Article 32.--HEALTH MAINTENANCE ORGANIZATIONS AND MEDICARE PROVIDER ORGANIZATIONS
40-3231.Uncovered expenditure deposit; amount;withdrawal, when; commissioner's duties; rules and regulations.(a) If uncovered expenditures exceed 10% of totalhealth care expenditures for two consecutive months, a health maintenanceorganization shall place an uncovered expenditure insolvency deposit with thecommissioner, with an organization or trustee acceptable to the commissionerthrough which a custodial or controlled account is maintained, cash orsecurities that are acceptable to the commissioner. The deposit at alltimes shall have a fair market value in an amount 120% of the healthmaintenanceorganization's outstanding liability for uncovered expenditures for enrolleesin this state, including incurred but not reported claims, and shall becalculated as of the first day of the month and maintained for the remainder ofthe month. If a health maintenance organization is not otherwise required tofile a quarterly report, such health maintenance organization shall file areport within 45 days of the end of the calendar quarter with informationsufficient to demonstrate compliance with this section.
(b) The deposit required under this section shall be in addition to thedeposit required under K.S.A. 40-3227, and amendments thereto, and shall bedeemed to be an admitted asset of the health maintenance organization in thedetermination of such health maintenance organization's net worth. All incomefrom deposits or trust accounts shall be deemed to be assets of the healthmaintenance organization and may be withdrawn from the deposit or accountquarterly with the approval of the commissioner.
(c) A health maintenance organization that has made a deposit may withdrawthat deposit or any part of the deposit if: (1) A substitute deposit of cashor securities of equal amount and value ismade; (2) the fair market value of such substitute deposit exceeds the amountofthe required deposit; or (3) the deposit required under subsection (a) isreduced or eliminated.Deposits, substitutions or withdrawals may be made only with the prior writtenapproval of the commissioner.
(d) The deposit required under this section shall be held in trust and may beused only as provided under this section. The commissioner may use all or anyportion of the deposit of an insolvent health maintenance organization foradministrative costs associated with administering such deposit and the paymentof any claim of an enrollee of this state for uncovered expenditures in thisstate. Each claim for uncovered expenditures shall be paid on a pro rata basisbased on assets available to pay the ultimate liability for incurredexpenditures. A partial distribution may be made pending final distribution.Any amount of such deposit remaining shall be paid into the liquidation orreceivership of the health maintenance organization.
(e) The commissioner by regulation may prescribe the time, manner and formfor filing claims under subsection (d).
(f) The commissioner by regulation or order may require health maintenanceorganizations to file annual, quarterly or more frequent reports deemednecessary to demonstrate compliance with this section. The commissioner mayrequire that the reports include liability for uncovered expenditures as wellas an audit opinion.
(g) The deposit required under this section may be satisfied through otherarrangement acceptable to the commissioner including parental guarantees andletters of credit.
(h) The commissioner may adopt rules and regulations to implement thissection.
Article 32.--HEALTH MAINTENANCE ORGANIZATIONS AND MEDICARE PROVIDER ORGANIZATIONS
40-3231.Uncovered expenditure deposit; amount;withdrawal, when; commissioner's duties; rules and regulations.(a) If uncovered expenditures exceed 10% of totalhealth care expenditures for two consecutive months, a health maintenanceorganization shall place an uncovered expenditure insolvency deposit with thecommissioner, with an organization or trustee acceptable to the commissionerthrough which a custodial or controlled account is maintained, cash orsecurities that are acceptable to the commissioner. The deposit at alltimes shall have a fair market value in an amount 120% of the healthmaintenanceorganization's outstanding liability for uncovered expenditures for enrolleesin this state, including incurred but not reported claims, and shall becalculated as of the first day of the month and maintained for the remainder ofthe month. If a health maintenance organization is not otherwise required tofile a quarterly report, such health maintenance organization shall file areport within 45 days of the end of the calendar quarter with informationsufficient to demonstrate compliance with this section.
(b) The deposit required under this section shall be in addition to thedeposit required under K.S.A. 40-3227, and amendments thereto, and shall bedeemed to be an admitted asset of the health maintenance organization in thedetermination of such health maintenance organization's net worth. All incomefrom deposits or trust accounts shall be deemed to be assets of the healthmaintenance organization and may be withdrawn from the deposit or accountquarterly with the approval of the commissioner.
