§ 131E-276. Definitions. - North Carolina Statutes

§ 131E‑276. Definitions.

As used in this Article, unless the context clearly implies otherwise,the following definitions apply:

(1)        "Affiliated provider" means a health care providerthat is affiliated with another provider if, through contract, ownership, orotherwise: (i) one provider directly controls, is controlled by, or is undercommon control with the other provider; (ii) each provider participates in alawful combination under which they share substantial financial risk for theorganization's operation; (iii) both providers are part of a controlled groupof corporations as defined under section 1563 of the Internal Revenue Code of1986; or (iv) both providers are part of an affiliated service group undersection 414 of this Code. Control is presumed if one party directly orindirectly owns, controls, or holds the power to vote, or proxies for, at leastfifty‑one percent (51%) of the voting or governance rights of another.

(2)        "Beneficiary" or "beneficiaries" means abeneficiary or beneficiaries of the Medicare+Choice program who are enrolledwith the provider sponsored organization (PSO) under the terms of a contractbetween the PSO and the Medicare program.

(3)        "Current assets" means cash, marketablesecurities, accounts receivable, and other current items that will be convertedinto cash within 12 months.

(4)        "Current liabilities" means accounts payable andother accrued liabilities, including payroll, claims, and taxes that will needto be paid within 12 months.

(5)        "Current ratio" means the ratio of current assetsdivided by current liabilities calculated at the end of any accounting period.

(6)        "Division" means the Division of MedicalAssistance of the Department of Health and Human Services.

(7)        "Emergency services" has the same meaning asdefined in G.S. 58‑50‑61(a)(5).

(8)        "Health care delivery assets" means any tangibleasset that is part of a PSO operation, including hospitals, medical facilities,and their ancillary equipment, and any property that may reasonably be requiredfor the PSO's principal office or for any purposes that may be necessary in thetransaction of the business of the PSO.

(9)        "Health plan contract" or "Medicarecontract" means a PSO's direct contract with the United States Departmentof Health and Human Services under section 1857 of the federal Social SecurityAct.

(10)      "Out‑of‑network services" means healthcare items or services that are covered services under a PSO's Medicarecontract and that are provided to beneficiaries by health care providers thatare not participating providers in the PSO's network of health care providers.

(11)      "Parent of a sponsoring provider" means the publicor private entity that owns or controls a controlling interest in thesponsoring provider or that has the power to appoint a controlling number ofthe governing board of a sponsoring provider or that has the power to directthe management policy and decisions of the sponsoring provider.

(12)      "Provider" or "health care provider"means: (i) any individual that is engaged in the delivery of health careservices and that is required by North Carolina law or regulation to belicensed to engage in the delivery of these health care services and is solicensed; (ii) any entity that is engaged in the delivery of health careservices and that is required by North Carolina law or regulation to belicensed to engage in the delivery of these health care services and is solicensed; or (iii) any entity that is owned or controlled entirely byindividuals or entities described in subparts (i) or (ii) of this definition.

(13)      "Provider sponsored organization" or"PSO" means a public or private entity domiciled in this State,including a business corporation, a nonprofit corporation, a partnership, alimited liability company, a professional limited liability company, aprofessional corporation, a sole proprietorship, a public hospital, a hospitalauthority, a hospital district, or a body politic: (i) that is established,organized, and operated by sponsoring providers; (ii) in which physicianslicensed pursuant to Article 1 of Chapter 90 of the General Statutes or to thelaws of any state of the United States comprise no less than fifty percent(50%) of the governing board or body, unless otherwise prohibited by law; and(iii) that provides a substantial proportion of the services under eachMedicare contract directly through the sponsoring provider. The requirement insubpart (ii) of this definition shall not preclude a PSO that includes a tax‑exempthospital from adopting a bylaw provision that provides a veto for the tax‑exempthospital over actions of the PSO necessary to maintain the hospital's tax‑exemptstatus. A PSO shall not be out of compliance with the requirement in subpart(ii) due to temporary vacancies on its governing board or body. Subpart (ii) ofthis subdivision applies only if a hospital licensed under this Chapter orChapter 122C of the General Statutes is the sponsoring provider or a member ofthe group of affiliated health care providers that comprises the sponsoringprovider.

(14)      "Sponsoring providers" of a PSO means the healthcare provider domiciled in this State that assumes, or group of affiliatedhealth care providers that directly or indirectly shares, substantial financialrisk in the PSO and that has at least a majority financial interest in the PSO.

(15)      "Substantial proportion of the services" means atleast seventy percent (70%), or sixty percent (60%) for PSOs whosebeneficiaries reside primarily in rural areas, of the annual health careexpenditures. (1998‑227, s.1.)