SECTION 13.413. Contents of the Application

(a) Order of contents. The application must include the items in the order listed in this section.

(b) Original and copies. An applicant filing a nonelectronic application must submit two additional copies of the application along with the original application.

(c) General contents. An application must include:

(1) a declaration executed under oath or affirmation by an officer or other authorized representative of the HCC certifying that the collection of any confidential information for purposes of satisfying filing requirements of this subchapter was made in accord with the confidentiality requirements of §13.426 of this title (relating to Confidentiality);

(2) a completed application for certificate of authority;

(3) the basic organizational documents and any amendments to them, complete with the original incorporation certificate with charter number and seal indicating certification by the secretary of state, if applicable;

(4) the bylaws, rules, or any similar documents regulating the conduct of the internal affairs of the applicant, certified by an officer or other authorized representative of the applicant HCC;

(5) a plan of operation for the HCC, including an overview, history, types of health care service offered, and operations provisions that include pro-competitive strategies of the HCC;

(6) information about officers, directors, and staff:

(A) a completed officers and directors page; and

(B) biographical data forms for all individuals who are to be responsible for the day-to-day conduct of the affairs of the applicant;

(7) separate organizational charts or lists, as described in subparagraphs (A) - (C) of this paragraph:

(A) charts clearly identifying the contractual relationships involved in the applicant's health care delivery system and between the applicant and any affiliates, and a list of contracts to provide services between the applicant and the affiliates;

(B) a chart showing the internal organizational structure of the applicant's management and administrative staff; and

(C) for the purposes of this paragraph, the information provided must clearly identify any relationship between the HCC and any affiliate or other organization if a common individual or entity directly or indirectly controls 10 percent or more of both the HCC and the affiliate or other organization;

(8) notice of the physical address in Texas of all books and records described in §13.415 of this title (relating to Documents to be Available for Quality of Care and Financial Examinations); and

(9) a description of the information systems, management structure, and personnel that demonstrates the applicant's capacity to meet the needs of patients and participants and to meet the requirements of regulatory and contracting entities.

(d) Financial information. An application must include financial and financially-related information consisting of the following:

(1) projected financial statements, including a balance sheet, income statement, and cash flow statement. Additionally:

(A) the projected data must be provided for two consecutive annual reporting periods;

(B) the financial statements must include the identity and credentials of the individual making the projections; and

(C) the projected data must reflect compliance with §13.431 of this title (relating to Reserves and Working Capital Requirements);

(2) a balance sheet reflecting actual assets and liabilities, and net assets sufficient to comply with §13.431 of this title;

(3) the form, including any proposed payment methodology, of any contract between the applicant and any payor that addresses the applicant arranging for medical and health care services for the payor in exchange for payments in cash or in kind as provided in Insurance Code Chapter 848;

(4) if applicable, insurance or other protection, or both, against insolvency and:

(A) any reinsurance agreement and any other agreement described in Insurance Code §848.102 covering the cost of a potential significant event or catastrophe; and

(B) any other arrangements offering protection against insolvency;

(5) proof of the applicant's maintenance of a fidelity bond or similar officer and employee antifraud protection as provided in §13.473(d) of this title (relating to Organization of an HCC); and

(6) authorization for disclosure to the commissioner of the financial records of the applicant and affiliates to confirm assets.

(e) Provider and service area information. An application must include:

(1) a description and a map of the service area, with key and scale, that identifies the county or counties, or portions of the county or counties, to be served. If the original map is in color, all copies also must be in color;

(2) network configuration information, including maps demonstrating the location and distribution of the participants by physician type and provider type within the proposed service area by county, counties, or ZIP code(s); lists of participants in Excel-compatible format, including business address, county, license type and specialization, hospital admission privileges, and an indication of whether they are accepting new patients;

(3) the identity of any integrated practice group or independent practice association to which any participant belongs, including the group's name, business address, type of legal organization, and approximate number of members;

(4) for each participating facility:

(A) the facility's name and business address;

(B) a description of the services provided by the facility; and

(C) a statement as to whether the facility's agreement with the HCC allows the facility to contract or affiliate with other HCCs;

(5) the form of any contract or monitoring plan between the applicant and:

(A) any individual listed on the officers and directors page;

(B) any delegated entity, delegated network, or delegated third party as described in Insurance Code Chapter 1272; or any other physician or health care provider, plus the form of any subcontract between those individuals or entities and any physician or health care provider to provide health care services. All contracts must include a hold-harmless provision that complies with Insurance Code §843.361 and §1301.060, as applicable, for the protection of patients covered by health benefit plans;

(C) any exclusive agent or agency; or

(D) any individual or entity who will perform management, marketing, administrative, data processing, or claims processing services; and

(6) a written description of the types of compensation arrangements, such as compensation based on fee-for-service arrangements, risk-sharing arrangements, prepaid funding arrangements, or capitated risk arrangements, made or to be made with physicians and health care providers in exchange for the provision of, or the arrangement to provide, health care services to patients, including any financial incentives for physicians and health care providers.

(f) Quality assurance and quality improvement information. An application must include a detailed description of the policies and processes contained in the quality assurance and quality improvement program required by §13.482 of this title (relating to Quality Assurance and Quality Improvement).

(g) Accreditation disclosure. If an HCC has attained accreditation from a nationally recognized accrediting body such as the National Committee for Quality Assurance, URAC, or the Accreditation Association for Ambulatory Health Care, the HCC must disclose:

(1) the name of the accrediting body;

(2) the date accreditation was granted;

(3) the accreditation level;

(4) current accreditation status; and

(5) a copy of the accreditation report.

