Current through Register Vol. 49, No. 9, September, 2024
Section 1.
Authority
This rule is issued pursuant to Ark. Code Ann. §
23-61-117(b)
which authorizes the Arkansas Insurance Conunissioner ("Commissioner") to issue
rules to regulate the licensure and financial solvency of risk-based provider
organizations under Act 775 of 2017 of the 91st
Arkansas General Assembly also known as the "Medicaid Provider-Led Organized
Care Act" (hereafter, the "Organized Care Act"). In addition, Section Seven (7)
of the Organized Care Act requires the Commissioner to adopt rules on or before
June 1, 2017 to implement various provisions of the Act.
Section 2.
Purpose
The purpose of this Rule is to establish licensure and solvency
requirements of risk-based provider organizations ("RBPOs") participating in
the Organized Care Act. This Rule provides application requirements of the RBPO
participating in the program, addresses standards for imposition of additional
amounts of funds above reserve requirements to adjust to risk in Ark. Code Ann.
§
20-77-2706(f)(4)(B),
establishes financial reporting requirements of the RBPO, imposes a reasonable
fee for the regulation and licensing of the RBPO by rule under §
23-61-117(b)(2),
and, finally, prescribes the reporting, forms, and requirements related to the
payment of the quarterly tax under Ark. Code Aim.
23-61-117(b)(3).
Section 3.
Applicability and Scope
A.
Certificate of Authority
Limited To Participation in the Organized Care Act Program.
This Rule applies to the licensure and solvency standards of
RBPOs, as defined in Ark. Code Ann. §
20-77-2703(13)
under the Organized Care Act. Nothing in this Rule is intended to sanction,
permit or establish a process for a provider sponsored organization to obtain a
certificate of authority to engage in risk assumption or risk sharing
activities in this State, outside of its participation in the Organized Care
Act program.
Section
4.
Definitions
As used in this Rule:
(1) "ADHS" means the Arkansas Department of
Human Services;
(2) "Associated
participant" means an organization or individual that is a member or contractor
of a risk-based provider organization and provides necessary administrative
functions, including without limitation claims processing, data collection, and
outcome reporting;
(3) "Capitated"
means an actuarially sound healthcare payment that is based on a payment per
person that covers the total risk for providing healthcare services as provided
in this subchapter for a person;
(4)
(A)
"Care coordination" means the coordination of healthcare services delivered by
healthcare provider teams to empower patients in their health care and to
improve the efficiency and effectiveness of the healthcare sector.
(B) "Care coordination" includes without
limitation:
(i) Health education and
coaching;
(ii) Promoting linkages
with medical home services and the healthcare system in general;
(iii) Coordination with other healthcare
providers for diagnostics, ambulatory care, and hospital services;
(iv) Assistance with social determinants of
health, such as access to healthy food and exercise; and
(v) Promotion of activities focused on the
health of a patient and the community, including without limitation outreach,
quality improvement, and patient panel management;
(vi) Community-based management of medication
therapy;
(5)
"Carrier" means an organization that is licensed or otherwise authorized to
provide health insurance or health benefit plans under §
23-85-101
or §
23-76-101;
(A) licensed or otherwise authorized to
transact health insurance as an insurance company under §
23-62-103;
(B) authorized to provide healthcare plans
under §
23-76-108
as a health maintenance organization; or
(C) authorized to issue hospital service or
medical service plans as a hospital medical service corporation under §
23-75-108.
(6) "Commissioner" means the
Arkansas Insurance Commissioner;
(7) "Covered Medicaid beneficiary population"
means a group of individuals with:
(A)
Significant behavioral health needs, including substance abuse treatment and
services, and who are eligible for participation in the Medicaid provider-led
organized care system as determined by an independent assessment under criteria
established by the Department of Human Services; or
(B) Intellectual or developmental
disabilities who are eligible for participation in the Medicaid provider-led
organized care system as determined by an independent assessment under criteria
established by ADHS;
(C) "Covered
Medicaid Beneficiary population" does not include individuals enrolled in any
long-term services and supports program under
42 U.S.C. §
1396n or 42 U.S.C. § 1315 by reason of a
physical functional limitation;
(8) "Department" means the Arkansas Insurance
Department;
(9) "Direct service
provider" means an organization or individual that delivers healthcare services
to enrollable Medicaid beneficiary populations;
(10) "Enrollable Medicaid beneficiary
population" means a group of individuals who are either:
(A) Members of a covered Medicaid beneficiary
population; or
(B) Members of a
voluntary Medicaid beneficiary population.
