CA Welf & Inst Code Section 14138.16

(a)

For the duration of the APM pilot project, the department shall establish a risk corridor structure for the principal health plans relating only to the APM supplemental capitation payments pursuant to Section 14138.15, to the extent consistent with principles of actuarial soundness.

(b)

The risk sharing of the costs under this section shall be constructed by the department so that it is symmetrical with respect to risk and profit, and so that all of the following apply:

(1)

The principal health plan is fully responsible for all costs up to one-half of 1 percent in excess of the APM supplemental capitation amounts.

(2)

The principal health plan shall fully retain the revenues paid through the APM supplemental capitation amounts in excess of the costs incurred up to one-half of 1 percent below the APM supplemental capitation amounts.

(3)

The principal health plan and the department shall share equally in the responsibility for costs in excess of the APM supplemental capitation amounts that are greater than one-half of 1 percent but less than 1 percent above the APM supplemental capitation amounts.

(4)

The principal health plan and the department shall share equally the benefit of the revenues paid through the APM supplemental capitation amounts in excess of the costs incurred that are greater than one-half of 1 percent but less than 1 percent below the APM supplemental capitation amounts.

(5)

The department shall be fully responsible for all costs in excess of the APM supplemental capitation amounts that are more than 1 percent above the APM supplemental capitation amounts.

(6)

The department shall fully retain the revenues paid through the APM supplemental capitation amounts in excess of the costs incurred greater than 1 percent below the supplemental capitation amounts.

(c)

The department shall develop specific contract language to implement the requirements of this section that shall be incorporated into the contracts of each affected principal health plan.

(d)

This section shall be implemented only to the extent that any necessary federal approvals or waivers are obtained.