VA| Administrative Letter 2025-02, issued by the Virginia State Corporation Commission Bureau of Insurance, provides updated guidance for Managed Care Health Insurance Plans (MCHIPs) regarding what constitutes a material change requiring prior approval under § 38.2-5802 D of the Code of Virginia. The letter replaces previous guidance (Administrative Letter 1998-11) and outlines procedures for identifying, reporting, and gaining approval for operational changes, especially those with financial or healthcare delivery system impacts.
Key highlights:
- Definition of Material Change: A material change is any operational change—such as in service area, network structure, or provider compensation—that affects the healthcare delivery system or alters revenues, expenses, or net worth by more than 5% over the current or next two calendar years.
- Filing Requirements: Health carriers must request prior approval for material changes and submit detailed financial projections and impact analyses to the Bureau of Insurance (BOI) and provide copies to the Virginia Department of Health (VDH).
- Checklist and Documentation: Filings must include a Part A cover letter outlining the proposed changes and a Part B impact statement with balance sheets, income statements, and assumptions for three years, along with related provider contracts.
- Non-Compliance Penalties: Failure to properly file notice for material changes may result in a regulatory violation and be subject to penalties.