(11) "Flexible services" means alternative
services that are not included in the state plan or waiver of the Arkansas
Medicaid Program and that are appropriate and cost-effective services that
improve the health or social determinants of a member of an enrollable Medicaid
beneficiary population that affect the health of the member of an enrollable
Medicaid beneficiary population;
(12) "Global payment" means a
population-based payment methodology that is actuarially sound and based on an
all-inclusive per-person-per-month calculation for all benefits,
administration, care management, and care coordination for enrollable Medicaid
beneficiary populations;
(13)
"Medicaid" means the programs authorized under Title XIX of the Social Security
Act,
42 U.S.C. §
1396 et seq., and Title XXI of the Social
Security Act,
42 U.S.C. §
1397aa et seq., as they existed on January 1,
2017, for the provision of healthcare services to members of enrollable
Medicaid beneficiary populations;
(14) "NAIC" means the National Association of
Insurance Commissioners;
(15)
"Participating provider" means an organization or individual that is a member
or has an ownership interest in of a risk-based provider organization and
delivers healthcare services to enrollableMedicaid beneficiary
populations;
(16) "Quality
incentive pool" means a funding source established and maintained by ADHS to be
used to reward risk-based provider organizations that meet or exceed specific
performance and outcome measures;
(17) "Risk assumption" or "risk sharing"
means, for the purpose of this regulation, a transaction whereby the chance of
loss, including the expenses for the delivery of service, with respect to the
health care of a person, is transferred to or shared with another entity, in
return for a consideration. Examples include but are not limited to, full or
partial capitation agreements, withholds, risk corridors, and indemnity
agreements;
(18) "Risk based
capital" means the "RBC level" defined under Ark. Code Ann. §
23-63-1501(8);
and
(19) "Risk-based provider
organization" means an entity that:
(A)
(i) Is licensed by the Insurance Commissioner
under this Rule.
(ii)
Notwithstanding any other provision of law, a risk-based provider organization
is an insurance company upon licensure by the Commissioner.
(iii) The Commissioner shall not license a
risk-based provider organization except as provided under Subchapter 27 -
Medicaid Provider-Led Organized Care Act;
(B) Is obligated to assume the financial risk
for the delivery of specifically defined healthcare services to an enrollable
Medicaid beneficiary population; and
(C) Is paid by ADHS on a capitated basis with
a global payment made, whether or not a particular member of an enrollable
Medicaid beneficiary population receives services during the period covered by
the payment;
(20)
"Voluntary Medicaid beneficiary populations" means individuals who are in need
of behavioral health services or developmental disabilities services, not
otherwise excluded in this subchapter, who are eligible for Medicaid and may
elect to enroll in a risk-based provider organization.
Section 5.
Certificate of
Authority
A.
Requirement To Be Newly Formed And Organized.
Unless currently authorized or licensed by the Department as a
carrier as defined in Ark. Code Ann. §
20-77-2703(4),
no RBPO shall transact business in this State under the Organized Care Act
Program unless authorized by a subsisting certificate of authority issued to it
by the Commissioner. Unless currently authorized or licensed by the Department
as a carrier as defmed in Ark. Code Ann. § 20-77-203(4), no RBPO shall be
granted a certificate of authority unless it is newly formed and organized for
the purpose of its participation in the Organized Care Act Program.
B.
Entity
Type
The business organization form of an RBPO may be any organization
type which permits a valid certificate of authority to be issued to it by the
Arkansas
Secretary of State. The RBPO must obtain and maintain a valid
certificate of authority issued by the Secretary of State.
Section 6.
Certificate of Authority Application
A.
Requirements
An RBPO may apply for a certificate of authority on a form
prescribed by the Commissioner. Each application for a certificate of authority
shall be verified by an officer or authorized representative of the applicant.
If no form application is available by the Arkansas Insurance Department, an
RBPO may apply for a certificate of authority in writing to the Commissioner,
and, in the request for a certificate of authority, provide the following
information:
(1) The name of the
risk-bearing entity (RBPO), the contact information of the RBPO, including
business address and phone number of the RBPO. Provide the name, address and
contact information for the principal contact person of the RBPO for the
Arkansas Insurance Department;
(2)
A list of the names, addresses and official positions of the person who are to
be responsible for the conduct of the affairs of the applicant, including all
members of the board of the directors, board of trustees, executive committee,
or other governing board or committee, the principal officers in the case of a
corporation, and the partners or members in the case of a partnership or
association.
