CurrentMississippi Insurance DepartmentPolicy 97-1

Contractual Arrangements Between Licensed Carriers and Risk Assuming Provider Networks

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Governs contracts between licensed carriers and Mississippi provider networks that assume financial risk for delivering or arranging defined health care services, including carrier oversight, exposure management, filing and approval, stop-loss protection, and contract requirements.

Policy Summary

PayerMississippi Insurance Department

PolicyContractual Arrangements Between Licensed Carriers and Risk Assuming Provider Networks

Policy CodePolicy 97-1

Change TypeInitial bulletinno material revision identified

Effective DateJuly 11, 1997

Next Review DateN/A

Key ActionA licensed carrier must file an exposure-management plan and applicable standard form contracts with the Department for review and approval before entering into subject contracts.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

25%Aggregate at-risk payment threshold

60 daysAdvance filing period for material deviations

1Carrier ultimate responsibility for benefits and quality

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CurrentMississippi Insurance DepartmentPolicy 97-1

Contractual Arrangements Between Licensed Carriers and Risk Assuming Provider Networks

Customize your policy alerts

Sign up for Mississippi Insurance Department Policy 97-1 alerts

Get alerted when Policy 97-1 changes without checking for updates manually.

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Policy Summary

PayerMississippi Insurance Department

PolicyContractual Arrangements Between Licensed Carriers and Risk Assuming Provider Networks

Policy CodePolicy 97-1

Change TypeInitial bulletinno material revision identified

Effective DateJuly 11, 1997

Next Review DateN/A

Key ActionA licensed carrier must file an exposure-management plan and applicable standard form contracts with the Department for review and approval before entering into subject contracts.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

25%Aggregate at-risk payment threshold

60 daysAdvance filing period for material deviations

1Carrier ultimate responsibility for benefits and quality

Grievance-system delegation permitted

Risk-Assuming Arrangement Requirements

Permitted risk transfer and carrier oversight

An at-risk provider network arrangement may proceed when all of the following conditions and responsibilities are satisfied:

ALL of the following

The arrangement is between a provider network and a licensed carrier and concerns the provision or arrangement of a defined set of health care services for carrier subscribers.
The provider network and participating providers may assume risk without obtaining a license under Mississippi Code §§ 83-41-301 et seq.; the risk transfer is regulated through the licensed carrier.
The licensed carrier remains ultimately responsible to subscribers for delivery of health care benefits and the quality of services provided.
The licensed carrier retains responsibility for operation and resolution of the member grievance system and may not delegate those functions to the provider network.
Health care services subject to the arrangement are provided through the provider network's participating providers.
Neither the provider network nor participating providers are placed at risk for referral services they order or arrange but do not furnish directly.

Exposure management and Department approval

Financial exposure and regulatory filing requirements apply as follows:

ALL of the following

When proposed aggregate at-risk payments, including capitation payments, withholds, and bonuses, exceed the threshold, the licensed carrier must ensure adequate per-patient and/or aggregate stop-loss protection.> 25% of the participating providers' total aggregate gross revenues for the immediately preceding calendar year
The licensed carrier must file with the Department a plan for managing its exposure under the contracts.
Unless previously filed and approved, standard form carrier-provider network contracts and standard form provider network-participating provider contracts must be filed for Department review and approval before subject contracts are entered into.
Before materially deviating from a filed and approved exposure-management plan or standard form contract, the licensed carrier must file the proposed plan modifications and appropriate standard form contracts for Department review and approval.

Contract content requirements

Subject contracts must include the required protections; the Department may also consider one or more additional financial-monitoring provisions:

ALL of the following

The carrier-provider network contract must include appropriate hold-harmless provisions, and corresponding hold-harmless provisions must be included in applicable contracts between the provider network and participating providers obligated to provide services to carrier subscribers.
The contract must prohibit assignment of any rights or obligations without the licensed carrier's written consent.
The contract must include appropriate termination provisions, including consideration of applicable statutory requirements and whether the licensed carrier has rights involving the Department or another lawful authority.
ONE OR MORE of
- Provisions requiring the provider network to maintain books, accounts, and records so transactions, including the risk transfer, are clearly, accurately, and completely disclosed.

Statutory and Contract References

Licensing statute referencesmixed

83-41-301 et seq.

Mississippi statutory licensing provisions referenced for licensed carriers and provider networks

Mississippi managed-care and contract provisionsmixed

83-41-325(13)	Mississippi statutory provision referenced for required hold-harmless provisions
83-41-325(17)	Mississippi statutory provision referenced in connection with contract termination provisions
83-41-405	Mississippi statutory provision cited for non-HMO contract requirements
83-41-417	Mississippi statutory provision cited for non-HMO contract requirements
83-41-401 et seq.	Mississippi statutory provisions concerning managed care plan certification guidelines
83-41-403(d)	Mississippi statutory definition of managed care contractor referenced for future guidelines

Aggregate at-risk payment stop-loss trigger

TriggerMore than 25% of the participating providers' total aggregate gross revenues for the immediately preceding calendar year

Payments includedAggregate at-risk payments, including capitation payments, withholds, and/or bonuses

Required protectionAdequate per-patient and/or aggregate stop-loss protection

Advance filing period for material deviations

Notice periodAt least 60 days before materially deviating from a filed and approved exposure-management plan or standard form contract

Filing requirementFile plan modifications and appropriate standard form contracts with the Department for review and approval

Operational Responsibilities

Note

At-Risk Contracting Without Separate Licensing

A provider network may contract with a licensed carrier to provide health care services on an at-risk basis without obtaining a separate license under Miss. Code Ann. §§ 83-41-301 et seq. Participating providers may likewise contract through the provider network on an at-risk basis without separate licensure.

