Financial Survey Filing Requirements

Provider Type

Participating Physician Groups (PPG)
Hospitals

The following Department of Managed Health Care (DMHC) filing requirements are included for those participating physician groups (PPGs) that assume financial risk on a capitated or fixed periodic payment basis for the cost of health care services rendered to health plan members (sections 1300.75.4, 1300.75.4.2, 1400.75.4.7, 1300.75.4.8, and 1300.76 of Title 28 of the California Code of Regulations (CCR)).

PPGs and hospitals must submit the quarterly and annual audited financial statements to Health Net’s Financial Oversight Department.

Filing Types	Requirements	Filing Period	Filing Deadline
Quarterly Financial Survey	PPGs submit an electronic quarterly financial survey report to DMHC and Health Net no later than 45 calendar days following the close of each quarter of its fiscal year. (Note: PPGs with financial statements prepared in the fiscal year submit the most recent quarter.) Hospitals submit quarterly financial surveys to Health Net directly. (Note: Hospitals with financial statements prepared in the fiscal year must submit the most recent quarter.)	Q1 Q2 Q3 Q4	May 15 August 15 November 15 February 15
Annual Financial Survey	PPGs submit an electronic annual audited financial survey including auditors notes and opinion letter to DMHC and Health Net not more than 150 calendar days after the close of PPG's fiscal year determined by the DMHC, and based upon PPG's annual audited financial statement prepared in accordance with generally accepted auditing standards. Hospitals submit annual audited financial surveys including auditors notes and opinion letter to Health Net directly.	Annual	May 31

Filing Types

Requirements

Filing Period

Filing Deadline

Quarterly Financial Survey

PPGs submit an electronic quarterly financial survey report to DMHC and Health Net no later than 45 calendar days following the close of each quarter of its fiscal year. (Note: PPGs with financial statements prepared in the fiscal year submit the most recent quarter.)

Hospitals submit quarterly financial surveys to Health Net directly. (Note: Hospitals with financial statements prepared in the fiscal year must submit the most recent quarter.)

May 15

August 15

November 15

February 15

Annual Financial Survey

PPGs submit an electronic annual audited financial survey including auditors notes and opinion letter to DMHC and Health Net not more than 150 calendar days after the close of PPG's fiscal year determined by the DMHC, and based upon PPG's annual audited financial statement prepared in accordance with generally accepted auditing standards.

Hospitals submit annual audited financial surveys including auditors notes and opinion letter to Health Net directly.

Annual

May 31

If a PPG organization reports deficiencies in any of the six DMHC grading criteria listed below, the PPG must submit a self-initiated corrective action plan (CAP) proposal in an electronic format to DMHC and Health Net (section 1300.75.4.8 of Title 28 of the CCRs). The grading criteria are:

tangible net equity (TNE): must be positive
required tangible net equity: Positive TNE shall be at least equal to the greater of:
- (A) one percent (1%) of annualized revenues; or,
- (B) four percent (4%) of annualized non-capitated medical expenses.
working capital: must be positive
cash-to-claims ratio: 0.75
claims timeliness percentage: 95%
incurred but not reported (IBNR) methodology, both documented and used in estimation of IBNR liabilities: three months

Late Filing for Financial Survey Requirements

Health Net is required by the DMHC to follow up on late filing of the financial survey (section 1300.75.4.5 of Title 28 of the CCR). As soon as the PPG files with DMHC, the PPG must immediately submit the confirmation of the filing to the Financial Oversight Department. Late-filing PPGs can be downloaded from the DMHC website.