4123-6-036 MCO participation in the HPP - administrator's authority to cancel, renegotiate or complete MCO contracts.

(A) Pursuant to division (D)(11) of section 4121.44 of the Revised Code, the administrator may cancel or renegotiate any MCO contract with the bureau or complete any contract between the bureau and any MCO if the administrator determines that it is in the best financial interest of the workers' compensation system to do so. The grounds for cancellation, renegotiation or completion include, but are not limited to, the following:

(1) The MCO is insolvent or is likely to become insolvent.
(2) The MCO has misrepresented the amount or cost of services or supplies rendered or provided to an injured worker.
(3) If the administrator determines that there is substantial evidence of such actual or impending insolvency or misrepresentation, the administrator shall notify the MCO of that evidence in writing. Within fourteen days of receipt of such notice from the administrator, the MCO shall provide the administrator with information demonstrating to the administrator that the MCO is neither insolvent nor likely to become insolvent nor has committed such misrepresentation. If such information provided by the MCO fails to establish to the administrator that the MCO is neither insolvent nor is likely to become insolvent nor has committed such misrepresentation, the administrator may cancel, renegotiate or complete the contract with the MCO.
(4) The total cost measures as provided in paragraph (D) of rule 4123-6-13 of the Administrative Code for an MCO are significantly higher than the total cost measures of other MCOs for the same or similar services in the same or similar industries during the same period of time. If the administrator determines that an MCO's total cost per case may be significantly higher than those of other MCOs for the same or similar services in the same or similar industries during the same period of time, the administrator shall notify the MCO of that determination in writing. Within thirty days of receipt of such notice from the administrator, the MCO shall proceed with one of two options:

(a) Option one: the MCO shall provide the administrator with information demonstrating to the administrator that the MCO's total cost per case is not significantly higher than other MCOs, or
(b) Option two: the MCO shall provide the administrator with a written plan, containing but not limited to a time frame, setting forth an approach and methodology satisfactory to the administrator that reduces, within limits acceptable to the administrator, the MCO's total cost per case.

(B) Should the MCO choose option one, if the administrator determines that there is substantial evidence that the MCO's total cost per case is significantly higher than other MCOs, the administrator may renegotiate the bureau's contact with the higher-total cost per case MCO. If the administrator and the higher-total cost per case MCO are unable to agree to a renegotiated contract that the administrator determines is in the best financial interest of the workers' compensation system, and the administrator determines that other MCOs in the higher-total cost per case MCO's service area can provide adequate coverage of injured workers, the administrator may cancel or complete the bureau's contract with the MCO.

(C) Should the MCO choose option two, the administrator shall monitor the MCO's performance pursuant to such plan. If the administrator determines that the MCO has not performed in accordance with such plan, the administrator may proceed in accordance with the provisions contained in paragraph (B) of this rule.

(D) Upon final determination of any of the circumstances described in paragraph (A), (B), or (C) of this rule, the administrator shall notify the MCO of that determination in writing.

Effective date: Feb. 16, 1996