Risk transfers from the carrier to the provider network and participating providers will generally be regulated through the carrier.
Provider networks assuming insurance risk through direct arrangements with non-regulated groups, such as employers, are subject to the regulatory requirements applicable to licensed carriers.

Note

Carrier Responsibility and Grievance Oversight

The licensed carrier remains ultimately responsible to subscribers for ensuring delivery of health care benefits and the quality of services provided. The Department will not permit the carrier to delegate operation or resolution of the member grievance system to a provider network.

The carrier remains responsible for all duties and responsibilities arising under subscriber agreements, including during Department examinations and other financial analyses.
The carrier must retain responsibility for subscriber grievance-system operation and resolution.

Key Terms

Provider network

Legal formA partnership, association, corporation, limited liability company, or other legal entity

Carrier relationshipContracts with a licensed carrier offering health care plans

Provider relationshipHas contracts with providers, referred to as participating providers

Services and functionsAgrees to provide or arrange a defined set of health care services principally through participating providers and may perform network contracting and management, quality assurance, utilization review, credentialing, and provider relations

Financial riskAssumes some financial risk for providing the services through capitation reimbursement or other risk-sharing arrangements

Participating provider

Policy Summary

PayerMississippi Insurance Department

PolicyContractual Arrangements Between Licensed Carriers and Risk Assuming Provider Networks

Policy CodePolicy 97-1

Change TypeInitial bulletinno material revision identified

Effective DateJuly 11, 1997

Next Review DateN/A

Key ActionA licensed carrier must file an exposure-management plan and applicable standard form contracts with the Department for review and approval before entering into subject contracts.

SourceLink

On This Page

At least 60 days before the deviation

Terms permitting the licensed carrier to assess the provider network's financial viability and condition, including access to books, accounts, and records and/or regular interim unaudited and annual audited financial statements.

A provision requiring the provider network to timely advise the licensed carrier of relevant matters that may materially affect its ability to perform under the contract.

Incorporation by reference and attachment of the carrier-provider network contract to applicable participating-provider contracts.

Responsible partyThe licensed carrier

Billing Rule

Services Furnished Through Participating Providers

Health care services covered through the arrangement must be provided by the provider network through its participating providers. A provider network or participating provider may not assume risk for referral services that participating providers order or arrange but do not furnish directly.

This limitation does not prohibit withholds or bonus arrangements.
A carrier may continue to provide coverage for services furnished by out-of-network providers.

Prior Authorization

Stop-Loss Protection Above Risk Threshold

When proposed aggregate at-risk payments to a provider network exceed 25% of the participating providers' total aggregate gross revenues for the immediately preceding calendar year, the carrier must ensure adequate per-patient and/or aggregate stop-loss protection.

Aggregate at-risk payments include capitation payments, withholds, and bonuses paid by one or more carriers.
The carrier may provide the stop-loss protection directly or require the provider network to purchase it.

Documentation Required

Department Filing and Approval

A carrier contracting with one or more provider networks must file with the Department a plan for managing its exposure under the contracts. Unless previously filed and approved, the carrier must also file standard-form carrier–provider network contracts and standard-form provider network–participating provider contracts; covered contracts may not be entered into after the Bulletin date until the standard forms are reviewed and approved.

The Department reviews the standard-form contracts, the general components of the financial proposal, and the carrier's exposure-management plan.
The Department may retain attorneys, actuaries, accountants, or other experts at the filing entity's expense to review the arrangement and determine the adequacy of required stop-loss protection.

Unsupported block type: documentation

Documentation Required

Required and Optional Contract Provisions

Carrier–provider network contracts must include specified hold-harmless, nonassignment, and termination provisions. The Department may also consider optional provisions addressing financial records, financial viability, material performance matters, and incorporation of the carrier–provider network contract into applicable participating-provider contracts.

Required: appropriate hold-harmless provisions in both the carrier–provider network contract and applicable provider network–participating provider contracts.
Required: prohibition on assignment of contractual rights or obligations without the carrier's written consent.
Required: appropriate termination provisions, including applicable statutory requirements and consideration of the carrier's right to terminate if required by the Department or another lawful authority.
For non-HMO entities, the required provisions must be incorporated under Miss. Code Ann. §§ 83-41-405 and 83-41-417.
Optional provisions may require maintained books and records; access to records; interim unaudited and annual audited financial statements; timely notice of matters materially affecting performance; and attachment or incorporation by reference of the contract in applicable participating-provider agreements.
The carrier should select optional provisions appropriate to the relationship and financial risk-sharing arrangement; not every optional provision is required in every contract.

Note

Regulatory Compliance Responsibility

The carrier and provider network remain responsible at all times for compliance with all applicable laws and regulations, including Articles 7 and 9 of Chapter 41 of Title 83 of the Mississippi Code of 1972, Annotated. Contracting with a provider network does not eliminate the carrier's continuing regulatory duties or ultimate accountability for subscriber obligations.

The carrier must continue monitoring and managing delegated functions and risk-transfer arrangements in compliance with applicable requirements.
The provider network also remains responsible for its own compliance with applicable laws and regulations.

Included providersA physician, hospital, pharmacy, pharmacist, or other organizational provider

ExamplesPhysician groups, clinics without walls, and integrated group practices

Contractual relationshipContracts with the provider network

Risk-assuming arrangement

Covered conceptsRisk assuming, risk transfer, risk sharing, financial risk, and at-risk basis

Included arrangementDownstream risk arrangements between provider networks and licensed carriers involving financial risk transfer or sharing, including capitation or other risk-sharing arrangements

Excluded arrangementDirect contracting arrangements between provider networks and non-regulated groups such as employers