(a) An organization shall demonstrate fiscal soundness as follows: Demonstrate an approach to the risk of insolvency which allows for the continuation of health care services for the duration of the contract period, the continuation of health care services to employees who are under treatment or confined on the date of insolvency in an in-patient facility until their discharge, and payments to unaffiliated providers for health care services rendered.
(b) In passing upon an organization's showing pursuant to this section, the Administrative Director will consider all relevant factors, including but not limited to:
(1) The method of compensating providers and the terms of provider contracts, especially as to the obligations of providers to employees in the event of the organization's insolvency.
(2) The methods by which the organization controls and monitors the utilization of health care services.
Authority cited: Stats. 1997, Ch. 346, Section 5. Reference: Sections 4600.3, 4500.5 and 4600.6, Labor Code.
1. New section filed 4-15-98; operative 4-15-98. Submitted to OAL for printing only pursuant to Stats. 1997, Ch. 346, Section 5 (Register 98, No. 16).