(a) A PSO must have sufficient cash flow to meet its financial obligations as they become due and payable.
(b) To determine whether the PSO meets the requirement in paragraph (a) of this section, CMS will examine the following—
(1) The PSO's timeliness in meeting current obligations;
(2) The extent to which the PSO's current ratio of assets to liabilities is maintained at 1:1 including whether there is a declining trend in the current ratio over time; and
(3) The availability of outside financial resources to the PSO.
(c) If CMS determines that a PSO fails to meet the requirement in paragraph (b)(1) of this section, CMS will require the PSO to initiate corrective action and pay all overdue obligations.
(d) If CMS determines that a PSO fails to meet the requirement of paragraph (b)(2) of this section, CMS may require the PSO to initiate corrective action to—
(1) Change the distribution of its assets;
(2) Reduce its liabilities; or
(3) Make alternative arrangements to secure additional funding to restore the PSO's current ratio to 1:1.
(e) If CMS determines that there has been a change in the availability of outside financial resources as required by paragraph (b)(3) of this section, CMS requires the PSO to obtain funding from alternative financial resources.
[63 FR 25378, May 7, 1998, as amended at 64 FR 71678, Dec. 22, 1999]
Title 42 published on 2012-10-01
no entries appear in the Federal Register after this date.
This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.