Part II. Financial Condition Requirements
14VAC5-211-30. Covered and uncovered expenses.
A. Health maintenance organizations licensed in this Commonwealth shall report to the commission on a form prescribed by the commission all uncovered expenses for the three-month periods ending on December 31, March 31, June 30, and September 30 on or before March 1, May 15, August 15, and November 15, respectively, of each year. This statement of covered and uncovered expenses shall be filed with each annual and quarterly financial statement pursuant to § 38.2-4307.1 C of the Code of Virginia.
B. Each expense of a health maintenance organization that is owed or paid to a health care provider under contract with a health maintenance organization shall be considered a covered health care expense by that health maintenance organization if (i) the contract between the health maintenance organization and the health care provider contains the hold harmless clause required by § 38.2-5805 C 9 of the Code of Virginia and (ii) the expense falls within the scope of the hold harmless clause.
C. If there is an intermediary organization between the health maintenance organization and the health care providers, the hold harmless clause shall be amended to include nonpayment by either the health maintenance organization or the intermediary organization. The hold harmless clause shall be included in any contract between the intermediary organization and health care providers and in any contract between the health maintenance organization and the intermediary organization before health care expenses owed or paid to the intermediary organization shall be considered covered expenses.
D. A health maintenance organization may request permission from the commission to treat other types of expenses as covered expenses. The request shall be in writing and state the health maintenance organization's justification for the requested treatment. In no case shall a health maintenance organization treat an expense, other than those set forth in subsections B and C of this section, as a covered expense without the prior approval of the commission.
E. Each expense that is not a covered expense under this section shall be considered an uncovered expense.
Statutory Authority
§§ 12.1-13 and 38.2-223 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 21, Issue 23, eff. July 1, 2005.
14VAC5-211-40. Surplus notes.
For the purpose of recognizing surplus notes, no debt shall be considered subordinated unless (i) it qualifies for recognition as a surplus note and can be reported as surplus (equity) in accordance with § 38.2-4300 of the Code of Virginia, and (ii) the subordination clause set forth below is executed by the health maintenance organization and the lender.
Subordination Clause
The rights of lender to the principal sum and/or accrued interest thereon are and shall remain subject to and subordinate to all other liabilities of health maintenance organization, and, upon the dissolution or liquidation of health maintenance organization, no payment upon this instrument shall be made until all other liabilities of the plan shall have been paid. It is further agreed to by and between the parties hereto that written approval from the State Corporation Commission must be obtained prior to any repayment of principal or payment of interest.
Statutory Authority
§§ 12.1-13 and 38.2-223 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 21, Issue 23, eff. July 1, 2005.
14VAC5-211-50. Financial projections.
The commission may require a health maintenance organization licensed in Virginia to submit to it periodic updates of the projection of operating results required by § 38.2-4301 B 11 of the Code of Virginia. Each update shall also include a complete explanation of any significant variance between actual operating results and the operating results that were forecasted under the projection last submitted to the commission and documentation of all critical assumptions. Critical assumptions include, but are not limited to, enrollment levels, premium rates, provider reimbursements, utilization rates, risk-sharing arrangements with providers, general and administrative expenses, excess and other insurance expenses and recoveries, coordination of benefits, costs of long-term financing, and inflation. The commission may revise or request a revision of any financial projection that it deems to be unreasonable relative to the health maintenance organization's historic performance.
Statutory Authority
§§ 12.1-13 and 38.2-223 of the Code of Virginia.
Historical Notes
Derived from Virginia Register Volume 21, Issue 23, eff. July 1, 2005; amended, Virginia Register Volume 24, Issue 22, eff. July 1, 2008.
14VAC5-211-60. (Repealed.)
Historical Notes
Derived from Virginia Register Volume 21, Issue 23, eff. July 1, 2005; repealed, Virginia Register Volume 31, Issue 3, eff. January 1, 2015.