Medicaid Managed Care - U.S. Senate Special Committee on Aging

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VII. Financial Responsibility
The need to conserve resources must be
balanced against the obligation to meet the
health care needs of patients and the community.
By adopting appropriate financial
standards and by committing adequate
resources to implement these Principles,
plans can help ensure that balance is
achieved. Specifically, managed care plans
should demonstrate financial responsibility
by:
1. meeting appropriate federal or state
standards related to financial solvency,
capitalization, surplus, reserves, deposits,
bond requirements, and fiscal soundness;
2. complying with applicable prohibitions
against inurement (private benefit),
excessive compensation, conflict of interrest,
self-referral, fraud, and abuse;
3. reinvesting in services and management
activities, including information services
and quality assurance, designed to
improve organizational effectiveness; and
4. budgeting adequate resources to
carry out the Principles described above
relating to access, qvality, community service,
health system improvement, consumer
choice, and governance.
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