LDG » Topics » If RxAmerica does not become fully licensed as a risk bearing entity, our ability to offer prescription drug plans will be adversely affected.

This excerpt taken from the LDG 10-K filed Mar 19, 2008.

If RxAmerica does not become fully licensed as a risk bearing entity, our ability to offer prescription drug plans will be adversely affected.

 

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires prescription drug plan sponsors to ultimately be licensed under state law as a risk-bearing entity, such as an insurer or health maintenance organization, eligible to offer health insurance or health benefits coverage in each state in which the applicant offers a prescription drug plan. We recently acquired a “shell” insurance company in connection with our plans to satisfy the licensure requirements. For the 2009 plan year and forward, in accordance with the federal

 

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statutory mandate, the insurance company will provide the Medicare prescription drug plans. Our ability to offer prescription drug plans in the future may be adversely affected if the insurance company is not fully operational and successful in its bids to CMS for 2009. Furthermore, while many state insurance laws are well-established, CMS continues to provide new guidance in an attempt to assist sponsors and state regulators in determining the appropriate applicability of state insurance laws in the context of the prescription drug plans. Uncertainty as to the applicability of state and federal laws could have an impact on RxAmerica’s ability to successfully offer products and services under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

 

This excerpt taken from the LDG 10-K filed Mar 16, 2007.

If RxAmerica does not become fully licensed as a risk bearing entity, our ability to offer prescription drug plans will be adversely affected.

 

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires prescription drug plan sponsors to be licensed under state law as a risk-bearing entity, such as an insurer or health maintenance organization, eligible to offer health insurance or health benefits coverage in each state in which the applicant offers a prescription drug plan. RxAmerica has submitted applications to become a risk bearing entity in all 50 states and submitted applications for single state waivers to CMS on the basis of having submitted substantially complete licensing applications in all states. These waivers, however, are for a limited duration and generally expire within 36 months following submission. We have been evaluating alternatives for full licensure of RxAmerica, including potentially acquiring a “shell” insurance company. Our ability to offer prescription drug plans in the future may be adversely affected if RxAmerica is not fully licensed as a risk-bearing entity in a timely manner, including prior to submitting bids to CMS for 2008. Furthermore, while many state insurance laws are well-established, CMS continues to provide new guidance in an attempt to assist sponsors and state regulators in determining the appropriate applicability of state insurance laws in the context of the prescription drug plans. Uncertainty as to the applicability of state and federal laws could have an impact on RxAmerica’s ability to successfully offer products and services under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

 

EXCERPTS ON THIS PAGE:

10-K
Mar 19, 2008
10-K
Mar 16, 2007
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