42 CFR 434.40 - Contract requirements.

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§ 434.40 Contract requirements.

(a) Contracts with health insuring organizations that are not subject to the requirements in section 1903(m)(2)(A) must:

(1) Meet the general requirements for all contracts and subcontracts specified in § 434.6;

(2) Specify that the contractor assumes at least part of the underwriting risk and;

(i) If the contractor assumes the full underwriting risk, specify that payment of the capitation fees to the contractor during the contract period constitutes full payment by the agency for the cost of medical services provided under the contract;

(ii) If the contractor assumes less than the full underwriting risk, specify how the risk is apportioned between the agency and the contractor;

(3) Specify whether the contractor returns to the agency part of any savings remaining after the allowable costs are deducted from the capitations fees, and if savings are returned, the apportionment between agency and the contractor; and

(4) Specify the extent, if any, to which the contractor may obtain reinsurance of a portion of the underwriting risk.

(b) The contract must -

(1) Specify that the capitation fee will not exceed the limits set forth under part 447 of this chapter.

(2) Specify that, except as permitted under paragraph (b) of this section, the capitation fee paid on behalf of each beneficiary may not be renegotiated -

(i) During the contract period if the contract period is 1 year or less; or

(ii) More often than annually if the contract period is for more than 1 year.

(3) Specify that the capitation fee will not include any amount for recoupment of any specific losses suffered by the contractor for risks assumed under the same contract or a prior contract with the agency; and

(4) Specify the actuarial basis for computation of the capitation fee.

(c) The capitation fee may be renegotiated more frequently than annually for beneficiaries who are not enrolled at the time of renegotiation or if the renegotiation is required by changes in Federal or State law.

[ 55 FR 51295, Dec. 13, 1990]

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United States Code

Title 42 published on 19-Apr-2017 03:51

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 42 CFR Part 434 after this date.

  • 2016-01-20; vol. 81 # 12 - Wednesday, January 20, 2016
    1. 81 FR 3004 - Federal Awarding Agency Regulatory Implementation of Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; Technical Amendments
      GPO FDSys XML | Text
      Interim final rule; technical amendments.
      Effective January 20, 2016. Implementation Date: For all non-Federal entities, there is a two-year grace period for implementation of the procurement standards in 45 CFR 75.326 through 75.335.
      42 CFR Parts 38, 50, 51, 51a, 51b, 51c, 51d, 52, 52a, 52b, 52c, 52d, 52e, 55a, 56, 57, 59, 59a, 62, 63a, 64, 65, 65a, 66, 67, 124, 136, 403, 417, 430, 433, 434, 435, 436, 438, 440, 441, 456, 457, and 1001