Hospital Reinsurance

Hospitals that receive capitation to provide institutional risk services are referred to as capitated dual-risk hospitals. Unless otherwise provided in the hospital's Provider Participation Agreement (PPA), the terms of the program are described below.

The capitated hospital's liability for institutional risk services provided to a Health Net member in a calendar year is limited to a negotiated amount. This amount is known as the attachment point or hospital reinsurance level.

When the capitated hospital provides institutional risk services that exceed the applicable hospital reinsurance level per member per calendar year, the hospital submits reinsurance requests for payment to the Health Net Reinsurance Unit. Capitated hospitals are required to purchase reinsurance from Health Net. The cost of hospital reinsurance is deducted from the hospital's monthly capitation, as stated in the PPA. However, if permitted under the hospital's PPA, the hospital may elect to purchase reinsurance from a third party. If a hospital elects to purchase reinsurance from a third party, it must provide Health Net with proof of insurance acceptable to Health Net in accordance with the PPA. Self-insurance or stated reserves for Incurred But Not Reported (IBNR) is not reinsurance.

Non-Covered items

The following charges are not included or payable through hospital reinsurance:

• Services eligible for payment through insured services, professional stop loss, eligibility guarantee, or out-of-area reinsurance.
• Services provided when the member is not eligible.
• Services not covered through the plan in which the member is enrolled.
• Services that are the PPG's liability and covered through capitation.
• Services provided in connection with workers' compensation or services for which benefits are reimbursable through coordination of benefits (COB) and third-party liability.
• Copayments required by a member's Health Net plan.

Requests for Payment Submission

Attach the following information to the hospital reinsurance request for payment:

• PPG Professional Batch form (PDF) and cover letter from the hospital specifying that the request for payment is under the hospital reinsurance program.
• Dual-risk claims from treating hospitals, with Explanation of Benefit (EOB) or explanation of payment (EOP) by capitated hospital attached.
• Medical records and operation reports.

Requests for Payment Processing

Requests for payment are processed by calculating the total allowable amount. If the amount does not exceed the hospital's attachment point (refer to the hospital's PPA for the attachment point), the request for payment is denied. If the total allowable amount exceeds the attachment point, the amount exceeding the attachment point is credited to the hospital.