Mo. Code Regs. tit. 20 § 200-1.040

Current through Register Vol. 49, No.12, June 17, 2024

Section 20 CSR 200-1.040 - Financial Standards for Health Maintenance Organizations

PURPOSE: This rule implements sections 354.410, 354.415, 354.450, 354.455, 354.470.1(4) and 354.480, RSMo as this rule is necessary and proper to carry out the provisions of sections 354.400-354.550, RSMo

(1) A health maintenance organization (HMO) must maintain a capital account pursuant to section 354.410.6, RSMo. The capital account is the equivalent of net worth and shall be equal to the assets of the HMO less its liabilities, which is also the equivalent of "net of any accrued liabilities" as used in section 354.410.6, RSMo. Assets and liabilities will be admitted and determined under the provisions of this rule.

(2) Assets of an HMO will be admitted and included in determining the financial condition of the HMO only if included within one (1) or more of the following list of admissible assets:

(A) Investable funds under section 354.450, RSMo are as follows:

1. Any asset or investment described in and limited by sections 376.291-376.307, RSMo; and

2. Any asset or investment described in and limited by section 354.415.1(1), RSMo. The requirements of section 354.415.2, RSMo apply as detailed in the statute; and

(B) Other assets as follows:

1. Reinsurance recoverables pursuant to section 375.246, RSMo;

2. Data processing system pursuant to section 375.325, RSMo;

3. Premium receivable from any agency of this state, of any political subdivision of this state or of the United States;

4. Accrued interest receivable, if according to statements of statutory accounting principles for HMOs such interest is probably collectible;

5. Inventory of medical, pharmaceutical and optical supplies, furniture, equipment and fixtures, but only if according to statements of statutory accounting principles for HMOs such supplies, furniture, equipment and fixtures are used by the HMO in connection with the direct provision of health care services;

6. Funds paid by the HMO into escrow for the purpose of purchasing or building offices or medical facilities but only if according to statements of statutory accounting principles for HMOs such offices or facilities are for use by the HMO in connection with the direct provision of health care services;

7. Goodwill and other intangible assets. Any goodwill or intangible asset must be amortized on a straight-line basis over a period of five (5) years or less. Any goodwill or intangible asset accrued after September 1, 1989 will be admissible only with the prior consent of the director;

8. Amounts receivable from HMOs, health service corporations, insurance companies, self-insurance plans, and third-party tortfeasors on account of coordination of benefits or subrogation, limited to the less of the actual amounts receivable or the amounts received during the prior year;

9. Any other asset expressly approved in writing by the director.

(3) No asset shall be admissible except as stated in section (2) and in accordance with the statements of statutory accounting principles.

(4) Liabilities shall be determined in accordance with the statements of statutory accounting principles.

(5) In determining whether an HMO is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees under sections 354.410.1(3) and 354.470.1(4), RSMo and whether the continued operation of the HMO would be hazardous either to the enrollees or to the people of this state under section 354.480, RSMo, the director will consider compliance with the standards of sections 354.410, 375.539, and 375.1250-375.1275, RSMo.

(6) On any policy of insolvency insurance, the named insured must include the director of the department and his/her successor(s) in office.

20 CSR 200-1.040

AUTHORITY: section 354.485, RSMo 2000.* This rule was previously filed as 4 CSR 190-11.125. Original rule filed April 19, 1989, effective Sept. 1, 1989. Amended: Filed Sept. 15, 1992, effective June 7, 1993. Amended: Filed Nov. 23, 1998, effective July 30, 1999. Amended: Filed Dec. 14, 2000, effective July 30, 2001.

Amended by Missouri Register March 15, 2019/Volume 44, Number 6, effective 4/30/2019

*Original authority: 354.485, RSMo 1983.