3 Colo. Code Regs. § 702-3-1-14-2
Colorado law permits carriers to enter into contracts with risk bearing entities. Section 10-16-705(5)(a), C.R.S. states that in the event of nonpayment by or insolvency of the risk bearing entity the carrier is responsible for the payment of all participating providers that have provided covered health care services to covered persons of the Carrier. In lieu of this automatic requirement to pay, Section 10-16-705(5)(b) provides a Carrier with the option of applying for use of an alternative mechanism to ensure that all participating providers that have provided covered health care services to covered persons of the Carrier pursuant to one or more contracts with such contractors or subcontractors or their intermediaries receive payment due.
The alternative mechanism is approved and operating to exempt the Carrier from the automatic requirement to pay under Section 10-16-705(5)(a) as long as the carrier complies with the provisions of the alternative mechanism for which it is directly responsible and monitors the execution of the provisions of the alternative mechanism for which the Risk Bearing Entity is responsible. If a carrier knew or should have known the Risk Bearing Entity was unable to meet its contractual obligations and did not take reasonable action, then the carrier is deemed not to be in compliance with the alternative mechanism, and therefore is subject to § 10-16-705(5)(a), C.R.S.
The purpose for this regulation is to establish an acceptable alternative mechanism pursuant to § 10-16-705(5)(b), C.R.S. This regulation establishes the terms of an alternative mechanism, which, if complied with, is deemed approved for purposes of § 10-16-705(5)(b), C.R.S. Carriers are not limited to this one alternative mechanism. Other alternative mechanism plans can be submitted for consideration to the commissioner.
3 CCR 702-3-1-14-2