Applicability and purpose.

(a) This subchapter applies to HMOs which enter into contracts with risk-bearing IDSs.

(b) This subchapter provides guidance to HMOs desiring to enter into contracts with risk-bearing IDSs for the performance of a defined set of health care services. This subchapter suggests safeguards to be adhered to by HMOs to protect HMO members against the threat posed by financially troubled or insolvent IDSs.

(c) This subchapter is not applicable to HMOs that enter into agreements with persons or entities other than IDSs for the performance of claims processing, administrative services, marketing, enrollment and other related functions.