2013 New York Consolidated Laws
PBH - Public Health
Article 44 - (4400 - 4414) HEALTH MAINTENANCE ORGANIZATIONS
4408-A - Integrated delivery systems.

 
    * §  4408-a.  Integrated  delivery systems. 1. Legislative purpose and
  findings.  The  legislature  intends  to  facilitate  the   ability   of
  integrated delivery systems to assume a larger role in delivering a full
  array  of health care services, from primary and preventive care through
  acute inpatient hospital and post-hospital care to a defined  population
  for  a  determined  price.  The legislature finds that the formation and
  operation of integrated delivery systems under this section will promote
  the purposes of federal and state anti-referral statutes  which  are  to
  reduce  over-utilization  and  expenditures and finds that such statutes
  should not be interpreted to interfere  with  the  development  of  such
  integrated delivery systems or impose liability for arrangements between
  an integrated delivery system certified pursuant to this section and its
  participating providers and entities. The legislature further finds that
  the  development  of  integrated  delivery systems will reduce costs and
  enhance  quality.  It  intends  that  systems  acting  pursuant   to   a
  certificate  of authority issued under this section shall not be subject
  to state or federal antitrust liability for doing so.
    2. Definitions. For the purposes of this section:
    (a) "Applicant" means a separate legal entity created for the  purpose
  of establishing and operating an integrated delivery system. Such entity
  shall  be  composed of or controlled by one or more affiliated providers
  or one or more affiliated groups of providers.
    (b) "Provider" means an entity licensed  or  certified  under  article
  twenty-eight  or  thirty-six  of  this  chapter;  an  entity licensed or
  certified under article sixteen, twenty-three, thirty-one or  thirty-two
  of the mental hygiene law; or a health care practitioner, or combination
  of  health  care  practitioners,  licensed  under  title  eight  of  the
  education law. Every provider shall be: (i) a  natural  person;  (ii)  a
  partnership  all  of whose members are natural persons and that is not a
  limited partnership; or (iii) a corporation none of whose stock is owned
  by another corporation.
    3. The  commissioner,  after  receiving  from  the  superintendent  of
  financial  services  the  evaluations and approvals required pursuant to
  subdivision seven of this section, may issue a certificate of  authority
  to  an  applicant  which satisfies the conditions under this section for
  issuance established by the commissioner  and  which  seeks  to  deliver
  comprehensive health services, on a capitated basis, including inpatient
  services, to:
    (a)  persons  who  are  receiving  benefits  under  title XVIII of the
  federal social security act; or
    (b) persons who are receiving benefits under title XIX of the  federal
  social security act and commercial enrollees; or
    (c)  an  enrollee population which includes persons receiving benefits
  under titles XVIII and XIX  of  the  federal  social  security  act  and
  commercial enrollees.
    4.  An  applicant  must  demonstrate  to the commissioner that it will
  provide at least seventy-five percent  of  the  total  expenditures  for
  covered health care items and services directly to its enrollees through
  the  provider,  affiliated  providers  or affiliated groups of providers
  comprising such applicant. The  applicant  shall  make  arrangements  or
  referrals  for  any  covered health care items and services not provided
  directly to its enrollees by such applicant.
    5. A provider shall be deemed  affiliated  with  another  provider  or
  group of providers if, through contract, ownership or otherwise:
    (a) one provider, directly or indirectly, owns, controls, or holds the
  power  to  vote,  or proxies for, not less than fifty-one percent of the
  voting rights or governance rights of another;

    (b) each provider is a participant in a lawful combination under which
  each  provider  shares,  either  directly  or  indirectly,   substantial
  financial  risk  in  connection with the activities and services of such
  combination; or
    (c)  a  provider  is  a  corporate member of a provider organized as a
  not-for-profit corporation  duly  designated  pursuant  to  section  six
  hundred one of the not-for-profit corporation law.
    6. The commissioner shall be responsible for evaluating, approving and
  regulating all matters relating to delivery systems, quality of care and
  access to care to be provided through the integrated delivery system. In
  performing this responsibility, the commissioner shall assure:
    (a) that the formation and operation of the integrated delivery system
  will enhance access to health services in the area to be served; and
    (b)  subject  to  subdivision  four of this section, the comprehensive
  health services will be provided by the applicant through  its  proposed
  delivery system (including through providers other than those composing,
  affiliated with or controlling the applicant).
    7.  (a) The superintendent of financial services, in consultation with
  the commissioner in accordance with a protocol  to  be  specified  in  a
  memorandum   of   understanding   between   the   commissioner  and  the
  superintendent of financial services regarding fiscal solvency, shall be
  responsible  for  evaluating,  approving  and  regulating  all   matters
  relating  to  premium  rates,  subscriber contracts and fiscal solvency,
  including reserves, surplus and provider contracts to  the  extent  such
  contracts  relate  to  fiscal  solvency  matters.  The superintendent of
  financial services, in the administration of this subdivision, shall:
    (i) be guided by the standards which govern the fiscal solvency  of  a
  health   maintenance   organization,   provided,   however,   that   the
  superintendent of financial services shall recognize  and  consider  the
  specific   delivery   components,  operational  capacity  and  financial
  capability of the applicant for a certificate of authority; and
    (ii) not apply financial solvency standards that exceed those required
  for a health maintenance organization.
    (b) Standards  established  pursuant  to  this  subdivision  shall  be
  adequate  to  protect  the  interests  of  the subscribers to integrated
  delivery systems. The  superintendent  of  financial  services  must  be
  satisfied  that  the  applicant is fiscally sound, and has made adequate
  provisions to pay for services:
    (i) that are furnished by providers that are not affiliated  with  the
  applicant;
    (ii)  to  meet  the specialized health care needs of certain enrollees
  needing care at specialty care centers; and
    (iii) for which claims are submitted after the period  for  which  the
  applicant will receive payments.
    8.  The  integrated delivery system shall have its premiums determined
  on a community-rated basis in accordance with the insurance  law  except
  where  the enrollees are eligible to receive services under title XIX of
  the federal social security act in which case the premium rates shall be
  established by the commissioner, in consultation with the superintendent
  of financial services, subject to the approval of the  director  of  the
  division of the budget.
    9. An integrated delivery system shall be subject to the provisions of
  the   insurance   law   that   are   applicable  to  health  maintenance
  organizations,  this  chapter  and  regulations  applicable  to   health
  maintenance   organization,  and  any  regulations  promulgated  by  the
  commissioner or superintendent of financial services to  implement  this
  section.  To  the  extent  that  the  provisions  of  this  section  are

  inconsistent with the provisions of this chapter or  the  provisions  of
  the insurance law, the provisions of this section shall prevail.
    10.  No  certificate  of  authority  for an integrated delivery system
  shall be issued pursuant to this section on or after  April  first,  two
  thousand  two and integrated delivery systems issued certificates before
  such date shall accept no new enrollees thereafter.
    * NB There are 2 § 4408-a's