Section 58-41-121. Documents provided to risk bearing entity by health maintenance organization

In entering into, amending, or renewing a contract with a risk bearing entity, a health maintenance organization shall, unless already specified in the contract, provide the following, upon request, to a risk bearing entity:

(1)    At the time the contract is entered into, a written statement describing the amount or method of remuneration to be paid to the risk bearing entity. If any part of the remuneration is a calculated amount based on variable factors, the payment methodology upon which the calculated amount will be determined. The statement shall specify the services and expenses for which the risk bearing entity is financially liable in whole or part;

(2)    At the time payment is made, the basis of the calculation of that payment;

(3)    For health benefit plans in which the covered persons are assigned to the risk bearing entity under a capitated payment arrangement, a list of enrollees and payments due to the risk bearing entity, to be provided monthly if not already available to the risk bearing entity;

(4)    At the time the contract is entered into, a copy of the health maintenance organization’s most recent annual statement filed with the NAIC; and

(5)    Once the contract is in effect, the quarterly or annual statement.

See https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=58-41-121

Section 58-41-122. Documents provided to health maintenance organization by risk bearing entity

A health maintenance organization shall include in any contract with a risk bearing entity a requirement that the risk bearing entity provide to the health maintenance organization at the time a contract is entered into and annually thereafter the following:

(1)    Annual audited GAAP report in accordance with generally accepted accounting principles in the United States (U.S. GAAP);

(2)    Documentation that satisfies the health maintenance organization that the risk bearing entity has sufficient ability to accept risk; and

(3)    Documentation that satisfies the health maintenance organization that the risk bearing entity has appropriate management expertise and infrastructure.

The contract shall also require that the risk bearing entity on a quarterly basis provide status reports that include the following:

(1)    Financial statements prepared in accordance with U.S. GAAP;

(2)    An aging report of the percentage of claims that have been paid, pended, or denied, across all contracts with risk bearing entities; and

(3)    On a monthly basis, a report of the estimated reported claims and incurred but not reported claims liability of the risk bearing entity.

See https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=58-41-122

Section 58-41-123. Notice by risk bearing entity of change in conditions–Assignment of contract

A health maintenance organization shall require in any contract with a risk bearing entity that the risk bearing entity provide notice to the health maintenance organization within thirty days of:

(1)    Any changes involving the ownership structure of the risk bearing entity; or

(2)    Financial or operational concerns regarding the financial viability of the risk bearing entity.

A health maintenance organization shall also require in any contract with a risk bearing entity a provision that allows the director, in the event that a risk bearing entity fails to comply with any provision of §§ 58-41-120 to 58-41-126, inclusive, to assign for six months, the risk bearing entity’s contract with providers to furnish covered services.

See https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=58-41-123

See 58-41-124. Notice to director that risk bearing entity has materially failed to perform contract

A health maintenance organization shall have procedures in place to notify the director within a reasonable time that a risk bearing entity has materially failed to perform under its contract with the health maintenance organization. A health maintenance organization is not in violation of this section if it acts in good faith in its attempt to comply with this section. A health maintenance organization shall maintain systems and controls for reviewing the information provided to the health maintenance organization by the risk bearing entity pursuant to §§ 58-41-120 to 58-41-126, inclusive.

See https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=58-41-124