DOH Proposes State ACO Regulations

The Department of Health has published proposed regulations governing Accountable Care Organizations (ACOs).  Under the proposed regulations, a clinically-integrated network of independent health care providers that meets specified standards could apply for and obtain an ACO certificate of authority.   A provider network operating as an ACO would not be required to obtain a certificate of authority, but could elect to do so in order to benefit from the regulatory protections that the certificate would offer.  Under the regulations, Medicare Shared Savings Program ACOs that serve only Medicare beneficiaries could seek a certificate of authority through an expedited process without application. 

The certificate of authority would provide an ACO with an exemption from prohibitions against self-referral, corporate practice of medicine, and fee-splitting.  The certificate of authority would further allow Medicare Shared Savings ACOs to enter into shared loss (two-sided) risk arrangements with CMS without securing an insurance license.  Applicants for a certificate of authority could also seek immunity from federal and state antitrust enforcement actions. 

Applicants for a certificate of authority and certified ACOs would be required to satisfy a variety of requirements related to governance, data collection and reporting, and quality.  In particular, the ACO applicant would have to demonstrate that:

1. [It has] the capability to provide, manage and coordinate health care (including primary care) for a defined population including, where practicable, elevating the services of primary care health care providers to meet patient centered medical home standards, coordinating services for complex high need patients and providing access to health care providers that are not part of the ACO;
2. There is participation of clinically integrated health care providers and other ACO participants that are accountable for the quality, cost and delivery of health care to the ACO’s defined population;
3. There is a governance, leadership and management structure which is reasonably and equitably representative of the ACO participants and its patients; and
4. There is documentation of satisfactory character and competence required to conduct the affairs of the ACO in its best interests and in the public interest and so as to provide proper services for the patients to be served.

The governance structure of an ACO would have to include at least one Medicaid or CHPlus beneficiary and one person who is uninsured.

The regulations provide new opportunities for Independent Practice Associations (IPAs).  They would authorize IPAs to be ACO participants or to be certified as ACOs.  As certified ACOs, IPAs would be able to contract with most types of health care payers and purchasers.  Further, under the regulations, IPAs would have clear authority to participate in Performing Provider Systems (PPSs) under the Delivery System Reform Incentive Payment (DSRIP) Program. 

It is anticipated that DSRIP PPSs may themselves seek to become certified ACOs in order to benefit from the associated regulatory exemptions.

The Department is seeking comments on the proposed regulations until Dec. 1, 2014.

Contact:  Dan Heim, dheim@leadingageny.org, 518-867-8383, ext. 128