Medicaid program; modification of certain requirements for health insuring organizations--HCFA. Final rule.

This final rule implements statutory changes which expressly made certain Health Insuring Organizations (HIOs) subject to Medicaid Health Maintenance Organization (HMO) rules. The statute implemented in this rule requires that an HIO which became operational on or after January 1, 1986, and arranges for comprehensive health services for Medicaid recipients on a risk basis be subject to HMO requirements. The statute also provides that exemptions from certain HMO rules are permitted for HIOs which began operation on or after January 1, 1986, if the HIOs are operating under a section 1915(b) waiver obtained prior to that date, or if an HIO is otherwise identified in the law. The exemptions continue as long as the waiver under section 1915(b) of the Social Security Act remains in effect. The statutory provisions implemented in this rule were enacted in section 9517(c) of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended by section 9435(e) of the Omnibus Budget Reconciliation Act of 1986, and section 1895(c)(4) of the Tax Reform Act of 1986.