§ 131E-277. Direct or indirect sharing of substantial financial risk. - North Carolina Statutes

§ 131E‑277.  Director indirect sharing of substantial financial risk.

In order for sponsoring providers to directly or indirectly sharesubstantial financial risk in the PSO, the PSO shall do one or more of thefollowing:

(1)        Provide services under its Medicare contract at a capitatedrate;

(2)        Provide designated services or classes of services under itsMedicare contract for a predetermined percentage of premium or revenue from theMedicare program;

(3)        Use significant financial incentives for its sponsoringproviders, as a group to achieve specified cost‑containment andutilization management goals either by:

a.         Withholding from all sponsoring providers a substantialamount of the compensation due to them, with distribution of that amount to thesponsoring providers based on performance of all sponsoring providers inmeeting the cost‑containment goals of the network as a whole; or

b.         Establishing overall cost or utilization targets for thePSO, with the sponsoring providers subject to subsequent substantial financialrewards or penalties based on group performance in meeting the targets; or

(4)        Agree to provide a complex or extended course of treatmentthat requires the substantial coordination of care by sponsoring providers indifferent specialties offering a complementary mix of services, for a fixed,predetermined payment, when the costs of that course of treatment for anyindividual patient can vary greatly due to the individual patient's treatmentor other factors; or

(5)        Agree to any other arrangement that the Division determinesto provide for the sharing of substantial financial risk by the sponsoringproviders. (1998‑227, s.1.)