§ 4408-A — Integrated delivery systems

* § 4408-a. Integrated delivery systems. 1. Legislative purpose and\nfindings. The legislature intends to facilitate the ability of\nintegrated delivery systems to assume a larger role in delivering a full\narray of health care services, from primary and preventive care through\nacute inpatient hospital and post-hospital care to a defined population\nfor a determined price. The legislature finds that the formation and\noperation of integrated delivery systems under this section will promote\nthe purposes of federal and state anti-referral statutes which are to\nreduce over-utilization and expenditures and finds that such statutes\nshould not be interpreted to interfere with the development of such\nintegrated delivery systems or impose liability for arrangements between\nan integrated delivery system certified pursuant to this section and its\nparticipating providers and entities. The legislature further finds that\nthe development of integrated delivery systems will reduce costs and\nenhance quality. It intends that systems acting pursuant to a\ncertificate of authority issued under this section shall not be subject\nto state or federal antitrust liability for doing so.\n 2. Definitions. For the purposes of this section:\n (a) "Applicant" means a separate legal entity created for the purpose\nof establishing and operating an integrated delivery system. Such entity\nshall be composed of or controlled by one or more affiliated providers\nor one or more affiliated groups of providers.\n (b) "Provider" means an entity licensed or certified under article\ntwenty-eight or thirty-six of this chapter; an entity licensed or\ncertified under article sixteen, twenty-three, thirty-one or thirty-two\nof the mental hygiene law; or a health care practitioner, or combination\nof health care practitioners, licensed under title eight of the\neducation law. Every provider shall be: (i) a natural person; (ii) a\npartnership all of whose members are natural persons and that is not a\nlimited partnership; or (iii) a corporation none of whose stock is owned\nby another corporation.\n 3. The commissioner, after receiving from the superintendent of\nfinancial services the evaluations and approvals required pursuant to\nsubdivision seven of this section, may issue a certificate of authority\nto an applicant which satisfies the conditions under this section for\nissuance established by the commissioner and which seeks to deliver\ncomprehensive health services, on a capitated basis, including inpatient\nservices, to:\n (a) persons who are receiving benefits under title XVIII of the\nfederal social security act; or\n (b) persons who are receiving benefits under title XIX of the federal\nsocial security act and commercial enrollees; or\n (c) an enrollee population which includes persons receiving benefits\nunder titles XVIII and XIX of the federal social security act and\ncommercial enrollees.\n 4. An applicant must demonstrate to the commissioner that it will\nprovide at least seventy-five percent of the total expenditures for\ncovered health care items and services directly to its enrollees through\nthe provider, affiliated providers or affiliated groups of providers\ncomprising such applicant. The applicant shall make arrangements or\nreferrals for any covered health care items and services not provided\ndirectly to its enrollees by such applicant.\n 5. A provider shall be deemed affiliated with another provider or\ngroup of providers if, through contract, ownership or otherwise:\n (a) one provider, directly or indirectly, owns, controls, or holds the\npower to vote, or proxies for, not less than fifty-one percent of the\nvoting rights or governance rights of another;\n (b) each provider is a participant in a lawful combination under which\neach provider shares, either directly or indirectly, substantial\nfinancial risk in connection with the activities and services of such\ncombination; or\n (c) a provider is a corporate member of a provider organized as a\nnot-for-profit corporation duly designated pursuant to section six\nhundred one of the not-for-profit corporation law.\n 6. The commissioner shall be responsible for evaluating, approving and\nregulating all matters relating to delivery systems, quality of care and\naccess to care to be provided through the integrated delivery system. In\nperforming this responsibility, the commissioner shall assure:\n (a) that the formation and operation of the integrated delivery system\nwill enhance access to health services in the area to be served; and\n (b) subject to subdivision four of this section, the comprehensive\nhealth services will be provided by the applicant through its proposed\ndelivery system (including through providers other than those composing,\naffiliated with or controlling the applicant).\n 7. (a) The superintendent of financial services, in consultation with\nthe commissioner in accordance with a protocol to be specified in a\nmemorandum of understanding between the commissioner and the\nsuperintendent of financial services regarding fiscal solvency, shall be\nresponsible for evaluating, approving and regulating all matters\nrelating to premium rates, subscriber contracts and fiscal solvency,\nincluding reserves, surplus and provider contracts to the extent such\ncontracts relate to fiscal solvency matters. The superintendent of\nfinancial services, in the administration of this subdivision, shall:\n (i) be guided by the standards which govern the fiscal solvency of a\nhealth maintenance organization, provided, however, that the\nsuperintendent of financial services shall recognize and consider the\nspecific delivery components, operational capacity and financial\ncapability of the applicant for a certificate of authority; and\n (ii) not apply financial solvency standards that exceed those required\nfor a health maintenance organization.\n (b) Standards established pursuant to this subdivision shall be\nadequate to protect the interests of the subscribers to integrated\ndelivery systems. The superintendent of financial services must be\nsatisfied that the applicant is fiscally sound, and has made adequate\nprovisions to pay for services:\n (i) that are furnished by providers that are not affiliated with the\napplicant;\n (ii) to meet the specialized health care needs of certain enrollees\nneeding care at specialty care centers; and\n (iii) for which claims are submitted after the period for which the\napplicant will receive payments.\n 8. The integrated delivery system shall have its premiums determined\non a community-rated basis in accordance with the insurance law except\nwhere the enrollees are eligible to receive services under title XIX of\nthe federal social security act in which case the premium rates shall be\nestablished by the commissioner, in consultation with the superintendent\nof financial services, subject to the approval of the director of the\ndivision of the budget.\n 9. An integrated delivery system shall be subject to the provisions of\nthe insurance law that are applicable to health maintenance\norganizations, this chapter and regulations applicable to health\nmaintenance organization, and any regulations promulgated by the\ncommissioner or superintendent of financial services to implement this\nsection. To the extent that the provisions of this section are\ninconsistent with the provisions of this chapter or the provisions of\nthe insurance law, the provisions of this section shall prevail.\n 10. No certificate of authority for an integrated delivery system\nshall be issued pursuant to this section on or after April first, two\nthousand two and integrated delivery systems issued certificates before\nsuch date shall accept no new enrollees thereafter.\n * NB There are 2 § 4408-a's\n