The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

Act—The act of June 11, 1986 (P. L. 226, No. 64), which amends The Insurance Company Law of 1921 (40 P. S. § § 341—991).

Admitted assets—Assets set forth in the definition of insolvency in section 503 of The Insurance Department Act of one thousand nine hundred and twenty-one (40 P. S. § 221.3), as admitted assets.

Commissioner—The Insurance Commissioner of the Commonwealth.

Department—The Insurance Department of the Commonwealth.

Enrollee—An individual entitled to receive the benefits of a preferred provider organization with respect to health care services.

Enrollee literature—aterials and communications which a preferred provider organization distributes or makes available for advertising or other purposes, which discuss the provisions, limitations or conditions of benefits available to an enrollee of a preferred provider organization.

Health care insurer—A company which is a risk-assuming preferred provider organization, or licensed to do the business of accident and health insurance in this Commonwealth, or both.

Health care purchaser—A person, partnership, association, governmental unit or corporation which provides health care coverage to its employes or members and their dependents by reimbursing the covered persons directly for covered health services or by contracting with a health care insurer, nonprofit professional health service corporation, nonprofit hospital plan corporation or health maintenance organization to provide, arrange for the provision of, reimburse or pay for covered health services. The term does not include a health care insurer.

Licensed insurer—A company licensed to do the business of accident and health insurance in this Commonwealth.

Physician—An individual licensed under the statutes of this Commonwealth to practice medicine and surgery within the scope of the Osteopathic Medical Practices Act (63 P. S. § § 271.1—271.18) or the Medical Practice Act of 1985 (63 P. S. § § 422.1—422.45).

Preferred provider arrangement—

1. (i) An arrangement established, operated, maintained or underwritten in whole or in part, by or on behalf of or in association with a health care insurer or purchaser in which the insurer or purchaser directly or indirectly does one or more of the following:

   1. (A) Enters into agreements with providers or physicians relating to health care services which may be rendered to enrollees, including agreements relating to the amounts to be charged by the provider or physician for services rendered.
   2. (B) Issues or administers policies or subscriber contracts in this Commonwealth which include incentives for the enrollee to use the services of a provider that has entered into an agreement with the insurer or purchaser.
   3. (C) Issues or administers policies or subscriber contracts in this Commonwealth that provide for reimbursement of services only if the services have been rendered by a provider or physician that has entered into an agreement with the insurer or purchaser.

2. (ii) A preferred provider arrangement may be established, operated, maintained or underwritten by one or more preferred provider organizations.

   Preferred provider organization—

3. (i) General. A person, partnership, association or corporation which establishes, operates, maintains or underwrites in whole or in part a preferred provider arrangement. The term does not include a provider or physician whose only involvement in the preferred provider arrangement is the performance of health care services, a nonprofit professional health service plan corporation, a nonprofit hospital plan corporation or a health maintenance organization.

4. (ii) Risk assuming preferred provider organization. A preferred provider organization which meets the definition in subparagraph (i) and has one or more of the following characteristics:

   1. (A) Assumption by the preferred provider organization of financial risk arising out of contractual liability to pay for or reimburse enrollees for covered health care services.
   2. (B) Participation in financial gains or losses of a health benefits plan based on aggregate measures of expenditures or utilization.
   3. (C) Participation in the overall financial risk of a health benefits plan by placing upper limits on future premium increases.
   4. (D) Other characteristics which create a financial risk to the preferred provider organization and arise out of the preferred provider arrangement.

5. (iii) Exclusion. The term ‘‘risk assuming preferred provider organization’’ does not include a third-party administrator, or a licensed insurer, when functioning solely as a third party administrator.

   Provider—A provider of a health care service licensed and authorized to perform a health care service which is a covered benefit under a health care plan offered by a purchaser or issued or administered by a health care insurer.

   Secretary—The Secretary of Health of the Commonwealth.

   Section 630—Section 630 of the act (40 P. S. § 764a).

Source

The provisions of this § 152.2 adopted March 6, 1987, effective March 7, 1987, 17 Pa.B. 974; corrected September 18, 1987, effective March 7, 1987, 17 Pa.B. 3741. Immediately preceding text appears at serial pages (118100) to (118102).

Cross References

This section cited in 31 Pa. Code § 154.2 (relating to definitions).