[Code of Federal Regulations]

[Title 42, Volume 4]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR438.116]



[Page 225]

 

                         TITLE 42--PUBLIC HEALTH

 

  CHAPTER IV--CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF 

                  HEALTH AND HUMAN SERVICES (CONTINUED)

 

PART 438_MANAGED CARE--Table of Contents

 

                Subpart C_Enrollee Rights and Protections

 

Sec.  438.116  Solvency standards.



    (a) Requirement for assurances (1) Each MCO, PIHP, and PAHP that is 

not a Federally qualified HMO (as defined in section 1310 of the Public 

Health Service Act) must provide assurances satisfactory to the State 

showing that its provision against the risk of insolvency is adequate to 

ensure that its Medicaid enrollees will not be liable for the MCO's, 

PIHP's, or PAHP's debts if the entity becomes insolvent.

    (2) Federally qualified HMOs, as defined in section 1310 of the 

Public Health Service Act, are exempt from this requirement.

    (b) Other requirements--(1) General rule. Except as provided in 

paragraph (b)(2) of this section, an MCO or PIHP, must meet the solvency 

standards established by the State for private health maintenance 

organizations, or be licensed or certified by the State as a risk-

bearing entity.

    (2) Exception. Paragraph (b)(1) of this section does not apply to an 

MCO or PIHP, that meets any of the following conditions:

    (i) Does not provide both inpatient hospital services and physician 

services.

    (ii) Is a public entity.

    (iii) Is (or is controlled by) one or more Federally qualified 

health centers and meets the solvency standards established by the State 

for those centers.

    (iv) Has its solvency guaranteed by the State.



[67 FR 41095, June 14, 2002; 67 FR 65505, Oct. 25, 2002]