New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter XIV - Individual And Small Group Health Insurance
Part 361 - Establishment And Operation Of Market Stabilization Mechanisms For Individual And Small Group Health Insurance And Medicare Supplement Insurance
Section 361.5 - Pooling of variations in costs attributable to variations in specified medical conditions (SMC) beginning in 1999 through 2006

Universal Citation: 11 NY Comp Codes Rules and Regs § 361.5

Current through Register Vol. 46, No. 39, September 25, 2024

(a) In each pool area, a specified medical condition pool is established in connection with individual health insurance and small group health insurance policies, other than Medicare supplement insurance policies. Each pool area operates independently; that is, all calculations and payments described below are made for each pool independently of any other pool.

(b) The average relative cost factor is determined for each carrier participating in a pool, with respect to its participation in each pool separately, as follows:

(1) Assign the relative cost factor, according to Table 7 of this section, to each individual covered by a particular carrier under all pooled insurance contracts for policies in force on the date as of which the average relative cost factor is being calculated (the calculation date), which is the beginning of each six-month period starting January 1, 1999. The term individual shall mean each and every person covered under the subscriber contract or policy form including, but not limited to, a spouse, dependent children or other persons covered as a result of their relationship to the person to whom the subscriber contract or policy form was issued or the employee or other person issued a certificate of coverage by virtue of their membership within a group which has purchased coverage. If the carrier does not maintain records of the exact number of spouses, children and other persons covered under family coverage contracts then the carrier shall assume there are 2.3 persons covered in addition to the one employee, subscriber or policyholder. In such cases, data filed with the pool administrator must be accompanied by an attestation of either the carrier's chief financial officer or chief actuary that the carrier is unable to report accurate data concerning dependents.

(2) Each such individual who has had an eligible claim paid in the six-month period immediately preceding the calculation date for an ICD9 code listed on Table 7 of this section should be assigned the relative cost factor corresponding to the ICD9 code. Each individual will be assigned only one relative cost factor. If an individual has multiple conditions, assign the relative cost factor for the condition with the largest factor for the conditions pertaining to the individual. If an individual has had no claims paid for any of the ICD9 codes listed in Table 7, the relative cost factor for individuals without specified medical conditions should be assigned. For the claim(s) to be considered eligible the individual must have either had an overnight inpatient hospital stay or, for certain conditions, had total paid claims for the condition which together with paid claims for all other conditions exceed $5,000 in the six-month period. The certain conditions are AIDS/HIV, Asthma, Diabetes, Gaucher's Disease, Hemophilia, Lupus or Multiple sclerosis. These conditions are marked with an asterisk in Table 7.

(3) Determine the carrier's average relative cost factor by taking the sum of the relative cost factors for all individuals covered by the carrier and dividing that sum by the total number of individuals covered by the particular carrier under all pooled insurance contracts or policies in force as of the calculation date.

(c) The regional average relative cost factor for all carriers combined is determined for each pool based upon the average relative cost factors of all carriers participating in that pool weighted by their total annualized premiums as of the calculation date. Annualized premium means one of the following, as appropriate for a particular policy or contract:

*Frequency of Premium Payment*	*Definition of Annualized Premium*
Annually	annual premium
Semi-annually	2 times the semi-annual premium
Quarterly	4 times the quarterly premium
Monthly	12 times the monthly premium
Other	consistent with the above

(d) Initial payments to the pools.

(1) The average relative cost factor for each carrier participating in a pool shall be determined as of the beginning of each six-month period, starting January 1, 1999. This is the calculation date. The regional average relative cost factor for each pool shall also be determined as of the beginning of a six-month period, starting January 1, 1999. The claims data to be used for the January 1st calculation date shall be the claims data for the six-month period ending on the December 31st prior to the January 1st calculation date. The claims data to be used for the July 1st calculation date shall be the claims data for the six-month period ending on the June 30th prior to the July calculation date.