(3) Pay a
non-refundable filing fee of two thousand dollars ($2,000.00) to the
Department;
(4) A detailed summary
of its proposed business plan with respect to its proposed plan as an RBPO.
This business plan shall include, but not be limited to:
a. A description of the services to be
provided and the manner in which the RBPO shall provide a network of direct
service providers sufficient to ensure that all services to recipients are
adequately accessible within time and distance requirements defined by
Medicaid;
b. A description or plan
of the RBPO to ensure that the requirements are met in Ark. Code Ann. §
20-77-2706(f)(2)(A)
through (D) and that the RBPO shall timely
process claims under Ark. Code Ann. §
20-77-2706(f)(3);
c. A description of the projected population
or numbers of enrollees or beneficiaries to be serviced on an annual basis by
the RBPO;
d. Describe the network's
form of ownership, including the name and the percentage of ownership interest
of all members;
e. A description of
the RBPO's capital structure;
f. A
quantitative measurement of its capacity to provide contracted
services;
g. A detailed description
of the procedures to be established to provide due process protections for the
enrolled Medicaid beneficiary populations (i.e., reconsiderations, grievance
procedures, peer review, case utilization procedures, etc.);
h. A description of the network's
geographical service area;
i. An
explanation of the techniques to be implemented to ensure continuity of care or
benefits for all enrolled Medicaid beneficiaries should the RBPO incur a change
in its providers, geographical area or become financially impaired or
insolvent. Explain or describe the extent to which enrolled Medicaid
beneficiaries are assured continuity of care by Medicaid in the event of change
of its providers, geographical area, or due to the circumstance that the RBPO
becomes financially impaired to provide contracted services, substantially
equivalent to the requirements in Ark. Code Ann. §
23-76-118.
j. An explanation of the plan by the RBPO to
assure or protect payment to contracted or participating providers of the RBPO,
including subcontracted providers in the plan, for services provided should the
RBPO become financially insolvent. Such measures and protections may include
access to additional capital, stop-loss insurance, business interruption
insurance, etc.
k. A current audit
report, if available, certified by an independent certified public accountant,
of the applicant's financial condition, or current financial information on a
SAP basis, attested to by an officer of the RBPO applicant. In addition, three
(3) years of financial projections, including balance sheets, income statements
and statements of cash flow must be provided. The financial projections shall
contain projected per member per month enrollment at its fiscal year end, and a
concise summary of all assumptions used to generate the projections and
supported by a statement of an actuarial opinion.
l. A copy of the RBPO's proposed health
coverage plan(s), contracts, arrangements, marketing and advertising
material.
m. A list of the
providers comprising the RBPO's provider network, including each provider's
medical designation, field of practice or specialty, licensure or certification
category, and a description of the RBPO's procedures for determining, on an
on-going basis, that each provider is duly licensed or certified.
n. A list of all entities on whose behalf the
RBPO has agreements or contracts to provide health care services under the
Organized Care Act Program, including a list of all subcontractors of the
RBPO.
o. The parent company's
current audited financial statements if the applicant is ovmed by a parent
company.
p. A statement or
description identifying sources of additional capital resources that would be
available in the event the applicant needs additional capital
funding.
(5) Provide
biographical backgrounds of all proposed officers, directors, owners and
organizers, and information providing confirmation of their background and
experience in the management or delivery of the services to be delivered
through the RBPO. Such biographical information shall be submitted on the NAIC
form, Biographical Affidavit (available upon request). Any person who has
managerial involvement or control of a company that underwent any adverse state
or federal administrative action shall include information about the adverse
administrative action.
(6) Provide
a copy of the RBPO's organizational documents (e.g. articles of incorporation,
by-laws, partnership agreements, etc.) including any sample contract forms, or
generic template contract forms between the RBPO and its participating
providers.
