| (a) An HMO that delegates any function required by
Insurance Code Chapter 843 (concerning Health Maintenance Organizations)
and Chapter 1272 (concerning Delegation of Certain Functions by Health
Maintenance Organization), and other applicable insurance laws and
regulations of this state to a delegated entity must execute a written
agreement with that delegated entity.
(b) Written agreements must include:
(1) a provision that the delegated entity and any delegated
third parties must agree to comply with all statutes and rules applicable
to the functions being delegated by the HMO;
(2) a provision that the HMO will monitor the acts
of the delegated entity through a monitoring plan, which must be set
forth in the delegation agreement, and contain, at a minimum:
(A) provisions for the review of the delegated entity's
solvency status and financial operations, including, at a minimum,
review of the delegated entity's financial statements, consisting
of at least a balance sheet, income statement, and statement of cash
flows for the current and preceding year;
(B) provisions for the review of the delegated entity's
compliance with the terms of the delegation agreement as well as with
all applicable statutes and rules affecting the functions delegated
by the HMO under the delegation agreement;
(C) a description of the delegated entity's financial
practices in sufficient detail that will ensure that the delegated
entity tracks and timely reports to the HMO liabilities including
incurred but not reported obligations;
(D) a method by which the delegated entity must report
monthly a summary of the total amount paid by the delegated entity
to physicians and providers under the delegation agreement; and
(E) a monthly log, maintained by the delegated entity,
of oral and written complaints from physicians, providers, and enrollees
regarding any delay in payment of claims or nonpayment of claims pertaining
to the delegated function, including the status of each complaint;
(3) a statement that the HMO will use the monitoring
plan on an ongoing basis; compliance with this requirement must be
documented by the HMO maintaining, at a minimum:
(A) periodic signed statements from the individual
identified by the HMO in paragraph (23) of this subsection that the
HMO has reviewed the information required in the monitoring plan;
and
(B) periodic signed statements from the chief financial
officer of the HMO acknowledging that the most recent financial statements
of the delegated entity have been reviewed;
(4) a provision establishing the penalties to be paid
by the delegated entity for failure to provide information required
by this subchapter;
(5) a provision requiring quarterly assessment and
payment of penalties under the agreement, if applicable;
(6) a provision that the agreement cannot be terminated
without cause by the delegated entity or the HMO without written notice
provided to the other party and the department before the 90th day
preceding the termination date, provided that the commissioner may
order the HMO to terminate the agreement under §11.2608 of this
title (relating to Department May Order Corrective Action);
(7) a provision that requires the delegated entity,
and any entity or physician or provider with which it has contracted
to perform a function of the HMO, to hold harmless an enrollee under
any circumstance, including the insolvency of the HMO or delegated
entity, for payments for covered services other than copayments and
deductibles authorized under the evidence of coverage;
(8) a provision that the delegation agreement may not
be construed to limit in any way the HMO's responsibility, including
financial responsibility, to comply with all statutory and regulatory
requirements;
(9) a provision that any failure by the delegated entity
to comply with applicable statutes and rules or monitoring standards
permits the HMO to terminate delegation of any or all delegated functions;
(10) a provision that the delegated entity must permit
the commissioner to examine at any time any information the department
reasonably considers is relevant to:
(A) the financial solvency of the delegated entity;
or
(B) the ability of the delegated entity to meet the
entity's responsibilities in connection with any function delegated
to the entity by the HMO;
(11) a provision that the delegated entity, in contracting
with a delegated third party directly or through a third party, will
require the delegated third party to comply with the requirements
of paragraph (10) of this subsection;
(12) a provision that the delegated entity must provide
the license number of any delegated third party performing any function
that requires a license as a third party administrator under Insurance
Code Chapter 4151 (concerning Third-Party Administrators), or a license
as a utilization review agent under Insurance Code Chapter 4201 (concerning
Utilization Review Agents), or that requires any other license under
the Insurance Code or another insurance law of this state;
(13) if utilization review is delegated, a provision
stating that:
(A) enrollees will receive notification at the time
of enrollment identifying the entity that will be performing utilization
review;
(B) the delegated entity or delegated third party performing
utilization review must do so in compliance with Insurance Code Chapter
4201 and related rules; and
(C) utilization review decisions made by the delegated
entity or a delegated third party must be forwarded to the HMO on
a monthly basis;
(14) a provision that any agreement in which the delegated
entity directly or indirectly delegates to a delegated third party
any function delegated to the delegated entity by the HMO under Insurance
Code Chapter 843 and Insurance Code Chapter 1272 and other applicable
insurance laws and regulations of this state, including any handling
of funds, must be in writing;
(15) a provision that on any subsequent delegation
of a function by a delegated entity to a delegated third party, the
executed updated agreements must be filed with the department and
enrollees must be notified of the change of any party performing a
function for which notification of an enrollee is required by this
chapter or Insurance Code Chapter 843 and Insurance Code Chapter 1272
and other applicable insurance laws and regulations of this state;
(16) an acknowledgment and agreement by the delegated
entity that the HMO is not prevented from requiring that the delegated
entity provide any and all evidence requested by the HMO or the department
relating to the delegated entity's or delegated third party's financial
viability;
(17) a provision acknowledging that any delegated third
party with which the delegated entity subcontracts will be limited
to performing only those functions set forth and delegated in the
agreement, using standards approved by the HMO and that are in compliance
with applicable statutes and rules;
(18) a provision that any delegated third party is
subject to the HMO's oversight and monitoring of the delegated entity's
performance and financial condition under the delegation agreement;
(19) a provision that requires the delegated entity
to make available to the HMO samples of each type of contract the
delegated entity executes or has executed with physicians and providers
to ensure compliance with the contractual requirements described by
paragraphs (6) and (7) of this subsection, except that the agreement
may not require that the delegated entity make available to the HMO
contractual provisions relating to financial arrangements with the
delegated entity's physicians and providers;
(20) a provision that requires the delegated entity
to provide information to the HMO on a quarterly basis and in a format
determined by the HMO to permit an audit of the delegated entity and
to ensure compliance with the department's reporting requirements
with respect to any functions delegated by the HMO to the delegated
entity and to ensure that the delegated entity remains solvent to
perform the delegated functions, including:
(A) a summary:
(i) describing any payment methods, including capitation
or fee for services, that the delegated entity uses to pay its physicians
and providers and any other third party performing a function delegated
by the HMO; and
(ii) of the breakdown of the percentage of physicians
and providers and any other third party paid by each payment method
listed in clause (i) of this subparagraph;
Cont'd... |