(h) Antitrust analysis information required of all applicants. An application must include:

(1) for each participant in the HCC, disclosure of any known past or pending investigation, or administrative or judicial proceeding, in which it is alleged that the participant has engaged in any form of price-fixing or other antitrust violation, or health care fraud or abuse, including any governmental or private investigations, lawsuits, and any judgments, fines, or penalties relating to those allegations;

(2) identification of each common service provided by participants, grouped by:

(A) specific Medicare specialty code for each specialty of any participating physician or health care provider;

(B) specific major diagnostic category for inpatient services at a hospital; and

(C) specific outpatient category as established by the Centers for Medicare and Medicaid Services for outpatient services at a facility;

(3) identification of the PSA for each common service for each participant;

(4) the HCC's calculated market share for each common service in each PSA in which two or more participants serve patients for that service, utilizing the identification procedures and calculation steps set forth in §13.414 of this title (relating to Limited Exemption from Certain Information Filing Requirements); and

(A) identifying the market participants and providing the data used in determining the market share; and

(B) highlighting each common service area in each PSA in which the market share exceeds 35 percent;

(5) identification of all physicians, physician group practices, or other entities the HCC applicant considers to be or have been competitors of the HCC or its participants in its proposed service area;

(6) for each pro-competitive benefit that the applicant anticipates will result from the establishment of the HCC:

(A) a description of the pro-competitive benefit;

(B) an explanation as to why the establishment of the HCC will help achieve the pro-competitive benefit or will help extend the pro-competitive benefit to new patient populations or service areas; and

(C) a description of how the HCC will assess whether the pro-competitive benefit has been achieved, including:

(i) the reference point to be used in determining the status prior to implementation of the pro-competitive benefit;

(ii) the standard to be used by the HCC in tracking progress toward achieving the pro-competitive benefit; and

(iii) the period of time to be used in assessing whether the pro-competitive benefit has been achieved. If the period is longer than one year, the applicant must set forth interim benchmarks that will allow the commissioner to assess whether the HCC is making progress toward achieving the pro-competitive benefit; and

(D) for any pro-competitive benefit that the HCC expects to achieve as the result of financial integration, a description of the alternative payment methods the HCC anticipates using to create the financial, pro-competitive benefit;

(7) a description of the policies and procedures the HCC will establish and administer to ensure that none of its financial incentives will result in any limitation on medically necessary services; and

(8) a description of the confidentiality policies and procedures established and enforced by the HCC applicant as required by §13.426 of this title to protect the confidential information of a participant in the HCC from disclosure to other participants in the HCC. The description must include the types and specifications of safeguards and address confidential information collected in the process of preparing or submitting the HCC application.

(i) Market and market power information. HCC applicants ineligible for the limited information filing exemption. An HCC application for an applicant that does not qualify for the limited information filing exemption set forth in §13.414 of this title must also include additional information. For each PSA that does not fall within the limited filing exemption, for each participant in the PSA, the application must include:

(1) for each participant, the name of each private payor that individually accounts for five percent or more of the participant's business in the past year, measured by:

(A) revenue;

(B) billed charges, if revenue data is unavailable; or

(C) patient visits, if billed charges data is unavailable;

(2) for each participant referenced in paragraph (1) of this subsection, a completed Health Care Collaborative Payor Information Form;

(3) all business planning documents created within the previous 24 months relating to the HCC applicant's or its participants' plans relating to any health care service in each service area, including:

(A) market studies and forecasts;

(B) studies of patient origin and flow;

(C) market share studies;

(D) budgets;

(E) investment banker and other consultant reports;

(F) expansion or retrenchment plans;

(G) research and development documents; and

(H) presentations to management committees, executive committees, and boards of directors;

(4) the name of each individual responsible for negotiating contracts on behalf of participants with payors over the last five years, the name of the participant on whose behalf the individual negotiated, the period of time during which the individual was responsible for those negotiations, and, if known, the individual's current address and phone number;

(5) documents reflecting the applicant's price lists, pricing plans, pricing policies, pricing forecasts, pricing strategies, pricing analyses, and pricing decisions relating to any medical or health care service in the service area;

(6) for each individual or entity that has provided or stopped providing any competing health care service in the service area within the previous 24 months, the following items:

(A) name and address of the individual or entity;

(B) beginning date, or beginning and ending date, of the individual's or entity's provision of the health care service in the service area; and

(C) whether the individual or entity built a new facility, converted assets previously used for another purpose, or began using facilities that already were being used for the same purpose;

(7) if the applicant believes that approval of the application is necessary for the future financial viability of one or more of the participants, for that participant, documents referencing its future viability, gross or net margins, ability to obtain financing for capital improvements, or other documents the applicant deems necessary for the evaluation of that participant's financial condition;

(8) all memoranda created within the previous 24 months relating to cost savings, economies, or other efficiencies that have been or could be achieved by any participant through a joint venture, internal cost-cutting, or any associated transaction, regardless of whether the applicant establishes and operates the proposed HCC;

(9) identification of every physician or health care provider in its proposed PSA that the applicant has communicated with concerning the possibility of contracting with the HCC within the previous 12 months; and

(10) for each participant, for the previous 12 months, all agendas, minutes, summaries, handouts, and presentations made to the participant's: board of directors; executive committee; strategic or business planning committees; physician or health care provider recruitment committee; and any committee responsible for approving contracts with facilities, clinics, or private payors.

Source Note: The provisions of this §13.413 adopted to be effective March 31, 2013, 38 TexReg 2100