11 N.C. Admin. Code 16.0604

Current through Register Vol. 39, No. 12, December 1, 2024

Section 16 .0604 - INITIAL HMO RATE FILING DATA REQUIREMENTS AND STANDARDS

(a) All initial HMO rate filings shall include, in addition to the data required by 11 NCAC 16 .0603, the following data:

(1) a comparison of the rates to other HMO rates with the same effective date in North Carolina for similar benefit plans; and

(2) a three-year financial projection, provided by the Department's Actuarial Services Division, that details total membership, revenues, and expenses, and that includes a statement of cash flow, a balance sheet, and a statement of working capital and net worth.

(b) All initial HMO rate filings shall use in the rate development a total retention loading of:

(1) no greater than 25.0% of the total premium rate for full-service HMO products issued on a group basis;

(2) no greater than 35.0% of the total premium rate for single-service HMO products issued on a group basis;

(3) no greater than 35.0% of the total premium rate for full-service HMO products issued on an individual basis; or

(4) no greater than 45.0% of the total premium rate for single-service HMO products issued on an individual basis.

(c) If an HMO uses a total retention loading that is less than the maximum limit cited in Paragraph (b) of this Rule minus 15.0%, then the following supporting documentation shall be included in the filing:

(1) a listing of each of the specific components that make up the total retention loading expressed as a percentage of premium;

(2) a brief description of the methodology employed to obtain each of the components that make up the total retention loading;

(3) a brief explanation as to why any of the components which make up the total retention loading have changed and a statement of opinion from an officer of the HMO that these changes are permanent in nature;

(4) a brief, summary description of the impact of any special fee negotiations or contract arrangements that affect the premium rates. Identification of specific hospitals or physician groups shall not be required; and

(5) a comparison of the rates to other HMO rates with similar benefit plans.

(d) All HMO's must project a positive net income after taxes in each of the last 12 months of the three year financial projection.

11 N.C. Admin. Code 16 .0604

Authority G.S. 58-67-10(d)(1); 58-67-50(b); 58-67-150;
Eff. April 1, 1995;
Readopted Eff. October 1, 2018.

Authority G.S. 58-67-10(d)(1); 58-67-50(b); 58-67-150;
Eff. April 1, 1995.

Readopted by North Carolina Register Volume 33, Issue 09, November 1, 2018 effective 10/1/2018.