Page:United States Statutes at Large Volume 92 Part 2.djvu/856

 92 STAT. 2136

Consolidated financial statement. "Party in interest."

Information, availability. Evaluation of transactions.

Number of organizations.

Report to G)ngress.

PUBLIC LAW 95-559~NOV. 1, 1978 "(B) any furnishing for consideration of goods, services (including management services, but excluding health services provided to members b;^ staff, medical group (or groups), individual practice association (or associations), or any combination thereof), or facilities between the health maintenance organization and a party in interest; and "(C) any lending of money or other extension of credit between a health maintenance organization and a party in interest. The Secretary may require that information reported respecting a health maintenance organization which controls, is controlled by, or is under common control with, another entity be in the form of a consolidated financial statement for the organization and such entity. "(b) For the purposes of this section the term 'party in interest' means: " (1) any director, officer, partner, or employee of a health maintenance organization, any person who is directly or indirectly the beneficial owner of more than 6 per centum of the equity of the organization, any person who is the beneficial owner of a mortgage, deed of trust, note, or other interest secured by, and valuing more than 5 per centum of the health maintenance organization, and, in the case of a health maintenance organization organized as a nonprofit corporation, an incorporator or member of such corporation under applicable State corporation law; " (2) any entity in which a person described in paragraph (1) — "(A) is an officer or director; "(B) is a partner (if such entity is organized as a partnership); "(C) has directly or indirectly a beneficial interest of more than 5 per centum of the equity; or "(D) has a mortgage, deed of trust, note, on other interest valuing more than 5 per centum of the assets of such entity; " (3) any person directly or indirectly controlling, controlled by, or under common control with a health maintenance organization; and "(4) any member of the immediate family of an individual described in paragraph (1). "(c) Each health maintenance organization shall make the information reported pursuant to subsection (a) available to its enrollees upon reasonable request. "(d) The Secretary shall, as he deems necessary, conduct an evaluation of transactions reported to the Secretary under subsection (a)(3) for the purpose of determining their adverse impact, if any, on the fiscal soundness and reasonableness of charges to the health maintenance organization with respect to which they transpired. The Secretary shall evaluate the reported transactions of not less than five, or if there are more than twenty health maintenance organizations reporting such transactions, not less than one-fourth of the health maintenance organizations reporting any such transactions under subsection (a)(3). "(e) The Secretary shall file an annual report with the Congress on the operation of this section. Such report shall include— "(1) an enumeration of standards and norms utilized to make the evaluations required under subsection (d);

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