Section 29-5602. FINANCIAL REQUIREMENTS: MANAGED CARE PROVIDER

 

5602.1The managed care provider shall ensure, through its contracts, subcontracts and any other appropriate manner that in the event of the provider’s insolvency neither enrolled children, their families, nor the District are held liable for debts of the managed care provider.

 

5602.2The managed care provider shall deposit into an escrow account, established and held in trust in a financial institution in the District for the sole purpose of holding such deposits, a surety bond, cash, securities, letters of credit, or an acceptable combination of these, an amount that shall be the greater of the following:

 

(a)Five percent (5%) of its estimated expenditures for health care services rendered to enrolled children in the first year of the demonstration;

 

(b)Twice its estimated average monthly uncovered expenditures for services rendered to enrolled children in the first year of the demonstration; or

 

(c)One hundred thousand dollars ($100,000).

 

5602.3The managed care provider’s deposits shall equal two percent (2%) and three percent (3%) of the provider’s annual expenditures for the second and third years of the demonstration. These deposits shall be based the provider’s prior year’s operating expenses and delivery arrangements.

 

5602.4The Department may require the managed care provider to update its insolvency deposits on a quarterly basis if the provider is experiencing rapid growth and may order suspension of enrollment until the appropriate deposit is certified by the Department.

 

5602.5Except as specified in §5602.7, all income from deposits shall belong to the managed care provider and shall be paid to the managed care provider as the income becomes valid.

 

5602.6The provider agreement submitted by the managed care provider shall specifically delineate the procedures that will apply in the event of default.

 

5602.7If the managed care provider defaults, the Department may use the provider’s deposit to recover any capitation payments issued to the managed care provider and to cover the cost of care for children enrolled in the provider’s plan until the affected children are assigned to the Medicaid fee-for-service program.

 

5602.8All funds held in escrow shall be invested only in securities or other investments permitted by District laws that govern the investment of assets constituting the legal reserves of life insurance.

 

5602.9The managed care provider shall obtain, at its own expense, reinsurance in the form of individual stop loss protection.

 

5602.10Any director, officer, employee, or partner of the managed care provider who receives, collects, disburses, or invests funds in connection with the activities of the provider shall be responsible for the funds as a fiduciary of the managed care provider.

 

5602.11The managed care provider shall maintain in force a fidelity bond in an amount not less than one hundred thousand dollars ($100,000) per person for each officer and employee who has a fiduciary responsibility or duty to the managed care provider.

 

5602.12The managed care provider shall provide and maintain liability and malpractice insurance, as applicable, in an amount sufficient to cover all claims that may arise out of the provider’s operations under the terms of the Medicaid provider agreement and shall provide proof of insurance coverage to the Department upon application to provide managed care services to eligible children. If a carrier of liability or malpractice insurance cancels the managed care provider’s insurance, the provider shall send written notice of the cancellation to the Department within 24 hours of the insurer’s notice to the managed care provider of its intent to cancel.

 

5602.13The managed care provider shall maintain unemployment compensation coverage and worker’s compensation insurance in accordance with applicable federal and District or State laws and regulations. If any carrier of unemployment or worker’s compensation insurance cancels the provider’s insurance, the managed care provider shall send written notice of the cancellation to the Department within twenty-four (24) hours of the insurer’s notice to the provider of its intent to cancel.

 

5602.14If the managed care provider’s liability, malpractice, worker’s compensation or unemployment compensation insurance is canceled or lapses, the managed care provider shall cease to provide any services to eligible children enrolled in the provider’s plan until the insurance is reinstated or comparable insurance is purchased.

 

5602.15The Department shall not pay the managed care provider for any services provided to enrolled children while the provider operates without insurance. If the Department does make a payment for services rendered while the managed care provider operated without insurance, the provider shall reimburse the Department for the payments.

 

5602.16The Department may adjust any future payments to the managed care provider to recover any payments made while the provider operated without insurance.

 

5602.17The Department may also use the managed care provider’s deposit to obtain coverage for enrolled children while the provider is operating without required insurance.

 

source

Final Rulemaking published at 43 DCR 4833, 4835 (September 6, 1996).