806 KAR 17:100. Certificate of filing for provider-sponsored networks

Link to law: http://www.lrc.ky.gov/kar/806/017/100.htm
Published: 2015

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      806 KAR 17:100.

Certificate of filing for provider-sponsored networks.



304.17A-100(6), 304.17A-300, 304.17A-310


KRS 304.2-110(1), 304.17A-300, 304.17A-310


AND CONFORMITY: KRS 304.2-110(1) provides that the executive

director may promulgate reasonable administrative regulations

necessary for or as an aid to the effectuation of any provision of the Kentucky

Insurance Code. KRS 304.17A-300 requires that provider sponsored networks

obtain a certificate of filing before doing business in Kentucky. This

administrative regulation sets forth the requirements for applying for a

certificate of filing.


      Section 1.

Definitions. A provider-sponsored network is a provider sponsored integrated

health delivery network as defined in KRS 304.17A-100(6).


      Section 2. A

provider-sponsored network shall apply for and obtain a certificate of filing

from the executive director in order to provide,

directly or through arrangements with others, a health benefit plan to consumers

voluntarily enrolled with the organization on a per capita or a predetermined,

fixed prepayment basis.


      Section 3. (1) Each

application for a certificate of filing for a provider-sponsored network shall

be filed on Form 996 and verified by an officer or authorized representative of

the applicant.

      (2) Each application

shall set forth or be accompanied by the following:

      (a) Name, address,

principal place of business, owners, officers, managers, and sponsors of

provider-sponsored networks.

      (b) Address where

books and records of the provider-sponsored network will be maintained at all


      (c) The providers

who sponsor, own, govern, or manage the provider-sponsored network shall

provide a copy of their licenses and affidavit confirming good standing with

their licensure board.

      (d) A copy of the

organizational documents of the applicant including:

      1. Articles of


      2. Articles of


      3. Partnership


      4. Trust agreement;

      5. Bylaws;

      6. Organizational

chart; and

      7. Other applicable

documents and amendments.

      (e) A copy of the

policies, procedures, and other documents explaining how the provider-sponsored

network will:

      1. Administer health


      2. Have ability,

experience, and structure to arrange for appropriate level and type of health

care services;

      3. Conduct

utilization management activities;

      4. Achieve, monitor,

and evaluate the quality and cost effectiveness of care provided;

      5. Monitor access to

its provider network; and

      6. Use standardized

electronic claims and billing processes and formats.

      (f) Names,

addresses, and biographical information of the following:

      1. Board of


      2. Board of


      3. Executive

committee or other governing body;

      4. Each owner of

five (5) percent or more of the provider-sponsored network;

      5. Principal


      6. Partners; and

      7. Persons

responsible for the conduct of the applicants affairs and day to day


      (g) Financial

statements audited by an independent certified public accountant in conformity

with statutory accounting practices prescribed or otherwise permitted by the executive

director that reflect the following:

      1. Financial

position of the applicant;

      2. Results of its


      3. Cash flows; and

      4. Changes in

capital and surplus.

      (h) If the "as

of" date of the financial statements filed pursuant to paragraph (f) of

this subsection is more than ninety (90) days from the date of the application,

interim financial statements compiled by an independent certified public

accountant as of a date less than ninety (90) days from the application

containing the same information as the audited financial statements.

      (i) List of

providers including name, address, license number, and health services


      (j) A statement or

map reasonably describing the counties to be served and written assurance that

health services will be provided to enrollees within fifty (50) miles of their


      (k) Proposed

contracts and agreements including the following:

      1. Applications or

individual enrollment forms;

      2. Master contract

forms for group enrollment;

      3. Evidence of

coverage or handbook;

      4. Riders or

endorsements; and

      5. Rates with

actuarial justifications.

      (l) A copy of the

following professional agreements:

      1. Provider


      2. Third party

administrators agreements;

      3. Service


      4. Administrative

agreements; and

      5. Reinsurance


      (m) A copy of

grievance procedures to be utilized for the investigation and resolution of

enrollee and provider complaints and grievances.

      (n) A copy of the

applicant’s plan for handling insolvency as required by KRS 304.17A-310(6).

      (o) Financial

program setting forth a three (3) year projection of operations on a quarterly

basis which shall include the following:

      1. Detailed enrollment


      2. Projection of

balance sheets;

      3. Projection of

cash flow statements showing any capital expenditures;

      4. Projection of

purchase and sale of investments and deposits;

      5. Projection of

income and expense statements anticipated from the start of operation until the

organization has had net income for one (1) year; and

      6. Statement of the

sources of working capital as well as other sources of funding.


      Section 4. If any of

the information filed with the office pursuant to Section 3 of this

administrative regulation changes or becomes incorrect, then the

provider-sponsored network shall immediately notify the office in writing of

the change and immediately give the office the correction.


      Section 5. Form

numbered "996", revised June 1996, is prescribed by the office and

incorporated by reference. Copies may be obtained from the Office of Insurance,

P.O. Box 517, 215 West Main Street, Frankfort, Kentucky 40601,

Monday through Friday, 8 a.m. to 4:30 p.m. (ET). (23 Ky.R. 1822; eff. 12-11-96;

TAm eff. 8-9-2007.)