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);

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(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.

Source: SL 2013, ch 256, § 37.