Consumer Operated and Oriented Plan [CO-OP] Program

To provide assistance to applicants for activities related to establishing a consumer operated and oriented, nonprofit health insurance issuer.


Please refer to the Funding Opportunity Announcement (FOA) for additional information.



Agency - Department of Health and Human Services

The Department of Health and Human Services is the Federal government's principal agency for protecting the health of all Americans and providing essential human services, especially to those who are least able to help themselves.

Office - See Regional Agency Offices.

Health and Human Services, Hubert H.

Humphrey Building, Room 737F, 200 Independence Ave., SW, Washington, D.C.

20201.


Program Accomplishments

Not Applicable.

Uses and Use Restrictions

Start-up Loans: Start-up Loans are intended to assist applicants with the start-up costs associated with establishing a new health insurance issuer, such as: renting or developing administrative technology systems; renting or developing provider networks; hiring counsel and consultants to assist with State licensure requirements; hiring actuaries and management staff; conducting community and prospective member education; developing strategic plans to build enrollment; developing plans for quality improvement, member and provider services, and grievances and appeals systems with feedback loops to improve operations; establishing and participating in a private purchasing council; and other start-up costs.

Start-up Loans cannot be used to fund costs associated with construction of facilities, including clinical facilities, nor can Start-up Loans be used for clinical expenses, such as provider salaries or payments, provider clinical space or administrative staff associated with clinical functions, and clinical equipment.

These items are intended to be covered by the premiums and reflected in the reimbursement to providers.

Solvency Loans: Solvency Loans are intended to assist eligible entities with meeting the solvency and reserve requirements of States in which the applicant seeks to be licensed to issue CO-OP qualified health plans.

Loan recipients must use the loans awarded under the CO-OP program to fund the activities proposed and approved in the loan recipient s application consistent with the terms of the organization s loan agreement with CMS.

Loan recipients are prohibited from using the loans awarded under the CO-OP program to conduct marketing or carry on propaganda and other activities attempting to influence legislation.

Start-up Loans: Start-up Loans are required to be repaid five years after each drawdown of funds.

Solvency Loans: Solvency Loans are required to be repaid 15 years after each drawdown of funds.

Please refer to the FOA for this program for more detail on each type of loan and the requirements for each type of loan s use and repayment.

Eligibility Requirements

Applicant Eligibility

Please refer to the FOA for more information.

Beneficiary Eligibility

*Please refer to the FOA for more information.

Credentials/Documentation

Applicants must provide proof that they have formed a nonprofit member organization and are not prohibited from program participation. This program is excluded from coverage under OMB Circular No. A-87.

Aplication and Award Process

Preapplication Coordination

Preapplication coordination is not applicable.

Environmental impact information is not required for this program.

This program is excluded from coverage under E.O.

12372.

Application Procedures

This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedures

All qualified applications will be forwarded to objective external reviewers. The CMS program official with delegated authority is responsible for final selection and funding decisions. In making these decisions, the program official will take into consideration: recommendations of the external reviewers; reviews for programmatic and grants management compliance; the reasonableness of the size of the loan request and anticipated results of funding the application; ability to repay the loan; and the likelihood that the proposed project will result in the benefits expected. CMS reserves the right to conduct pre-award Budget Negotiations with potential loan recipients. Notification is made in writing by a Notice of Award.

Deadlines

Oct 17, 2011: First Round. First Round Loans
• Grants.gov application due date: October 17, 2011;
• First loan award date: February 17, 2012. Subsequent Loans will be awarded in 2012 and 2013. After the first round application due date (October 17, 2011), applications will be accepted on a quarterly basis until December 31, 2012.

Authorization

Affordable Care Act Section 1322.

Range of Approval/Disapproval Time

From 60 to 90 days. Loan awards or a response to the application will be provided approximately 75 days after each applicant receives notice that its application is complete.

Appeals

An applicant may request reconsideration of a loan application determination. Any determination made by CMS with respect to that loan application as a result of reconsideration is final and is not subject to reconsideration, appeals, or other administrative or judicial review related to that specific loan application. However, an applicant is not prohibited from submitting an entirely new loan application.

Renewals

Not Applicable.

Assistance Considerations

Formula and Matching Requirements

This program has no statutory formula.
This program has no matching requirements.
This program does not have MOE requirements.

Length and Time Phasing of Assistance

Start-up Loans must be repaid within 5 years of the date of each drawdown and Solvency Loans must be repaid within 15 years of the date of each drawdown. See the following for information on how assistance is awarded/released: The FOA will outline how assistance is awarded/released.

Post Assistance Requirements

Reports

Start-up and Solvency Loan Recipients.

All successful applicants under this announcement must comply with the following reporting and review activities: a.

Semi-Annual Progress Report.

Loan recipients must provide the Project Officer information such as, but not limited to: Progress on the goals, objectives, milestones, and activities identified in its Business Plan and the Loan Agreement; Accomplishments, barriers, and lessons learned; Data on the loan recipient s responsiveness to member grievance, maintenance of consumer control, and quality of care; Any changes in the Business Plan; and Updated financial reports and pro forma reports.

More details of the semi-annual progress report will be outlined in the Loan Agreement and loan recipients will be provided with a reporting template.

b.

Annual Program Report; In addition to the semi-annual progress report, each loan recipient will be required to submit a program report annually, such as, but not limited to: Updated financial reports and pro forma reports; Certification of compliance with all applicable state insurance regulation or an explanation of any deficiencies or adverse actions or determinations by state insurance regulators and a timeline for resolving all issues with state insurance regulators; An updated Business Plan.

More details of the annual report will be outlined in the Loan Agreement and loan recipients will be provided with a reporting template.

c.

