Page:United States Statutes at Large Volume 111 Part 1.djvu/341

 PUBLIC LAW 105-33—AUG. 5, 1997 111 STAT. 317 "(C) each provider is a participant in a lawful combination under which each provider shares substantial financial risk in connection with the organization's operations, or "(D) both providers are part of an affiliated service group under section 414 of such Code. "(4) CONTROL.— For purposes of paragraph (3), control is presumed to exist if one party, directly or indirectly, owns, controls, or holds the power to vote, or proxies for, not less than 51 percent of the voting rights or governance rights of another. "(5) HEALTH CARE PROVIDER DEFINED.— In this subsection, the term 'health care provider' means— "(A) any individual who is engaged in the delivery of health care services in a State and who is required by State law or regulation to be licensed or certified by the State to engage in the delivery of such services in the State, and "(B) any entity that is engaged in the delivery of health care services in a State and that, if it is required by State law or regulation to be licensed or certified by the State to engage in the delivery of such services in the State, is so licensed. "(6) REGULATIONS.—The Secretary shall issue regulations to carry out this subsection. "ESTABLISHMENT OF STANDARDS "SEC. 1856. (a) ESTABLISHMENT OF SOLVENCY STANDARDS FOR 42 USC PROVIDER-SPONSORED ORGANIZATIONS. — i395w-26. "(1) ESTABLISHMENT.— "(A) IN GENERAL.— The Secretary shall establish, on an expedited basis and using a negotiated rulemaking process under subchapter III of chapter 5 of title 5, United States Code, standards described in section 1855(c)(1) (relating to the financial solvency and capital adequacy of the organization) that entities must meet to qualify as provider-sponsored organizations under this part. "(B) FACTORS TO CONSIDER FOR SOLVENCY STAND- ARDS. —In establishing solvency standards under subparagraph (A) for provider-sponsored organizations, the Secretary shall consult with interested parties and shall take into account— "(i) the delivery system assets of such an organization and ability of such an organization to provide services directly to enrollees through affiliated providers, "(ii) alternative means of protecting against insolvency, including reinsurance, unrestricted surplus, letters of credit, guarantees, organizational insurance coverage, partnerships with other licensed entities, and valuation attributable to the ability of such an organization to meet its service obligations through direct delivery of care, and "(iii) any standards developed by the National Association of Insurance Commissioners specifically for risk-based health care delivery organizations. " (C) ENROLLEE PROTECTION AGAINST INSOLVENCY. — Such standards shall include provisions to prevent enrollees

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