(7) Provide a written
description evidencing the RBPO ownership or management satisfies the
characteristics of an RBPO under Ark. Code Ann. §
20-77-2706
which include:
a. The RBPO holds a valid
certificate of authority or instrument of formation issued by the Secretary of
State;
b. The RBPO has an ownership
interest of not less than fifty-one percent (51%) by participating
providers;
c. The RBPO includes
within its membership:
(1) One or more of the
following Arkansas licensed or certified direct service provider of
developmental disabilities services;
(i)
Developmental Day Treatment Clinic Services ("DDTCS")
(ii) Private (not state owned and operated)
Intermediate Care Facilities for Individuals with Intellectual or Developmental
Disabilities (ICF/IDD)
(iii) DDS
Waiver Services
(iv) Early
Intervention Services ("EI")
(v)
Child Health Management Services ("CHMS")
(2) One or more of the following Arkansas
licensed or certified direct service provider of behavioral health services:
i) Rehabilitation Services for Persons with
Mental Illness ("RSPMI") until June 30, 2018
ii) Outpatient Behavioral Health Agency
("OBHA")
iii) Licensed Mental
Health Practitioner ("LMHP") until June 30, 2018
iv) Independently Licensed Practitioner
("ILP")
(3) An Arkansas
licensed hospital or hospital services organization.
(4) An Arkansas licensed physician
practice;
(5) A pharmacist who is
licensed by the Arkansas State Board of Pharmacy d. The RBPO has a surety bond
in the amount as required under Section Seven (7) of the Organized Care
Act.
(8) Provide a copy of any
management or administrative contract(s) entered into, or to be entered into,
by the RBPO.
(9) Confirm that the
RBPO uses standardized codes, billing processes and formats.
(10) Describe how the applicant has the
capability to satisfactorily manage the health care coverage issued. This
confirmation is to include a detailed description of the RBPO's procedures
established and implemented to ensure the maintenance of all books and records
necessary to meet all reporting requirements. This requirement can be met
through a third party management or administration agreement.
(11) Describe the RBPOs global payment amount
awarded, or, if not available, the estimated or projected global payment amount
or rates. Describe the actual or projected monthly payments or monthly
reimbursement amounts under the global payment to the RBPO by Medicaid. Provide
a copy of all contracts between the RBPO and Medicaid related to the RBPOs
participation in the Organized Care Act program.
(12) Describe the RBPOs rates or charges to
participating providers. This information shall include the basis for the
calculation of the rate or charge (e.g., use of usual, customary, and
reasonable (UCR) rates).
(13)
Describe any and all stop-loss arrangements or reinsurance arrangements of the
RBPO for participation in this program.
(14) A copy of the basic organizational
document of the RBPO, such as the articles of incorporation, articles of
association, partnership agreement, trust agreement or other applicable
documents, and all amendments thereto; a copy of the bylaws, rules and
regulations or similar document, if any, regulating the conduct of the internal
affairs of the applicant.
(15) A
copy of any contract made or to be made between any providers and the applicant
or persons under Section Seven (7)(A)(4)(M) of this Rule.
(16) Any other information deemed necessary
by the commissioner in evaluating the application.
B.
Material
Changes.
Prior to implementing any material changes in its operations or
in the coverage offered by the RBPO, the RBPO must submit to the Commissioner a
written description of any material modification to its plan of operation, or a
written explanation of any material changes to the information submitted in
accordance with this Section. If the Commissioner does not disapprove within
sixty (60) days of filing, the modification shall be deemed approved.
Section 7.
Solvency Standards
All RBPOs shall be responsible for meeting the following solvency
standards under this Section at the time of initial licensure, in the
evaluation of their application, and continuously thereafter. All RBPOs acting
as a carrier under Ark. Code Ann. §
20-77-2703(4)
shall be subject to this Section in addition to any other provision in the
Arkansas Insurance Code or Rules applicable to its type of organization, imless
excluded by this Rule or the Organized Care Act or by Medicaid
pre-emption.
A.
Solvency
Standards
All RBPOs participating in the Organized Care Act program
shall:
(1) meet the reserve or capital
requirements under Ark. Code Ann. §
20-77-2706(f)(4)
and any additional amounts needed to satisfy Risk-Based Capital Requirements
under Ark. Code Ann. §
23-63-1501
et seq. (hereafter, "HMO-RBC"). The reserve requirements in Ark. Code Ann.
§
20-77-2706(f)(4)
shall refer to the organization's capital or capital and surplus under
Statutory Accounting Principles (SAP). The Commissioner may adjust the reserve
requirements of the RBPO from initial licensure, on a prospective basis,
related to the timing of the RBPO assumption levels of partial to ftill risk in
its business operations. In addition, the Commissioner may consider the extent
to which the RBPO has reinsurance or stop loss coverage, or agreements with a
licensed insurer or HMO, to cede risk, as a circumstance to reduce or modify
reserve or capital requirements under this Section. The Commissioner shall
review and approve all such risk sharing agreements including any major
modifications thereof
(2) comply
with SAP reporting and file quarterly and annual financial statements with the
Department under SAP in the same manner as is required of a health maintenance
organization regulated by the Department under Ark, Code Ann. §
23-76-113;
(3) comply with HMO-RBC requirements and
reporting;
(4) comply with Ark.
