More and more we are seeing providers accepting risk contracts.  These come in many forms, but the easiest ones to spot are per member per month capitated payments from a health plan.  If the provider is accepting these capitated/risk contracts for its own practice, there is typically not an issue.  More frequently, however, we are seeing entities put together a network of physicians as downstream contractors.  This may very well subject the contracting entity to certification requirements as either a Fiscal Intermediary Services Organization (“FISO”) or Third Party Administrator (“TPA”) in the State of Florida.

Here is a common scenario:  Physician sets up a management services organization (“MSO”) to accept capitated payments from a Medicare Advantage Organization (the “Plan”).  MSO enters into a contract with the Plan, and the Plan pays MSO $X per patient/per month to manage a certain line of services for the patient (example: primary care services).  The MSO contracts with downstream providers whom it pays either a lesser per patient/per month fee, payment based on  quality metrics, or a fee for service model.  In all of these scenarios, the MSO is responsible for paying its downstream providers. 

The scenario above requires the MSO to hold a certificate of authority as a FISO or TPA in the State of Florida.  The main distinction between having to register as a FISO versus a TPA is whether the entity provides services just to HMOs (in which case it can usually register as a FISO), or it also has contracts and provides services to non-HMOs (in which case it is more likely a TPA).  The Florida Statutes have very specific definitions for a FISO and a TPA, which we have summarized below. These are complex statutes that need to be interpreted in the context of specific services provided by the entity.

So where do you start to determine whether you are a FISO, TPA, or don’t have to register at all? The first step is to look at your contracts with the insurance companies.  They typically include a set of services and payment methodologies that need to be analyzed against the licensing statutes. In many cases, we’ve had clients who explain to us their services do not trigger these statutes, but in reviewing their contracts, and the services that are to be provided pursuant to those contracts, it becomes apparent either the contract needs updated to limit the services, or the entity needs to register as a FISO or TPA.

F.S 626.88 defines an “Administrator” [TPA] as the following:

. . .any person who directly or indirectly solicits or effects coverage of, collects charges or premiums from, or adjusts or settles claims on residents of this state in connection with authorized commercial self-insurance funds or with insured or self-insured programs which provide life or health insurance coverage or coverage of any other expenses described in s. 624.33(1) or any person who, through a health care risk contract as defined in s. 641.234 with an insurer or health maintenance organization, provides billing and collection services to health insurers and health maintenance organizations on behalf of health care providers[.]

There are several exceptions such as an employer on behalf of employees, certain functions of insurance companies or their affiliates, a provider or group practice (as defined in F.S. Section 456.053) providing services under the scope of the license of the provider or group practice member, and hospitals billing claims on behalf of the hospital or their physicians for services under their license, among others.

F.S Section 641.316 defines a “Fiscal Intermediary Services Organization” as the following:

. . .a person or entity that performs fiduciary or fiscal intermediary services to health care professionals who contract with health maintenance organizations other than a hospital licensed under chapter 395, an insurer licensed under chapter 624, a third-party administrator licensed under chapter 626, a prepaid limited health service organization licensed under chapter 636, a health maintenance organization licensed under this chapter, or a physician group practice as defined in s. 456.053(3)(h) which provides services under the scope of licenses of the members of the group practice.

Both FISOs and TPAs must submit applications to receive a certificate of authority from the State.  In addition, there are certain financial solvency and bond requirements these entities must meet along with a list of regulations and statutory requirements the entity must follow.  Failure to comply can lead to suspension, revocation of certificates, or administrative fines.

We are finding that providers are not aware of these registration requirements and often not considering them as they enter into risk-based contracts.  Failure to register as required under the Florida Insurance Code may subject the organization to significant financial fines and penalties.

Based on the foregoing, it is imperative that providers that are paying downstream contractors under these network type arrangements examine their contracts to see if they need to register.  If you are unsure whether you should register, our Gunster attorneys can assist in evaluating your contracts and functions to determine if these laws apply to your organization, help you register if necessary, and assist you in legal matters from an insurance and healthcare regulatory standpoint.

If you have any questions regarding this Client Alert, please contact Sha’Ron James or Samantha Prokop.


This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.

About Gunster

Gunster, Florida’s law firm for business, provides full-service legal counsel to leading organizations and individuals from its 12 offices statewide. Established in 1925, the firm has expanded, diversified and evolved, but always with a singular focus: Florida and its clients’ stake in it. A magnet for business-savvy attorneys who embrace collaboration for the greatest advantage of clients, Gunster’s growth has not been at the expense of personalized service but because of it. The firm serves clients from its offices in Boca Raton, Fort Lauderdale, Jacksonville, Miami, Orlando, Palm Beach, Stuart, Tallahassee, Tampa, Vero Beach, and its headquarters in West Palm Beach. With more than 240 attorneys and consultants, and over 240 committed support staff, Gunster is ranked among the National Law Journal’s list of the 500 largest law firms and has been recognized as one of the Top 100 Diverse Law Firms by Law360. More information about its practice areas, offices and insider’s view newsletters is available at


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