HLT-41-14-00023-A Accountable Care Organizations (ACOs)
12/31/14 N.Y. St. Reg. HLT-41-14-00023-A
NEW YORK STATE REGISTER
VOLUME XXXVI, ISSUE 52
December 31, 2014
RULE MAKING ACTIVITIES
DEPARTMENT OF HEALTH
NOTICE OF ADOPTION
I.D No. HLT-41-14-00023-A
Filing No. 1072
Filing Date. Dec. 16, 2014
Effective Date. Dec. 31, 2014
Accountable Care Organizations (ACOs)
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Addition of Part 1003; and amendment of Subpart 98-1 of Title 10 NYCRR.
Statutory authority:
Public Health Law, art. 29-E and section 4403(2)
Subject:
Accountable Care Organizations (ACOs).
Purpose:
To promote ACOs and establish a certification process to regulate the use of ACOs to deliver an array of health care services.
Substance of final rule:
These proposed regulations would: (1) add a new Part 1003 to 10 NYCRR, entitled “Accountable Care Organizations,” to establish standards for the issuance of certificates of authority by the Commissioner of Health (Commissioner) to Accountable Care Organizations (ACOs); and (2) amend Part 98 of 10 NYCRR, entitled “Managed Care Organizations,” to make conforming changes to provisions related to Independent Practice Associations.
Part 1003 (Accountable Care Organizations)
Section 1003.1 (Applicability) provides that Part 1003 applies to persons or entities seeking certification as an ACO. The section further specifies that no application is required for a Medicare-only ACO whose contract with CMS does not permit shared losses to exceed 10 percent. This applies to the ACOs approved by CMS to participate in the Medicare Shared Savings Program. Such a Medicare-only ACO may receive certification through an expedited process and will be subject only to § § 1003.6 (Legal Structure and Responsibilities), 1003.11 (Payment and Third Party Payers), 1003.12 (Termination), 1003.13 (Reporting) and 1003.14 (Legal Protections) of Part 1003. Similarly, a Medicare-only ACO whose contract with CMS allows shared losses to exceed 10 percent may receive certification through an expedited process and will be subject to the aforementioned provisions as well as § 1003.5 (Medicare-Only ACOs Sharing Losses).
Section 1003.2 (Definitions) sets forth definitions for certain terms. In particular, an “ACO” is defined as “an organization comprised of clinically integrated independent health care providers that work together to provide, manage, and coordinate health care (including primary care) for a defined population; with a mechanism for shared governance; the ability to negotiate, receive, and distribute payments; and to be accountable for the quality, cost, and delivery of health care to the ACO's patients and has been issued a “certificate of authority” by the Commissioner.
Section 1003.3 (Certificate of Authority) establishes the criteria that must be satisfied for the Commissioner to approve a certificate of authority. Among other things, the ACO must demonstrate the capability to provide, manage and coordinate health care for a defined population, and its operation must include the participation of clinically integrated health care providers and administrative support organizations that are accountable for the quality, cost and delivery of health care to the individuals it serves.
Section 1003.4 (Application Requirements) provides that a person or entity seeking to obtain a certificate of authority must submit an application on forms prescribed by the Commissioner.
Section 1003.5 (Medicare-Only ACOs Sharing Losses) applies only to a Medicare-only ACO which may have shared losses that exceed ten percent of the benchmark established under its contract with CMS (meaning ACOs that participate in the Pioneer Program). The section allows such Medicare-only ACOs the ability to share losses without having to obtain an insurance license, subject to meeting several stringent financial conditions.
Section 1003.6 (Legal Structure and Responsibilities) sets forth requirements pertaining to the legal structure of an ACO, and provides that an approved ACO must provide, manage and coordinate health care for a defined population; be accountable for quality, cost, and delivery of health care to ACO patients; negotiate, receive and distribute any shared savings or losses; and establish, report and ensure provider compliance with health care criteria including quality performance standards. The section also requires that providers that participate in an ACO provide notification of such to their patients.
Section 1003.7 (Governing Body) requires that the governing body of an ACO have a transparent governing process and be responsible for the oversight and strategic direction of the ACO, holding those responsible for management of the ACO accountable for the ACO’s activities.
Section 1003.8 (Leadership and Management) provides that an ACO must have a leadership and management structure that supports the delivery of an array of health care services for the purpose of improving quality of care, health outcomes and coordination and accountability of services provided to patients.
Section 1003.9 (Quality Management and Improvement Program) requires ACOs to develop and implement a quality management and improvement program that identifies, evaluates and resolves quality related issues.
Section 1003.10 (Quality Performance Standards and Reporting) provides that the Department of Health (“Department”) shall collect from ACOs data related to quality assurance reporting requirements, which will be developed by the Department in conjunction with the National Committee on Quality Assurance. The ACO will be afforded the opportunity to review the information and correct any errors, and then the information will be posted on the Department’s public website. The section also provides that the ACO must demonstrate quality performance equal to or above statewide and/or national benchmarks.
Section 1003.11 (Payment and Third Party Health Care Payers) sets forth requirements for ACOs that enter into payment arrangements with a third party health care payer. In particular, the section clarifies that unless an ACO is licensed as an insurer under the Insurance Law or certified under Article 44 of the Public Health Law, the ACO is prohibited from engaging in any activity that would constitute the business of insurance under Insurance Law § 1101, except as provided in § 1003.11(b)(1) and (2).
Section 1003.12 (Termination) specifies that the Commissioner may limit, suspend or terminate the certificate of authority of an ACO after written notice and an opportunity for review and/or hearing. The section provides, among other things, that the failure to adhere to established quality measures or comply with corrective action plans related to poor performance on established quality of care standards constitute grounds for termination.
