§ 301.63. Rate approvals.
(a) Rates charged members or groups of members shall be filed with the Commissioner and be deemed approved unless explicitly rejected within 60 days of receipt of the filing by the Department. Disapproval of a rate filing by the Commissioner may be appealed under 2 Pa.C.S. (relating to administrative law and procedure).
(b) Rate filings shall describe the benefit package, identify the class of membership—for example, group, group conversion, nongroup and the like—and indicate the form number of the contract form to which the proposed premium rates will apply.
(c) Rate filings shall indicate the period during which the proposed premium rates will be effective for issues and renewals and the period for which the rates will be contractually guaranteed.
(d) Rate filings shall indicate the effective date of the last rate revision.
(e) Rate filings shall state the percentage by which the proposed rates exceed the current rates.
(f) Rate filings shall describe the procedure and identify the assumptions used to convert the total cost per member per month to the proposed premium rates. This includes the current and proposed assumptions for premium structure—ratio of family premium to single and the like—for distribution of contracts, and for number of members per contract.
(g) Rate filings shall describe the procedure and identify the inflationary trend factors used to project the proposed premiums from the initial rating period to each succeeding rating period.
(h) Rate filings shall list, for every claim component utilized by the HMO constructing the proposed premium rates, the assumed utilization, the average unit cost and the cost per member per month. Assumptions for expenses, profits, incentive margins, specialist and primary care capitations and similar items shall also be defined and listed. The rate filing shall compare in tabular fashion these assumptions with the corresponding assumptions used in calculating the current premium rates and with the actual experience data. The experience period shall be identified. Assumptions and trend factors for the proposed premium rates shall be identified and justified by using the current assumptions and the experience data. The hospital unit component shall be subdivided by hospital.
(i) For contractual capitation arrangements, rate filings shall indicate the effective and termination dates of the current contracts, the current capitation amounts and the proposed capitation amounts for contracts due to be renewed during the rating period. Filings shall identify the premium rate components which in total equal the average capitation amounts paid to providers.
(j) Rate filings shall show the number of contract months and member months exposed during the experience period.
(k) Rate filings shall show the total number of members for the four most recent calendar quarters available and the projected number of members by quarter during the rating period.
(l) Proposed premium rates shall be shown in a table which is separate from the other information in the rate filing.
Authority The provisions of this § 301.63 amended under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. § § 66, 186, 411 and 412); and the Health Maintenance Organization Act (40 P. S. § § 1551—1567).
Source The provisions of this § 301.63 adopted February 20, 1987, effective February 21, 1987, 17 Pa.B. 807; amended September 8, 1989, effective September 9, 1989, 19 Pa.B. 3820. Immediately preceding text appears at serial pages (115172) and (126484).
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