlying financial risk transfer agreement was terminated by the superintendent pursuant to the provisions of section 101.9(a)(7) of this Part.

Section 101.6 Provider stop loss insurance.

(a) No stop loss insurer may issue or deliver in this state a policy of provider stop loss insurance unless the insurer is authorized to issue a provider stop loss insurance policy in this state; pursuant to the provisions of section 4237-a of the Insurance Law.

(b) No policy of provider stop loss insurance shall permit the stop loss insurer to rescind the policy and no insurer shall rescind such policy.

(c) No policy of provider stop loss insurance may be issued or delivered in this state unless the policy, in substance provides:

(1) That the termination of the policy shall not affect or reduce the stop loss insurer's obligation to, or responsibility for, coverage to health care providers for covered claims which occurred during the term of the policy.

(2) That in the event of the termination of the financial risk transfer agreement by the superintendent, pursuant to the provisions of section 101.9(a)(7) of this Part, the insurer is the designated beneficiary for subscribers covered by the stop loss insurance coverage for incurred but unpaid benefits for the time frame for which in-network capitation payments were received by the health care provider.

(3) That the stop loss insurer will provide notice (whether initiated by insured or the stop loss insurer) of termination, cancellation, non-renewal, or material change to the terms of the coverage, to the health care provider and insurer at least ninety days prior (or forty-five days notice of cancellation for non-payment of premium) to the effective date of the notice.

Sections 101.7 Filing of evidence of provider stop loss insurance.

If a health care provider elects to purchase a provider stop loss insurance policy to satisfy, in part, the requirements of this Part, the stop-loss insurer shall provide the insurer and superintendent with evidence that appropriate coverage is in effect, in the form of a certificate of insurance which shall specify:

(a) The name of the stop loss insurer which issued the policy;

(b) The policy form number;

(c) The name of the insured;

(d) The effective dates of the policy;

(e) The applicable policy limits;

(f) The applicable retention amounts and participation limits, if any; and

(g) That the terms and conditions of the insurance policy conform with all of the requirements of this Part.

Section 101.8 Provider stop loss insurance policy; notice to the superintendent.

(a) Notice to the superintendent of the termination, cancellation, or non-renewal of the provider stop loss insurance policy and, notice of any material change to the terms of the coverage, shall be in writing and shall be mailed or delivered to the superintendent at the following address:

New York State Insurance Department
Health Bureau
25 Beaver Street
New York, N.Y. 10004

(b) With respect to notice of termination, cancellation, non-renewal or material change of the terms of the coverage, the notice shall be mailed or delivered to the superintendent at least ninety days prior (or forty-five days for notice of cancellation for non-payment of premium) to the effective date of the notice. A copy of the notice issued to the insured shall accompany the notice to the superintendent.

Section 101.9 Provisions required in health care provider agreements that transfer financial risk.

(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 inure 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.

(b) Contracts with health care providers entered into by insurers licensed pursuant to the Insurance Law shall also include any other provisions required by the Insurance Law or any regulations thereunder and provider contracts entered into by entities certified by article 44 of the Public Health Law shall continue to be subject to all the applicable requirements contained in said article and Part 98-1 of Title 10.

Section 101.10 Exemptions.

A financial risk transfer agreement whereby the health care provider receives projected in-network capitation from an individual insurer, during any consecutive twelve month period, of no more that $250,000, shall be exempt from the provisions of this Part. A financial risk transfer agreement whereby the health care provider receives projected in-network capitation from an individual insurer, during any consecutive twelve month period, of more than $250,000 but less than $1,000,000, shall only be exempt from the following provisions of this Part:

(a) The need for the superintendent’s approval of the financial risk transfer agreement, including the need to demonstrate to the superintendent the financial responsibility of the health care provider, as set forth in section 101.4(c) of this Part; and

(b) The provisions of section 101.9(a)(3) of this Part as respects the requirements for the filing of the health care provider’s financial statement and the CPA opinion thereon with the superintendent.

I, Gregory V. Serio, Superintendent of Insurance, do hereby certify that the foregoing is the new 11 NYCRR 101 (Regulation 164), promulgated by me on August , 2001 pursuant to the authority granted by Sections 201, 301, 1102, 1109, Articles 32, 41, 42 and 43 of the Insurance Law and Section 4403(1)(c) of the Public Health Law, to take effect upon publication in the State Register.

Pursuant to the provisions of the State Administrative Procedure Act, prior notice of the proposed amendment was published in the State Register on June 13, 2001. No other publication or prior notice is required by statute.

 

__________________________________________

Gregory V. Serio
Superintendent of Insurance

August 1, 2001