(1) If a managed care organization fails to pay an assessment or penalty in the amount or on the date required by this article, the department shall add interest at the rate provided in section 806 of the act of April 9, 1929 (P.L. 343, No. 176),¹ known as The Fiscal Code, to the unpaid amount of the assessment or penalty from the date prescribed for its payment until the date it is paid.

(2) If a managed care organization fails to file a report or to furnish records to the department as required by this article, the department shall impose a penalty against the managed care organization in the amount of $1,000 per day for each day the report or required records are not submitted or furnished to the department. If the penalty under this paragraph is imposed, it shall commence on the first day after the date for which a report form or records are due.

(3) If a Medicaid managed care organization, or a managed care organization that is related through common ownership or control as defined in 42 CFR 413.17(b) (relating to cost to related organizations) to a medical assistance provider or to a managed care services entity providing managed health care coverage through a State program for persons of low income or CHIP, fails to pay all or part of an assessment or penalty within 60 days of the date that payment is due, at the direction of the department, the amount of the unpaid assessment or penalty and any interest owed by the managed care organization may be deducted from any medical assistance payments due to the Medicaid managed care organization or to any related medical assistance provider or from any other State payments due to a related managed care service entity until the full amount is recovered. Any such deduction shall be made only after written notice to the Medicaid managed care organization and the related medical assistance provider or managed care service entity and may be taken in installments over a period of time, taking into account the financial condition of the medical assistance provider or managed care service entity.

(4) The secretary may waive all or part of the interest or penalties assessed against a managed care organization under this article for good cause shown by the managed care organization.