Title: Section 732-2.5 - Contracts

732-2.5 Contracts.

(a) PPOs shall have written contracts with all providers in the network.

(1) Such contracts shall be made available for review by the commissioner upon request.

(2) The PPO shall develop and, upon request, make available to prospective providers, written application procedures and minimum qualification requirements which the provider must meet in order to be considered by the PPO.

(3) Unless otherwise specified in contract, a PPO shall not terminate a contract with a provider unless it gives the provider a written explanation of the reasons for the proposed termination and an opportunity for a review or hearing. Either party to a contract, however, may, on sixty day notice, exercise a right of non-renewal at the expiration of the contract period or, for a contract without a specific expiration date, on each January first occurring after the contract has been in effect for at least one year. Such non-renewal shall not constitute a termination.

(4) Unless otherwise specified in contract, a provider may not terminate a contract with a PPO except upon a material breach of contract by the PPO. Such terminations shall be reported to the chair and shall take effect only after arrangements for the continuing care of affected claimants, acceptable to the commissioner and such claimants, are effected.

(b) A PPO may enter into a management contract with an entity to oversee the management of the day to day activities of the PPO with respect to the performance of various services including: management information systems, utilization review, payment and medical dispute resolution and quality assurance. However, a PPO may not enter into a management contract with a self-insured employer, an insurance carrier or with any entity owned or controlled by, or affiliated with such carrier to oversee the management of the day to day activities of the PPO with respect to the performance of the following services: quality assurance and medical dispute resolution. Any such contract shall be effective only with the prior written consent of the commissioner, and shall include the following:

(1) a description of the proposed role of the PPO governing authority during the term of the proposed management contract. The description shall clearly reflect retention by the governing authority of the PPO of ongoing responsibility for statutory and regulatory compliance;

(2) a provision that clearly recognizes that the responsibilities of the governing authority of the PPO are in no way obviated by entering a management contract, and that any powers not specifically delegated to the management contractor through the provisions of the contract remain with the governing authority of the PPO;

(3) a clear acknowledgement of the authority of the commissioner to terminate the contract, when a determination is made that the PPO is not providing adequate care or otherwise assuring the health, safety and/or welfare of the claimants;

(4) a provision that annual reports on the financial operations and any other operational data requested by the governing authority of the PPO, the commissioner or chair, will be provided by the management contractor;

(5) a provision stating that the management contract approved by the department shall be the sole agreement between the management contractor and the governing authority of the PPO for the purpose of management of the PPO and payment to the management contractor for management services, and that any amendments or revisions to the management contract shall be effective only with the prior written consent of the commissioner; and

(6) specification of payment terms that are reasonable and do not jeopardize the financial security of the PPO.