Section 1003.13 (Reporting) requires ACOs to submit data to the Commissioner annually and as otherwise requested. The data requested would include information about ACO participants and enrollees, utilization of services, complaints and grievances, quality metrics and shared savings or losses.
Section 1003.14 (Legal Protections; State Action Immunity) reflects the statutory intent to promote ACOs by excluding them from the application of certain provisions that might otherwise inhibit such arrangements:
• ACOs certified pursuant to Part 1003 shall not be considered to be in violation of Article 22 of the General Business Law relating to contracts or agreements in restraint of trade, if the ACO’s actions qualify for the safety zone, subject to the antitrust analysis set forth in the Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program issued by the Federal Trade Commission and U.S. Department of Justice and published in the Federal Register on October 28, 2011. (§ 1003.14(a));
• As part of its application for a certificate of authority under this part, an ACO may request that the State provide state action immunity from federal and state antitrust laws;
• ACOs certified pursuant to Part 1003 shall not be considered to be in violation of Education Law Article 131-A relating to fee splitting when certain criteria are satisfied (§ 1003.14(b));
• Health care providers shall not be considered to be in violation of Title 2-D of Article 2 of the Public Health Law when making referrals to other health care practitioners that are part of their ACO activities (§ 1003.14(c));
• Medicaid providers that enter into arrangements with an ACO, one or more of its ACO participants or its ACO providers/suppliers, or a combination thereof shall not be in violation of Social Services Law (“SSL”) § 366-d (§ 1003.14(d)); and
• The provision of health care services by an ACO shall not be considered the practice of a profession under Education Law Title 8 (§ 1003.14(f)).
Part 98 of NYCRR (Managed Care Organizations)
Section 98-1.2(w) is amended to expand the definition of an IPA to allow certification as an ACO pursuant to PHL Article 29-E and Part 1003 and provide that if so certified, the IPA may contract with third party health care payers.
Section 98-1.5(b)(vii)(f) is amended to provide that an IPA may seek certification as an ACO pursuant to PHL Article 29-E and Part 1003 and, if so certified, must comply with all the requirements of Part 1003, including but not limited to the requirements of § 1003.6(e) and (g). Upon receiving such certification, an IPA acting as an ACO may contract with third party health care payers. § 98-1.5(b)(vii)(f).
Section 98-1.5(b)(vii)(g) is added to provide that an IPA may include any and all necessary powers and purposes as authorized, allowed or required under an approved Delivery System Reform Incentive Payment (“DSRIP”) Program.
A copy of the full text of the regulatory proposal is available on the Department of Health website (www.health.ny.gov).
Final rule as compared with last published rule:
Nonsubstantive changes were made in sections 1003.2, 1003.3, 1003.4, 1003.5, 1003.7, 1003.10 and 1003.14.
Text of rule and any required statements and analyses may be obtained from:
Katherine Ceroalo, DOH, Bureau of House Counsel, Reg. Affairs Unit, Room 2438, ESP Tower Building, Albany, NY 12237, (518) 473-7488, email: regsqna@health.ny.gov
Revised Regulatory Impact Statement, Revised Regulatory Flexibility Analysis, Revised Rural Area Flexibility Analysis and Revised Job Impact Statement
Changes made to the last published rule do not necessitate revision to the previously published Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement.
Assessment of Public Comment
A Notice of Proposed Rule Making was initially published in the State Register on October 15, 2014. During the public comment period, comments were received from several health care providers, an association of behavioral health care providers, a hospital association, a health plan association, an accrediting organization, several organizations advocating on behalf of health care consumers, and legislators. Clarifications and technical, non-substantive changes have been made to the regulations in light of the comments received. The regulations will take effect today pursuant to a Notice of Adoption filed in today’s State Register. Copies of the full text of the regulations and the full assessment of public comments are available on the Department of Health’s website.
All comments received were reviewed and evaluated. In response to comments, 10 NYCRR § 1003.2 has been revised to: (1) include a definition of “health care provider” which utilizes the definition in PHL § 2999-o(6) instead of referring to PHL Article 29-E; (2) refer to “care coordination” rather than “care management” in the definition of “administrative services organization;” (3) add a reference to “an arrangement for such payments or prepayments” in the definition of a “capitation arrangement;” (4) change a reference from “systemic” to “systematic” in the definition of “clinical integration;” (5) move the definition of “guaranteeing parent corporation” to § 1003.5, which is the only place the term is referenced, and clarify that the definition should not be construed as permitting such entity to exercise control over the ACO’s governing board with respect to ACO operations; (6) clarify that the reference to the “population” in the definition of “shared losses” means the “defined population;” (7) clarify that the referenced certification of a “qualified health information technology entity” would mean a QE certification process recognized by the Commissioner of Health; and (8) clarify that a “third party payer” has its ordinary meanings, as set forth in PHL § 2999-o.
10 NYCRR § 1003.3 has been revised so that in addition to the information included in the application, the Commissioner shall consider any other relevant information known to him or her. 10 NYCRR § 1003.4 has been revised to require “proposed organizational documents” in lieu of organizational documents in case such documents are not yet final. 10 NYCRR § 1003.10 has been revised to clarify that the required statement about the accuracy of data applies to the ACO data that will be published on the Department’s website, as set forth in the preceding paragraph. 10 NYCRR § 1003.14 is revised to explicitly advise ACOs that the failure to comply with any requirements imposed by the Department in connection with its active supervision could impact their immunity.
Several proposed revisions were not incorporated because they were not consistent with the statutory authority underlying the proposed rulemaking. Other suggestions appeared to warrant further consideration for possible inclusion of future revisions to the regulations.
The full Assessment of Comments is available on the Department of Health’s website at www.health.ny.gov.