20-548 Changes to the Financial Survey and Statement Requirements
Date: 07/21/20
This information applies to Participating Physician Groups (PPGs).
RBOs: Be prepared to take action on upcoming amendments
The Department of Managed Health Care (DMHC) All Plan Letter (APL) 19-016 explains amendments to the Risk-Bearing Organization (RBO) regulations.1 The amendments clarify RBO reporting standards and requirements to ensure RBOs comply with the financial solvency standards.
This update applies to Health Net’s Cal MediConnect Plan (Medicare-Medicaid Plan) capitated participating physician groups (PPGs). The amended regulations were effective October 1, 2019, and RBOs have a phase-in period for the amended cash-to-claims ratio and positive tangible net equity (TNE) requirements, which go into effect on
October 1, 2020.
New requirements
Amended regulations:
- Clarify the definition of an RBO, which includes one that contracts directly with Health Net, and an RBO that arranges for health care services for the plan’s members, but does not contract directly with the health plan.
- Update the quarterly and annual financial survey report forms and the corrective action plan form.
- Require RBOs, regardless of the number of members assigned, to submit quarterly and annual financial survey reports.
- Clarify when an RBO and its affiliate must provide financial survey reports on a combined basis.
- Define terms, such as cash-to-claims ratio, sponsoring organization, sub-delegating organization, working capital, and TNE.
- Restrict RBOs’ use of a sponsoring organization for reducing liabilities or increasing cash for purposes of calculating TNE, working capital, and cash-to-claims ratio.
Health Net monitors and evaluates the financial viability of its delegated and capitated participating providers to comply with the changes outlined in APL 19-016.
If you have questions about this update, contact the Health Net Provider Services Center by email at provider_services@healthnet.com within 60 days, by telephone or through the Health Net provider website as listed in the right-hand column.
1Refer to California Code of Regulations (CCRs), tit. 28, §§ 1300.75.4, 1300.75.4.1, 1300.75.4.2, 1300.75.4.5, 1300.75.4.7, 1300.75.4.8, and 1300.76.
Additional information
If you have questions regarding the information above, contact the Health Net Provider Services Center at:
Line of Business | Telephone Number | Email Address |
Cal MediConnect – Los Angeles County | 1-855-464-3571 | provider_services@healthnet.com |
Cal MediConnect – San Diego County | 1-855-464-3572 |