NAC695C.505. Required provisions of health service contracts.

Each health service contract submitted to the Commissioner pursuant to NAC 695C.510 must contain a provision which:

     1. Requires the delivery system intermediary to provide to the organization a written report, at least quarterly, which identifies the total payments made or owed to its providers in sufficient detail to enable the organization and the Commissioner to determine whether the payments have been made in a timely manner and in compliance with the applicable provisions of NRS.

     2. Requires the organization to review the reports of the delivery system intermediary provided pursuant to subsection 1.

     3. Authorizes the organization, upon reasonable prior notice, to audit, inspect and copy the delivery system intermediary’s books, records and any other evidence of its operations which, in the discretion of the organization, are relevant to the delivery system intermediary’s obligations pursuant to the health service contract.

     4. Authorizes the Commissioner, upon reasonable prior notice, to audit, inspect and copy the delivery system intermediary’s books, records and any other evidence of its operations to determine whether the delivery system intermediary has complied with the applicable provisions of NRS or any regulations adopted pursuant thereto.

     5. Requires the delivery system intermediary to maintain working capital in the form of cash or equivalent liquid assets in an amount equal to at least:

     (a) Five hundred thousand dollars; or

     (b) The operating expenses paid for 2 months calculated by using the monthly average of the operating expenses for the prior 6 months,

Ê whichever is less. As used in this subsection, “operating expenses” means the expenses of the delivery system intermediary, except money paid or owed to providers for health services provided pursuant to the health service contract.

     6. Requires the organization to assume financial responsibility for any claims which are:

     (a) Presented for payment to the delivery system intermediary by its providers for covered health care services; and

     (b) Not paid by the delivery system intermediary as provided by law and the contract between the delivery system intermediary and the organization.

     7. Requires that each contract with a subscriber must be entered into directly with the organization and not with the delivery system intermediary.

     8. Sets forth the responsibilities which the delivery system intermediary will assume and requires that the delivery system intermediary comply with requirements of the quality assurance program established by the organization pursuant to NAC 695C.400.

     9. Requires the organization to review, not less than quarterly, the delivery system intermediary’s compliance with the provisions of the contract.

     10. If the delivery system intermediary provides health care services on behalf of more than one entity, requires the delivery system intermediary to maintain separate records for each entity.

     11. Authorizes the organization to terminate its relationship with any provider of the delivery system intermediary with appropriate notice as specified in the health services contract.

     12. Requires that each contract with a provider must be assigned to the organization if the delivery system intermediary fails to pay for covered or authorized health care services. The provision is binding on the provider until the provider renegotiates a contract with the organization.

     13. Prohibits a health care provider who has a financial interest of more than 10 percent in a delivery system intermediary from participating on a utilization review committee or taking any action to change an authorization made by the utilization review committee or an authorized physician.

     14. Requires the delivery system intermediary to provide the organization, the Commissioner and the State Board of Health with a list of the names of those persons who have a financial interest in the delivery system intermediary and the amount of each person’s financial interest. Any change in the financial interests of the delivery system intermediary must be reported to the organization, the Commissioner and the State Board of Health within 10 working days after the change.

     15. Prohibits a delivery system intermediary from assigning its contract to any other organization without the prior approval of the organization. The approval of the organization is subject to the filing of a material modification of operation pursuant to NRS 695C.140.

     16. If a delivery system intermediary hires a company to manage the affairs of the delivery system intermediary, requires the delivery system intermediary or that company to provide the organization with a surety bond or deposit of cash or securities in the amount of $250,000 for the faithful performance of the obligations of the company.

     (Added to NAC by Comm’r of Insurance by R129-96, eff. 10-29-97)