(c) A health maintenance organization that has made a deposit may withdrawthat deposit or any part of the deposit if: (1) A substitute deposit of cashor securities of equal amount and value ismade; (2) the fair market value of such substitute deposit exceeds the amountofthe required deposit; or (3) the deposit required under subsection (a) isreduced or eliminated.Deposits, substitutions or withdrawals may be made only with the prior writtenapproval of the commissioner.
(d) The deposit required under this section shall be held in trust and may beused only as provided under this section. The commissioner may use all or anyportion of the deposit of an insolvent health maintenance organization foradministrative costs associated with administering such deposit and the paymentof any claim of an enrollee of this state for uncovered expenditures in thisstate. Each claim for uncovered expenditures shall be paid on a pro rata basisbased on assets available to pay the ultimate liability for incurredexpenditures. A partial distribution may be made pending final distribution.Any amount of such deposit remaining shall be paid into the liquidation orreceivership of the health maintenance organization.
(e) The commissioner by regulation may prescribe the time, manner and formfor filing claims under subsection (d).
(f) The commissioner by regulation or order may require health maintenanceorganizations to file annual, quarterly or more frequent reports deemednecessary to demonstrate compliance with this section. The commissioner mayrequire that the reports include liability for uncovered expenditures as wellas an audit opinion.
(g) The deposit required under this section may be satisfied through otherarrangement acceptable to the commissioner including parental guarantees andletters of credit.
(h) The commissioner may adopt rules and regulations to implement thissection.
Article 32.--HEALTH MAINTENANCE ORGANIZATIONS AND MEDICARE PROVIDER ORGANIZATIONS
40-3231.Uncovered expenditure deposit; amount;withdrawal, when; commissioner's duties; rules and regulations.(a) If uncovered expenditures exceed 10% of totalhealth care expenditures for two consecutive months, a health maintenanceorganization shall place an uncovered expenditure insolvency deposit with thecommissioner, with an organization or trustee acceptable to the commissionerthrough which a custodial or controlled account is maintained, cash orsecurities that are acceptable to the commissioner. The deposit at alltimes shall have a fair market value in an amount 120% of the healthmaintenanceorganization's outstanding liability for uncovered expenditures for enrolleesin this state, including incurred but not reported claims, and shall becalculated as of the first day of the month and maintained for the remainder ofthe month. If a health maintenance organization is not otherwise required tofile a quarterly report, such health maintenance organization shall file areport within 45 days of the end of the calendar quarter with informationsufficient to demonstrate compliance with this section.
(b) The deposit required under this section shall be in addition to thedeposit required under K.S.A. 40-3227, and amendments thereto, and shall bedeemed to be an admitted asset of the health maintenance organization in thedetermination of such health maintenance organization's net worth. All incomefrom deposits or trust accounts shall be deemed to be assets of the healthmaintenance organization and may be withdrawn from the deposit or accountquarterly with the approval of the commissioner.
(c) A health maintenance organization that has made a deposit may withdrawthat deposit or any part of the deposit if: (1) A substitute deposit of cashor securities of equal amount and value ismade; (2) the fair market value of such substitute deposit exceeds the amountofthe required deposit; or (3) the deposit required under subsection (a) isreduced or eliminated.Deposits, substitutions or withdrawals may be made only with the prior writtenapproval of the commissioner.
(d) The deposit required under this section shall be held in trust and may beused only as provided under this section. The commissioner may use all or anyportion of the deposit of an insolvent health maintenance organization foradministrative costs associated with administering such deposit and the paymentof any claim of an enrollee of this state for uncovered expenditures in thisstate. Each claim for uncovered expenditures shall be paid on a pro rata basisbased on assets available to pay the ultimate liability for incurredexpenditures. A partial distribution may be made pending final distribution.Any amount of such deposit remaining shall be paid into the liquidation orreceivership of the health maintenance organization.
(e) The commissioner by regulation may prescribe the time, manner and formfor filing claims under subsection (d).
(f) The commissioner by regulation or order may require health maintenanceorganizations to file annual, quarterly or more frequent reports deemednecessary to demonstrate compliance with this section. The commissioner mayrequire that the reports include liability for uncovered expenditures as wellas an audit opinion.
(g) The deposit required under this section may be satisfied through otherarrangement acceptable to the commissioner including parental guarantees andletters of credit.
(h) The commissioner may adopt rules and regulations to implement thissection.
