Sec. 101.3. Definitions

(a) The term capitation or capitation arrangement shall mean contractually based prepayments (any payments made prior to the last day of the month shall be deemed a prepayment of the entire month's capitation) made to a health care provider, on a per member per month or a percentage of premium basis, in exchange for one or more covered health care services to be rendered, referred or otherwise arranged by such provider and by its participating providers; however, the estimated part of the prepayment needed to provide the covered services to be referred or otherwise arranged by the health care provider to nonparticipating providers shall be deposited by the insurer into a separate account to be designated as the “out-of-network health care provider account” which account shall be maintained on the books of the insurer for the sole purpose of paying for the services covered by the capitation arrangement that were rendered by nonparticipating providers. Payments into such account shall be designated as "capitation outside of the health care provider's network" and the payments made for services to be rendered by the health care provider and its participating providers shall be designated as the “health care provider's in-network capitation.”

(b) The term financial responsibility shall mean that, on a prospective basis, the health care provider has demonstrated to the insurer and the superintendent that it can faithfully perform its obligations under a financial risk transfer agreement by demonstrating its compliance with the provisions of this Part.

(c) The term financial risk transfer shall mean the contractual assumption of liability by the health care provider by means of a capitation arrangement for the delivery of specified health care services to subscribers of the insurer.

(d) The term financial solvency or financially solvent shall mean that the most recent health care provider's financial statement or guaranteeing parent corporation's consolidated financial statement evidences an excess of assets over liabilities and the health care provider has demonstrated to the satisfaction of the insurer and the superintendent that the health care provider has adopted and has in place the necessary safeguards to ensure that the health care provider's in-network capitation will first be used for the payment of medical and hospital services to be rendered by the health care provider and its participating providers which derive from a financial risk transfer agreement, including any necessary administrative costs associated with the rendering of such services.

(e) The term guaranteeing parent corporation shall mean an entity that controls a health care provider and guarantees the performance of the provider's obligations under the financial risk transfer agreement including the payment of any amounts owed by the health care provider to participating providers for services rendered pursuant to a risk transfer agreement. The guaranteeing parent corporation must include the financial condition of the controlled health care provider in its consolidated financial statement as required by section 101.9(a)(3) of this Part.

(f) The term health care facility shall mean a hospital as defined in and licensed under article 28 of the Public Health Law or a similar facility licensed under article 19, 31, or 32 of the Mental Hygiene Law.

(g) The term health care provider shall mean a person or entity licensed or certified pursuant to article 28, 36 or 40 of the Public Health Law; a facility licensed pursuant to article 19, 31 or 32 of the Mental Hygiene Law; a health care professional licensed, registered or certified pursuant to title 8 of the Education Law (including a group of such health care professionals); a clinical laboratory certified pursuant to Title V of the Public Health Law; and a dispenser or provider of pharmaceutical products, healthcare services or durable medical equipment. A health care provider shall also include a health care facility and an intermediary entity as defined in this section.

(h) The term insurer shall mean an insurance company licensed to do accident and health insurance in this State, a corporation licensed pursuant to article 43 of the Insurance Law or an entity possessing a certificate of authority under article 44 of the Public Health Law.

(i) The term intermediary entity shall mean a person or entity that enters into a financial risk transfer agreement with one or more insurers, and that contracts with one or more participating providers to perform the services that are set forth in the financial risk transfer agreement. The term shall include an accountable care organization as defined in 10 NYCRR Part 1003. When the insurer is an entity certified pursuant to article 44 of the Public Health Law, the term shall also mean an independent practice association as defined in 10 NYCRR Part 98.

(j) The term participating provider shall mean the person or entity who is contractually obligated to the health care provider to provide the services that are covered by the insurer's financial risk transfer agreement with such health care provider.

(k) The term subscriber shall mean an enrollee, a policyholder or a contract holder.

(l) The term withhold shall mean a percentage of payments or set dollar amounts deducted from a health care provider's contractual payment and that may or may not be returned to the health care provider, depending on specific predetermined factors, including any necessary approvals by the insurer's board of directors.

(m) The definitions contained in section 107 of the Insurance Law and 10 NYCRR 98-1.2 shall also apply to this Part.