(2) If the average relative cost factor of a carrier participating in a specified medical condition pool, determined as of the beginning of a six-month period starting on or after January 1, 1999, is less than the regional average relative cost factor for that pool as of the beginning of that six-month period, the carrier shall pay to the specified medical condition pooling fund a percentage of its premium earned for pooled insurance during that period. For example, the determination of average relative cost factors as of January 1, 1999 based on the claims data for the six-month period ending December 31, 1998 and membership data as of January 1, 1999 affects payments to the specified medical condition pooling fund attributable to the period January 1, 1999 through June 30, 1999. The premiums to be used to determine the payments to the specified medical condition pooling fund are the premiums for the current six-month period (e.g., the premiums to be used for payments to the pool for the January 1, 1999 through June 30, 1999 period are the earned premiums for the six-month period ending June 30, 1999). The percentage of premium earned during a particular six-month period to be paid to the specified medical condition pooling fund is calculated as the product of subparagraphs (i), (ii) and (iii) of this paragraph.

(i) 100;

(ii) 1.0 minus the ratio of the carriers average relative cost factor divided by the regional average relative cost factor; and

(iii) the ratio of claims projected to be incurred during the six-month period commencing at the calculation date under its pooled insurance to the premiums projected to be earned during that period for pooled insurance, without consideration of this additional percentage (i.e., the projected insured loss ration, exclusive of specified medical condition pooling).

(3) Payment to the specified medical condition pooling fund, in accordance with paragraph (2) of this subdivision, shall be due the first day of the second month after the end of each six-month period. However, the payment dates preceding the effective date of this section will be due as provided in subdivision (i) of this section. Payment made after the due date shall include the amount calculated in accordance with paragraph (2) of this subdivision, plus interest at the rate of one percent per month, or portion thereof, beyond the date the payment was due.

(4) Individual carrier's payments to the specified medical condition pooling fund for calender years 1999, 2000, 2001, and 2002 shall be limited to five percent of the carrier's incurred losses on its pooled business in each respective year.

(e) Initial collections from the pools.

(1) In August of 1999 and every six months thereafter, a carrier participating in a specified medical condition pool shall be entitled to collect from a specified medical condition pooling fund if its average relative cost factor for that pool at the beginning of the preceding six-month period (i.e., January 1, 1999 calculation date and every six months thereafter) is greater than the regional average relative cost factor for that pool as of that date. However, collection dates preceding the effective date of this section shall be postponed as provided in subdivision (i) of this section.

(2) Subject to the limitation in paragraph (3) of this subdivision, a carrier who is entitled to collect from a specified medical condition pooling fund may collect the product of subparagraphs (i), (ii) and (iii) of this paragraph:

(i) the premiums earned under its pooled insurance during the six-month period commencing on the calculation date of the average relative cost factor;

(ii) the ratio of the carrier's average relative cost factor for that pool at the calculation date to the regional average relative cost factor for that pool as of the calculation date minus 1.0; and

(iii) the ratio of claims projected to be incurred during the six-month period commencing at the calculation date under its pooled insurance to the premiums projected to be earned during that period for pooled insurance, without consideration of this additional percentage (i.e., the projected incurred loss ration, exclusive of specified medical condition pooling).

(3) If the amount of money in the specified medical condition pooling fund is not sufficient to pay all carriers the amounts they are entitled to collect in accordance with this paragraph, the amounts they are entitled to collect are reduced proportionately to match the fund.

(f) Each carrier shall transmit every six months to the pool administrator, in forms and formats designated by the superintendent, the following data, within the following timeframes, for all pooled insurance policies within each region:

(1) the average relative cost factor computed in accordance with subdivision (b) of this section, as of the first day of the following six-month period (e.g., July 1, 1999);

(2) the annualized premium as of the first day of the following six-month period (e.g., July 1, 1999);

(3) premium earned during the six-month period, (e.g., January 1, 1999 to June 30, 1999) identifying separately the earned premium charged for anticipated payments to the specified medical condition pooling fund;

(4) the ratio of claims projected to be incurred during the six-month period commencing at the calculation date (e.g., January 1, 1999) under its pooled insurance to the premiums projected to be earned during that period for pooled insurance, without consideration of this additional percentage (i.e., the projected incurred loss ration, exclusive of specified medical condition pooling); and

