| (a) Each HMO must account for liabilities as provided
for in §11.801 of this title (relating to Accounting Guidance),
and must segregate its liabilities into classifications of "covered"
or "uncovered." Agreements to loan money or to make future capital
or surplus contributions do not, in themselves, cause liabilities
to be covered. Any guarantee of future contributions to surplus that
are directed and based on the payment of a debt will allow that debt
to be reflected as a covered liability. A liability, for which provision
is made other than by the assets of the HMO, may qualify as a covered
liability if the amount owed is:
(1) based on a physician or provider contract with
a hold-harmless clause as provided in §11.901 of this title (relating
to Required and Prohibited Provisions);
(2) subordinated in writing to the uncovered health
care liabilities of the HMO; or
(3) unconditionally guaranteed and the guarantee is
without monetary limit, as specified in §11.810 of this title
(relating to Guarantee from a Sponsoring Organization), by a sponsoring
organization that has a tangible net worth of at least $10 million
in excess of all amounts that the sponsoring organization has guaranteed.
(b) An HMO may not decrease its liabilities or establish
an asset on its balance sheet for any capitated risk or other risk-sharing
arrangement with a network physician or provider relating to out-of-service
area or emergency care provided by any non-network physician or provider.
For purposes of this subsection, non-network physician or provider
means a physician or provider who has not directly or indirectly contracted
with an HMO or an HMO's network physicians or providers to provide
medical or health care services to the HMO's enrollees.
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