A primary HMO that enters into a contract with an ANHC in which the ANHC agrees to arrange for or provide health care services, other than medical care or services ancillary to the practice of medicine, or a provider HMO in which the provider HMO agrees to arrange for or provide health care services on a risk-sharing or capitated risk arrangement on behalf of the primary HMO as part of the primary HMO delivery network shall:

1. (1) submit to the Texas Department of Insurance a monitoring plan setting out:

   1. (A) how the primary HMO will ensure that the ANHC or provider HMO has an effective administrative system for providing timely and accurate reimbursement to all physicians and providers under contract with the ANHC or provider HMO; and
   2. (B) how the primary HMO will ensure that all HMO functions which are delegated or assigned under contract with the ANHC or provider HMO are consistent with full compliance by the primary HMO with all regulatory requirements of the Texas Department of Insurance;

2. (2) file with the Texas Department of Insurance, pursuant to §11.301(5) of this title (relating to Filings for Information), a copy of the form of the written agreement with an ANHC or provider HMO that:

   1. (A) requires that the agreement cannot be terminated by the ANHC or provider HMO without 90 days written notice;
   2. (B) contains a hold-harmless provision providing that the ANHC or provider HMO and its contracted physicians and providers are prohibited from billing or attempting to collect from HMO members (except for authorized co-payments and deductibles) for covered services under any circumstance, including the insolvency of the primary HMO, ANHC or provider HMO;
   3. (C) contains a provision stating that nothing in the primary HMO-ANHC or primary HMO-provider HMO contract shall be construed to in any way limit the HMO's authority or responsibility to comply with all regulatory requirements of the Texas Department of Insurance;

   4. (D) includes the ANHC's or provider HMO's acknowledgment and agreement that:

      1. (i) the primary HMO is required to establish, operate and maintain a health care delivery system, quality assurance system, provider credentialing system and other systems and programs meeting Texas Department of Insurance and Texas Health Care Council standards and is directly accountable for compliance with such standards;
      2. (ii) the role of the ANHC or provider HMO in contracting with the primary HMO is limited to implementing certain systems of the primary HMO, utilizing standards approved by the primary HMO and subject to the primary HMO's oversight and monitoring of the ANHC's or provider HMO's performance; and
      3. (iii) the primary HMO may take whatever action is deemed necessary to assure that all HMO systems and functions which are delegated or assigned under the contract with the ANHC or provider HMO are in full compliance with all regulatory requirements of the Texas Department of Insurance;
   5. (E) requires the ANHC to make available to the primary HMO the ANHC's contracts with physicians and providers so as to ensure compliance with contractual requirements set out in subparagraphs (B) and (C) of this paragraph; and
   6. (F) requires the ANHC to provide the primary HMO with evidence of both financial solvency and financial ability to perform, such as a certified financial audit of the ANHC conducted by independent certified public accountants, utilizing generally accepted accounting and auditing principles;

   7. (G) requires the ANHC or provider HMO to provide the primary HMO on at least a monthly basis, in a usable form necessary for audit purposes, the data necessary for the HMO to comply with the Texas Department of Insurance, and Texas Health Care Council reporting requirements with respect to any services provided pursuant to the HMO-ANHC or HMO-provider HMO agreement, including the following data:

      1. (i) number of primary HMO enrollees served or assigned to the ANHC or primary HMO to receive services (including number added and terminated since the last reporting period);
      2. (ii) form of the contracts and subcontracts between the ANHC and physicians and providers who will be providing services to enrollees of the primary HMO and any material changes to the contracts and subcontracts;
      3. (iii) co-payments received by the ANHC or provider HMO;
      4. (iv) summary of the amounts paid by the ANHC or provider HMO to physicians and providers;
      5. (v) methods by which physicians and providers were paid by the ANHC or provider HMO (capitation, fee-for-services, other risk-sharing arrangements);
      6. (vi) utilization data;
      7. (vii) summary of the amounts paid by the ANHC or provider HMO for administrative services relating to the primary HMOs;
      8. (viii) time period that claims and debts related to claims owed by the ANHC or provider HMO have been pending;
      9. (ix) information required for the primary HMO to be able to file claims for reinsurance, coordination of benefits and subrogation;
      10. (x) provider-enrollee satisfaction data;
      11. (xi) complaint data;
      12. (xii) documentation of any inquiries and investigation of the ANHC or provider HMO, or any individual subcontracting physician or provider, made by regulatory agencies, and documentation of the final resolution of such an investigation; and
      13. (xiii) any other data necessary to assure proper monitoring and control of the primary HMO delivery network by the primary HMO;
3. (3) conduct an on-site audit of the ANHC or provider HMO no less frequently than annually, or more frequently upon indication of material non-compliance, to obtain information necessary to verify compliance with all regulatory requirements of the Texas Department of Insurance. Written documentation of each audit required by this paragraph shall be made available to the Texas Department of Insurance upon request; and
4. (4) take prompt action to correct any failure by the ANHC to comply with regulatory requirements of the Texas Department of Insurance relating to any matters delegated by the primary HMO to the ANHC and necessary to ensure the primary HMO's compliance with the regulatory requirements.

Source Note:The provisions of this §11.1604 adopted to be effective April 1, 1996, 21 TexReg 2253; amended to be effective December 8, 1997, 22 TexReg 11684.