(5) such data reports shall be provided to the pool administrator no later than 30 days after the end of each six-month period (e.g., July 30, 1999), beginning with the last six-month period of 1999. For carriers providing such reports later than 30 days after the end of any six-month period, payment for those carriers that pay into the pools will be plus one percent interest per month, and for those carriers that collect from the pools distributions will be reduced by one percent per month, unless waived by the superintendent for special circumstances. In addition, each carrier shall transmit to the pool administrator as provided in subdivision (i) of this section, the data stated in paragraphs (1) and (2) of this subdivision for the period July 1, 1998 to December 31, 1998 computed as of January 1, 1999, the data stated in paragraphs (1) and (2) of this subdivision for the period January 1, 1999 to June 30, 1999 computed as of July 1, 1999, and the data stated in paragraphs (3) and (4) of this subdivision for the six-month period ending June 30, 1999.

(g) In may of each year, a carrier's initial payments to or from a specified medical condition pooling fund as descried in subdivisions (d) and (e) of this section for each of the two preceding years shall be reconciled with payments determined pursuant to paragraphs (1)-(6) of this subdivision (e.g., in May 2002, reconciliations will be done for 2000 and 2001 payments).

(1) A carrier's final average relative cost factor each year shall be determined based on the average of its average relative cost factors as of the beginning of each six-month period of the previous calendar year, weighted by its total annualized premium as of each calculation date.

(2) The regional average relative cost factor during the previous calendar year is calculated as the average of the regional average relative cost factors for that pool as of the beginning of each six-month period of the previous calendar year, weighted by the total annualized premium of all carriers participating in the pool as of the calculation date.

(3) For reconciliation purposes, a carrier's total payment to (+) or from () the specified medical condition pooling fund for the previous calendar year shall be determined as the product of subparagraphs (i) and (ii) of this paragraph:

(i) the claims incurred, as prepared for and consistent with the carrier's annual statement for the preceding calendar year, under its pooled insurance during that year exclusive of payments to or from the specified medical condition pools;

(ii) 1.0 minus the ratio of the carrier's average relative cost factor for that pool during that year to the regional average relative cost factor for that pool during that year.

(4) Carriers shall pay additional amounts to, or collect additional amounts from, the specified medical condition pooling fund so that these amounts, combined with amounts initially paid or collected pursuant to subdivisions (d) and (e) of this section, equal the total payment to or from the specified medical condition pooling fund for reconciliation purposes.

(5) The additional payment to the specified medical condition pooling fund shall be paid by the carrier during the 12 months beginning with the next July 1st (e.g., for the May 2002 reconciliations of pool years 2000 and 2001, payments shall be made from July 1, 2002 through June 1, 2003). That amount shall be in addition to the carrier's payments to the specified medical condition pooling fund pursuant to subdivision (d) of this section.

(6) If the amount of money in the specified medical condition pooling fund is not sufficient to pay all carriers the amounts they are entitled to collect in accordance with this paragraph, the amounts they are entitled to collect are reduced proportionately to match the fund.

(7) In the event excess funds remain in the specified medical condition pooling fund after the second reconciliation of any calendar year in any region, such excess shall be refunded to carriers in the region in an amount equal to the respective carrier's proportion of the total amount paid in by all carriers in the region for that calendar year. This provision does not apply to excesses, if any, of deposit contributions based on demographics for 1999 over required contributions determined based on the provisions of this section. Such excesses shall be refunded to each carrier in the entire amount of the respective carrier's excess deposit payment.

(h) In order to implement the phase in of the specified medical condition pooling process pursuant to chapter 504 of the Laws of 1995, the payments to, or from, the specified medical condition pools otherwise determined pursuant to subdivisions (e), (f) and (g) of this section shall be reduced by the percentages set forth below:

(1) 1999 - 221/2 percent reduction.

(2) 2000 - and thereafter - no reduction.

(i) Reporting of data due for calendar years 1999, 2000, and 2001 and associated dates of submission and payments, may be determined by the superintendent in recognition of the effective date of this section.

