Common use of Loss scenario Clause in Contracts

Loss scenario. If the medical component of the Capitation Rate Payment as set forth in Section 4.6.C.2 is less than Actual Medical Expenditures as set forth in Section 4.7.C.3, then the Contractor will be in a “Loss for the Contract Year”, with the “Gross Loss Amount for the Contract Year” defined as the difference between the Medical Component of the Capitation Rate Payment and the Actual Medical Expenditures. The Contractor and EOHHS will share the Gross Loss Amount for the Contract Year as set forth below: a. If the Gross Loss Amount for the Contract Year is less than or equal to 2% of the Medical Component of the Capitation Rate Payment, the Contractor share is 100% and the EOHHS share is 0%. b. If the Gross Loss Amount for the Contract Year is greater than 2% but less than or equal to 4% of the Medical Component of the Capitation Rate Payment, 1) For the first 2%, the Contractor share is 100% and the EOHHS share is 0%; and 2) For additional percentage above 2%, the Contractor share is 50% and the EOHHS share is 50%. c. If the Gross Loss Amount for the Contract Year is greater than 4% of the Medical Component of the Capitation Rate Payment, 1) For the first 2%, the Contractor share is 100% and the EOHHS share is 0%; 2) For 2% - 4%, the Contractor share is 50% and the EOHHS share is 50%; and 3) For additional percentage above 4%, the Contractor share is 20% and the EOHHS share is 80%.