(a) On receipt of a financial statement indicating that a delegated entity or delegated third party has an amount of total liabilities greater than its total assets, the HMO must immediately forward a copy of the financial statement to the department.
(b) An HMO that becomes aware of any information, including the information described in subsection (a) of this section, that suggests or indicates that the delegated entity or delegated third party is not operating in compliance with its written agreement or is operating in a condition that may render the continuance of its business hazardous to the enrollees, must immediately:
  (1) notify the delegated entity in writing of those findings; and
  (2) request, in writing, a written explanation with supporting documentation of:
    (A) the delegated entity's or delegated third party's apparent noncompliance with the written agreement; or
    (B) the existence of the condition that apparently renders the continuance of the delegated entity's or delegated third party's business hazardous to the enrollees.
(c) A delegated entity must respond in writing to a request from an HMO under subsection (b) of this section not later than the 30th day after the date the request is received. The response must include a corrective action plan.
(d) A copy of all written communications required by subsections (b) and (c) of this section must be sent to the department simultaneously with transmission to the HMO or delegated entity or delegated third party.
(e) The HMO must cooperate with the delegated entity to correct any failure by the delegated entity to comply with the applicable statutes and rules relating to any matters:
  (1) delegated to the delegated entity by the HMO; or
  (2) necessary for the HMO to ensure compliance with statutory or regulatory requirements.

Source Note: The provisions of this §11.2606 adopted to be effective August 1, 2017, 42 TexReg 2169