(j) Table 7.

*ICD9 Code*	*Condition*	*Relative Cost Factor*
*AIDS	AIDS/HIV	60.97
042	HIV disease
V08	ASYMPTOMATIC HIV INFECTION STATUS
TB	Tuberculosis	26.39
011	PULMONARY TUBERCULOSIS
012	OTHER RESPIRATORY TB
013	CNS TUBERCULOSIS
014	INTESTINAL TB
015	TB OF BONE AND JOINT
016	GENITOURINARY TB
017	TUBERCULOSIS NEC
018	MILIARY TUBERCULOSIS
HEPAT	Hepatitis	18.35
070.1	HEPATITIS A W/O COMA
070.2	HEPATITIS B WITH COMA
070.3	HEPATITIS B W/O COMA
070.4	VIRAL HEPATITIS NEC W COMA
070.5	VIRAL HEPATITIS NEC W/O COMA
070.6	VIRAL HEPATITIS NOS W COMA
070.9	VIRAL HEPATITIS NOS W/O COMA
136.3	PNEUMOCYSTOSIS	25.46
CANC1	Cancer Class I	41.92
141	MALIG NEOPLASM TONGUE
142	MAL NEOPLASM MAJOR SALIVARY
144	MALIG NEOPLASM MOUTH FLOOR
145	MALIG NEOPLASM MOUTH NEC/NOS
146	MALIG NEOPLASM OROPHARYNX
147	MALIG NEOPLASM NASOPHARYNX
148	MALIG NEOPLASMPL HYPOPHARYNX
149	OTH MALIG NEOPLASM OROPHARYNX
150	MALIGNANT NEOPLASM ESOPHAGUS
151	MALIGNANT NEOPLASM STOMACH
152	MALIG NEOPLASM SMALL BOWEL
153	MALIGNANT NEOPLASM COLON
154	MALIG NEOPLASM RECTUM/ANUS
155	MALIGNANT NEOPLASM LIVER
156	MAL NEOPLASM GB/EXTRAHEPATIC
157	MALIGNANT NEOPLASM PANCREAS
158	MALIG NEOPLASM PERITONEUM
159	OTH MALIG NEOPLASM GI/PERITONEUM
160	MAL NEOPLASM NASAL CAVITY/SINUS
161	MALIGNANT NEOPLASM LARYNX
162	MAL NEOPLASM TRACHEA/LUNG
163	MALIGNANT NEOPLASMPL PLEURA
164	MAL NEOPLASM THYMUS/MEDIASTIN
170	MAL NEOPLASM BONE/ARTIC CART
174	MALIG NEOPLASM FEMALE BREAST
175	MALIG NEOPLASM MALE BREAST
176	KAPOSI'S SARCOMA
185	MALIGN NEOPLASMPL PROSTATE
186	MALIGN NEOPLASMPL TESTIS
188	MALIGN NEOPLASMPL BLADDER
189	MAL NEOPLASM URINARY NEC/NOS
191	MALIGNANT NEOPLASM BRAIN
192	MAL NEOPLASM NERVE NEC/NOS
194	MAL NEOPLASM OTHER ENDOCRINE
195	MAL NEOPLASM OTH/ILL-DEF SITE
196	MALIG NEOPLASM LYMPH NODES
197	SECONDARY MAL NEOPLASM GI/RESP
198	SEC MALIG NEOPLASM OTH SITES
199	MALIGNANT NEOPLASM NOS
200	LYMPHOSARC/RETICULOSARC
201	HODGKIN'S DISEASE
202	OTH MAL NEOPLASM LYMPH/HISTIO
203	MULTIPLE MYELOMA ET AL
235	UNCERTAIN BEHAV NEOPLASM GI/RESP
236	UNCERTAIN BEHAV NEOPLASM GU
237	UNCERTAIN NEOPLASM ENDOCRINE/NERV
238	UNCERTAIN BEHAV NEOPLASM NEC/NOS
CANC2	Cancer Class II	25.92
172	MALIGNANT MELANOMA SKIN
179	MALIG NEOPLASM UTERUS NOS
182	MALIG NEOPLASM UTERUS BODY
183	MAL NEOPLASM UTERINE ADNEXA
184	MAL NEOPLASM FEMALE GEN NEC/NOS
190	MALIGNANT NEOPLASM EYE