Code Arm. §
23-63-601
et seq., referring to assets and liabilities;
(5) comply with Ark. Code Ann. §
23-68-101
et seq., referring to rehabilitation and liquidation;
(6) comply with Ark. Code Ann. §
23-69-134,
referring to home office and records and the penalty for unlawful removal of
records;
(7) comply with Ark. Code
Ann. §
23-76-122
related to examinations, in the same manner as a health maintenance
organization;
(8) comply with
Sections Ark. Code Ann. §§
23-60-101
through
23-60-108 and
23-60-110
referring to the scope of the Arkansas Insurance Code;
(9) comply with Sections Ark. Code Ann.
§§
23-61-101,
23-61-201,
23-61-301
referring to the Insurance Commissioner;
(10) comply with Section Ark. Code Ann.
§§
23-63-102
through
23-63-104,
23-63-201,
et seq., general provisions, and
23-63-301
et seq., referring to service of process, a registered agent as process agent,
serving legal process, and time to plead;
(11) comply with the annual independent audit
under Ark. Code Ann. §
23-63-216(a)(5)
and actuarial requirements under Ark. Code Ann. §
23-63-216(e)(l)
and (e)(2);
(12) comply with the custody of assets
requirements under Ark. Code Ann. §
23-69-134;
and
(13) comply with the transfer
of ownership requirements or acquisition provisions under Ark. Code Ann. §
23-69-142.
Section 8.
Market Conduct Related Activities and Network
Adequacy
A.
RBPO Provider Market Conduct Activities
The Insurance Commissioner is primarily authorized to regulate
the financial solvency and licensing of the RBPO under the Organized Care Act.
The Insurance Commissioner shall not administratively adjudicate, review,
process complaints, enforce or apply provisions of the Arkansas Insurance Code,
Rules, Bulletins or Directives upon an RBPO, or contracted third party
administrator, if applicable, related to claims payment disputes, claims
payment delays, provider payment rate(s), provider credentialing, provider
reimbursement programs, network related procedures or filing requirements, if
such arise during the course of Organized Care Act Program, unless the
complaint or concern relates to "Any Willing Provider" access (Ark. Code Ann.
§§
23-99-201,
et seq.,
23-99-801
et seq.), or significantly reflects upon the financial condition of the RBPO.
Complaints or inquiries about claims payment delays or requirements shall be
referred to ADHS.
ADHS shall be responsible for certifying, approving and
monitoring whether an RBPO meets the required network access or network
adequacy for services under the Organized Care Act. The Commissioner however
shall review network adequacy of the RBPO at licensure, or upon renewal of
licensure, but shall accept certification from ADHS that the RBPO has
sufficient network adequacy as required under the Organized Care Act.
Section 9.
Confidentiality
& Workpapers
The confidentiality provisions in the Arkansas Lisurance Code and
Rules, including but not limited to Ark. Code Ann. §
23-61-103(d)(5),
related to actuarial reports, Ark. Code Aim. §
23-61-103(d),
related to active investigations or examinations. Ark. Code Ann. §
23-61-107,
related to financial records and Ark. Code Ann. §
23-61-207,
related to ancillary information and workpapers, shall apply in the same manner
to an RBPO as are applied to a health insurer or health maintenance
organization.
Section 10.
Payment of Premium Taxes
Pursuant to Ark. Code Ann. §
26-57-603,
a RBPO that is licensed under the Organized Care Act and participates in the
Medicaid provider-led organized care system offered by the Arkansas Medicaid
Program for enrollable Medicaid beneficiary populations as defined in §
20-77-2703
shall pay to the Treasurer of State through the Commissioner a tax imposed for
the privilege of transacting business in this state.
(2) The tax shall be computed at a rate of
two and one-half percent (21%) on the total amount of funds received in global
payments to a risk-based provider organization participating in the Medicaid
provider-led organized care system.
(3) The tax shall be:
(A) Reported at such times and in such form
and context as prescribed by the commissioner; and
(B) Paid on a quarterly basis as prescribed
by the Commissioner.
Section 11.
Effective
Date
This Rule shall be effective on and after September 25,
2017.
