N.Y. Insurance Law § 4321-a: Fund for standardized individual enrollee direct payment contracts

§ 4321-a. Fund for standardized individual enrollee direct payment

contracts. (a) The superintendent shall establish a fund from which

health maintenance organizations may receive reimbursement, to the

extent of funds available therefor, for claims paid by such health

maintenance organizations for members covered under standardized

individual enrollee direct payment contracts issued pursuant to section

four thousand three hundred twenty-one of this article. The fund

established by the superintendent pursuant to this section shall be

known as the direct payment stop loss fund. Commencing in calendar year

two thousand, health maintenance organizations shall be eligible to

receive reimbursement from the direct payment stop loss fund for ninety

percent of claims paid between twenty thousand and one hundred thousand

dollars in a calendar year for any member covered under a contract

issued pursuant to section four thousand three hundred twenty-one of

this article. For the purposes of this section, claims shall include

health care claims paid by a health maintenance organization on behalf

of a covered member pursuant to such standardized direct payment

contracts.

(b) The superintendent shall promulgate regulations setting forth

procedures for the operation of the direct payment stop loss fund and

the distribution of monies therefrom.

(c) Claims shall be reported and funds shall be distributed on a

calendar year basis. Claims shall be eligible for reimbursement only for

the calendar year in which the claims are paid. Once claims paid on

behalf of a member reach or exceed one hundred thousand dollars in a

given calendar year, no further claims paid on behalf of such member in

such calendar year shall be eligible for reimbursement.

(d) Each health maintenance organization shall submit a request for

reimbursement from the stop loss fund on a form prescribed by the

superintendent. Such request for reimbursement shall be submitted no

later than April first following the end of the calendar year for which

the reimbursement request is being made. The superintendent may require

health maintenance organizations to submit such claims data in

connection with the reimbursement request as he deems necessary to

enable him to distribute monies and oversee the operation of the direct

payment stop loss fund. The superintendent may require that such data be

submitted on a per member, aggregate and/or categorical basis.

(e) The superintendent shall calculate the total claims reimbursement

amount for all health maintenance organizations for the calendar year

for which claims are being reported.

(1) In the event that the total amount requested for reimbursement by

all health maintenance organizations for a calendar year exceeds funds

available for distribution for claims paid by all health maintenance

organizations during that same calendar year, the superintendent shall

provide for the pro-rata distribution of the available funds. Each

health maintenance organization shall be eligible to receive only such

proportionate amount of the available funds as the individual health

maintenance organization's total eligible claims paid bears to the total

eligible claims paid by all health maintenance organizations.

(2) In the event that (A) funds available for distribution for claims

paid by all health maintenance organizations during a calendar year

exceeds the total amount requested for reimbursement by all health

maintenance organizations during that same calendar year, and (B) the

total amount requested for reimbursement by all health maintenance

organizations from the direct payment out-of-plan stop loss fund exceeds

the amount available for distribution from such fund, then any excess

funds shall be reallocated for distribution to the direct payment

out-of-plan stop loss fund. Otherwise, such excess funds shall be

carried forward and will not affect monies appropriated for the direct

payment stop loss fund in the next calendar year.

(f) Upon the request of the superintendent, each health maintenance

organization shall be required to furnish such data as the

superintendent deems necessary to oversee the operation of the direct

payment stop loss fund. Such data shall be furnished in a form

prescribed by the superintendent.

(g) The superintendent may obtain the services of an organization to

administer the direct payment stop loss fund. The superintendent shall

establish guidelines for the submission of proposals by organizations

for the purposes of administering the fund. The superintendent shall

make a determination whether to approve, disapprove or recommend

modification to the proposal of an applicant to administer the fund. An

organization approved to administer the fund shall submit reports to the

superintendent in such form and at times as may be required by the

superintendent in order to facilitate evaluation and ensure orderly

operation of the fund, including, but not limited to an annual report of

the affairs and operations of the fund, such report to be delivered to

the superintendent and to the chairs of the senate finance committee and

assembly ways and means committee. An organization approved to

administer the fund shall maintain records in a form prescribed by the

superintendent and which shall be available for inspection by or at the

request of the superintendent. The superintendent shall determine the

amount of compensation to be allocated to an approved organization as

payment for fund administration. Compensation shall be payable from the

direct payment stop loss fund. An organization approved to administer

the fund may be removed by the superintendent and must cooperate in the

orderly transition of services to another approved organization or to

the superintendent.

(h) If the superintendent deems it appropriate for the proper

administration of the direct payment stop loss fund, the administrator

of the fund, on behalf of and with the prior approval of the

superintendent, shall be authorized to purchase stop loss insurance

and/or reinsurance from an insurance company licensed to write such type

of insurance in this state. Such stop loss insurance and/or reinsurance

may be purchased to the extent of funds available therefor within such

funds which are available for purposes of the stop loss fund.