193	MALIGN NEOPLASM THYROID
233	CA IN SITU BREAST/GU
234	CA IN SITU NEC/NOS
239	UNSPECIFIED NEOPLASM
LEUK	Leukemia	92.92
204	LYMPHOID LEUKEMIA
205	MYELOID LEUKEMIA
206	MONOCYTIC LEUKEMIA
207	OTHER SPECIFIED LEUKEMIA
208	LEUKEMIA-UNSPECIF CELL
THYR	Disorders Of Thyroid	15.71
242	THYROTOXICOSIS
244	ACQUIRED HYPOTHYROIDISM
245	THYROIDITIS
246	OTHER DISORDERS OF THYROID
*250	DIABETES MELLITUS	26.22
*272.7	LIPIDOSES (GAUCHER'S DISEASE)	122.21
277	METABOLISM DISORDER NEC/NOS	45.98
282.6	SICKLE-CELL ANEMIA	25.14
284	APLASTIC ANEMIA	72.01
*HEMOP	Hemophilia	89.55
286.0	CONGENITAL FACTOR VIII DISORDER
286.1	CONGENITAL FACTOR IX DISORDER
286.2	CONGENITAL FACTOR XI DISORDER
AX/BU	Anorexia/Bulimia	20.29
307.1	ANOREXIA NERVOSA
307.51	BULIMIA
*340	MULTIPLE SCLEROSIS	18.65
PARAL	Paralysis	52.17
342	HEMIPLEGIA
344.0	QUADRIPLEGIA NOS
344.1	PARAPLEGIA NOS
343	INFANTILE CEREBRAL PALSY	32.85
EPIL	Epilepsy	28.06
345.4	PSYCHOMOTOR EPILEPSY
345.5	PARTIAL EPILEPSY NEC
345.9	EPILEPSY NOS
358.0	MYASTHENIA GRAVIS	17.72
CHRNH	Chronic Rheumatic Heart Disease	42.02
394	DISEASES OF MITRAL VALVE
395	DISEASES OF AORTIC VALVE
396	MITRAL/AORTIC VALVE DISORDERS
398	OTH RHEUMATIC HEART DISEASE
410	ACUTE MYOCARDIAL INFARCTION	30.50
411	OTHER ACUTE ISCHEMIC HEART DISEASE	14.86
413	ANGINA PECTORIS	11.47
414	OTHER CHRONIC ISCHEMIC HEART DISEASE	31.93
416	CHRONIC PULMONARY HEART DISEASE	40.16
424	OTHER ENDOCARDIAL DISEASE	27.93
426	CONDUCTION DISORDERS	18.92
427	CARDIAC DYSRHYTHMIAS	16.93
HFAIL	Heart Failure	22.51
428.0	CONGESTIVE HEART FAILURE
428.1	LEFT HEART FAILURE
430	SUBARACHNOID HEMORRHAGE	77.45
431	INTRACEREBRAL HEMORRHAGE	43.24
ARTHE	Atherosclerosis	30.69
440.0	AORTIC ATHEROSCLEROSIS
440.1	RENAL ARTERY ATHEROSCLEROSIS
ANEUR	Aneurysm	56.29
441	AORTIC ANEURYSM
442	OTHER ANEURYSM
*493	ASTHMA	13.64
496	CHRONIC AIRWAY OBSTRUCTION NEC	21.37
531	GASTRIC ULCER	17.30
555.0	REGIONAL ENTERITIS, SMALL INTESTINE	41.47
571	CHRONIC LIVER DISEASE/CIRRHOSIS	34.64
572	SEQUELA OF CHRONIC LIVER DISEASE	65.44
577.1	CHRONIC PANCREATITIS	33.50
585	CHRONIC RENAL FAILURE	52.53
MATRN	Maternity	10.01
630	HYDATIDIFORM MOLE
631	OTHER ABNORMAL PRODUCT OF CONCEPTION
632	MISSED ABORTION
633	ECTOPIC PREGNANCY
634	SPONTANEOUS ABORTION
640	HEMORRHAGE IN EARLY PREGNANCY
641	ANTEPART HEMORRHAGE & PLACENTA PREVIA
642	HYPERTENSION COMPLICATING PREGNANCY
