---
kind: "section"
citation: "42 C.F.R. § 417.407"
title: "42"
number: "417.407"
heading: "Requirements for a Competitive Medical Plan (CMP)."
url: "https://uscodex.org/cfr/42/417.407"
---

# §417.407. Requirements for a Competitive Medical Plan (CMP).

- (a) **General rule.** To qualify as a CMP, an entity must be organized under the laws of a State and must meet the requirements of [paragraphs (b) through (f)](#b..f) of this section.
- (b) **Required services—**
  - (1) **Basic rule.** Except as provided in [paragraph (b)(2)](#b-2) of this section, the entity furnishes to its enrollees at least the following services:
    - (i) **Physicians' services performed by physicians.**
    - (ii) **Laboratory, x-ray, emergency, and preventive services.**
    - (iii) **Out-of-area coverage.**
    - (iv) **Inpatient hospital services.**
  - (2) **Exception for Medicaid prepayment risk contracts.** An entity that had, before 1970, a Medicaid prepayment risk contract that did not include provision of inpatient hospital services is not required to provide those services.
- (c) **Compensation for services.** The entity receives compensation (except for deductibles, coinsurance, and copayments) for the health care services it provides to enrollees on a periodic, prepaid capitation basis regardless of the frequency, extent, or kind of services provided to any enrollee.
- (d) **Source of physicians' services.** The entity provides physicians' services primarily through—
  - (1) Physicians who are employees or partners of the entity; or
  - (2) Physicians or groups of physicians (organized on a group or individual practice basis) under contract with the entity to provide physicians' services.
- (e) **Assumption of financial risk.** The rules set forth in [§ 417.120(b)](/cfr/42/417.120.md?p=b) for HMOs apply also to CMPs except that reference to “basic services” must be read as reference to the required services listed in [paragraph (b)](#b) of this section.
- (f) **Protection of enrollees.** The entity provides adequately against the risk of insolvency by meeting the requirements of §§ [417.120(a)](/cfr/42/417.120.md?p=a) and [417.122](/cfr/42/417.122.md) for protection of enrollees against loss of benefits and liability for payment of any fees that are the legal responsibility of the entity.

## Notes

### Amendments

[60 FR 45675, Sept. 1, 1995]

### Source

Source: 50 FR 1346, Jan. 10, 1985, unless otherwise noted.

### Authority

Authority: 42 U.S.C. 1302 and 1395hh, and 300e, 300e-5, and 300e-9, and 31 U.S.C. 9701.

### Amendments

[60 FR 45675, Sept. 1, 1995]