Corrective Action Plan (CAP) If CMS concludes that a loan recipient has not complied with the requirements set forth in Section 1322 of the Affordable Care Act, 45 CFR part 156 subpart F, or in its Loan Agreement, CMS may require the loan recipient, via a notice of violation, to submit a CAP and implement the CAP as approved by CMS.

1.

The loan recipient must submit, for CMS approval, a CAP by the deadline indicated on the notice of violation.

2.

The CAP must specify the actions that the loan recipient will take to ensure that the loan recipient, its members, its providers and suppliers, and contracted entities performing services or functions on its behalf, will correct any deficiencies and remain in compliance with program requirements.

3.

CMS will monitor the loan recipient s performance during the CAP process.

4.

Failure to submit, obtain approval for, or implement a CAP may result in termination of the loan agreement, as may failure to demonstrate improved performance upon completion of the CAP.

d.

Enhanced Oversight Plan CMS may place a loan recipient in an enhanced oversight plan if the loan recipient consistently underperforms or repeatedly has difficulty in meeting program milestones and benchmarks, as identified in its loan agreement.

Under an enhanced oversight plan, CMS will conduct stronger and more frequent review of the loan recipient s operations and financial status.

CMS may require the loan recipient to develop and implement a corrective action plan (CAP).

In addition, CMS may provide technical assistance if CMS determines that doing so would improve the performance of the loan recipient and increase the likelihood of loan repayment.

e.

Transparency Act Reporting Requirements New awards issued under this funding opportunity announcement are subject to the reporting requirements of the Federal Funding Accountability and Transparency Act (FFATA) of 2006 (P.

L.

109-282), as amended by section 6202 of Public Law 110-252 and implemented by 2 CFR Part 170.

Recipients must report information for each first-tier sub award of $25,000 or more in Federal funds and executive total compensation for the recipient s and sub recipient s five most highly compensated executives as outlined in Appendix A to 2 CFR Part 170 (available online at www.fsrs.gov).

Each loan recipient must submit a quarterly electronic SF 425 via the Payment Management System.

The report identifies cash transactions and expenditures against the authorized funds for the loan.

Please refer to the description provided in Reports (111) a.

of this template for information on the semi-annual progress report.

Each loan recipient must submit a quarterly electronic SF 425 via the Payment Management System.

The report identifies cash transactions and expenditures against the authorized funds for the loan.

Please refer to the FOA.

Audits

In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133. Each loan recipient must submit an audited annual financial report.

Records

A loan recipient must comply with the requirements contained in the Funding Opportunity Announcement and its loan agreement. Specifically: (a) Right to audit. The loan recipient must agree, and must require its providers, suppliers, and contracted entities performing services or functions on behalf of the loan recipient to agree, that HHS, the Comptroller General, the OIG or their designees have the right to audit, inspect, and evaluate any books, contracts, records, documents, and other evidence of the loan recipient, and its providers and suppliers, and contracted entities that pertain to-(1) The loan recipient s compliance with program requirements; and (2) The ability of the loan recipient to repay loan funds to CMS. (b) Maintenance of records. A loan recipient must agree and must require its providers, suppliers, and contracted entities performing functions or services on behalf of the loan recipient to agree to the following: (1) To maintain and give HHS, the Comptroller General, OIG, or their designees access to all books, contracts, records, documents, and other evidence sufficient to enable the audit, evaluation, and inspection of the loan recipient s compliance with program requirements; (2) To maintain such books, contracts, records, documents, and other evidence for a period of 10 years from the final date of the repayment period or from the date of completion of any audit, evaluation, or inspections, whichever is later, unless - (i) CMS determines there is a special need to retain a particular record or group of records for a longer period and notifies the loan recipient at least 30 days before the normal disposition date; (ii) There has been a termination, dispute, or allegation of fraud or similar fault by the loan recipient, its providers, suppliers, or contracted entities that perform functions or services on its behalf, in which case the loan recipient must retain records for an additional 6 years from the date of any resulting final resolution of the termination, dispute, or allegation of fraud or similar fault; (iii) There is a reasonable possibility of fraud or similar fault by the loan recipient or its providers and suppliers, or contracted entities performing services or functions on behalf of the loan recipient, in which case CMS may inspect, evaluate, and audit the loan recipient at any time while the loan funds are in repayment; and (3) Notwithstanding any arrangements between or among a loan recipient and its members, providers and suppliers, and contracted entities performing functions or services on its behalf, the loan recipient must have ultimate responsibility for adhering to and otherwise fully complying with all terms and conditions of its loan agreement with CMS, including the requirements set forth in this section.

Financial Information

Account Identification

75-0118-0-1-551.

Obigations

(Direct Loans) FY 12 $1,691,348,280; FY 13 est $302,000,000; and FY 14 Estimate Not Available

Range and Average of Financial Assistance

No Data Available.

Regulations, Guidelines, and Literature

Applicants should refer to the FOA for applicable regulations, guidance, and/or literature.

Information Contacts

Regional or Local Office

See Regional Agency Offices. Health and Human Services, Hubert H. Humphrey Building, Room 737F, 200 Independence Ave., SW, Washington, D.C. 20201.

Headquarters Office

Anne Bollinger and Ilana Cohen 200 Independence Ave., SW, Room 737F, Washington, District of Columbia 20201 Email: anne.bollinger@cms.hhs.gov Phone: 301-492-4395 or 301-492-4371

Criteria for Selecting Proposals

In awarding loans, CMS will evaluate applications (based upon type of loan) using factors identified in the FOA. Please refer to the FOA for additional evaluation criteria.



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