643	EXCESS VOMITING IN PREGNANCY
644	EARLY/THREATENED LABOR
645	PROLONGED PREGNANCY
646	OTHER COMPLICATIONS OF PREGNANCY
647	INFECTIVE DISORDER IN PREGNANCY
648	OTHER CURRENT CONDITIONS IN PREGNANCY
650	NORMAL DELIVERY
651	MULTIPLE GESTATION
652	MALPOSITION OF FETUS
653	DISPROPORTION
654	ABNORMAL PELVIC ORGAN IN PREGNANCY
655	FETAL ABNORMALITY AFFECTING MOTHER
656	OTH FETAL PROBLEM AFFECTING MOTHER
657	POLYHYDRAMNIOS
658	OTHER AMNIOTIC CAVITY PROBLEM
659	OTHER INDICATIONS FOR CARE IN DELIVERY
660	OBSTRUCTED LABOR
661	ABNORMAL FORCES OF LABOR
662	LONG LABOR
663	UMBILICAL CORD COMPLICATIONS
664	PERINEAL TRAUMA W/DELIVERY
665	OTHER OBSTETRICAL TRAUMA
666	POSTPARTUM HEMORRHAGE
667	RETAIN PLACENTA W/O HEMORRHAGE
668	COMPLICATED ANESTHESIA IN DELIVERY
669	OTHER COMPLICATIONS OF LABOR/DELIVERY
670	MAJOR PUERPERAL INFECTION
671	VENOUS COMPLICATIONS IN PREGNANCY
672	PUERPERAL PYREXIA NOS
673	OB PULMONARY EMBOLISM
674	PUERPERAL COMPLICATIONS NEC/NOS
675	INFECTIONS OF BREAST IN PREGNANCY
676	OTHER BREAST/LACT DISORDERS W/ PREGNANCY
V22	NORMAL PREGNANCY
V23	SUPERVISION HIGH-RISK PREGNANCY
V24	POSTPARTUM CARE/EXAM
707.0	DECUBITUS ULCER	49.94
707.1	CHRONIC ULCER OF LEG	34.87
710.0	SYSTEMIC LUPUS ERYTHEMATOSUS	23.17
710.1	SYSTEMIC SCLEROSIS	54.12
ARTHR	Arthritis	25.25
714.0	RHEUMATOID ARTHRITIS
715.0	GENERAL OSTEOARTHROSIS
737.3	SCOLIOSIS	51.72
CSCAN	Anomalies of Cardiac Septal Closure	61.35
745.1	TRANSPOS OF GREAT VESSEL
745.2	TETRALOGY OF FALLOT
745.3	COMMON VENTRICLE
745.4	VENTRICULAR SEPTAL DEFECT
745.5	SECUNDUM ARTRIAL SEPTAL DEFECT
745.6	ENDOCARD CUSHION DEFECTS
746	OTHER CONGENITAL ANOMALIES OF HEART	73.20
747	OTHER CONGENITAL ANOMALIES OF CIRCULATORY SYSTEM	39.23
PREMI	Premature Infants	60.49
765	SHORT GESTATION/LOW BIRTHWEIGHT
769	RESPIRATORY DISTRESS SYNDROME	60.12
770.0	CONGENITAL PNEUMONIA
952	SPINAL CORD INJURY W/O FRACTURE	75.15
Members without Specified Medical Condition		0.73

*Condition may be satisfied via overnight inpatient stay OR $5,000 in paid claims in the 6-month period where a portion are for the given diagnosis.

NEC = Not Elsewhere Classified

NOS = Not Otherwise Specified

(k) Reporting requirements, payments to the pools, or collections from the pools under this section shall not be required in 2005 or 2006.

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