New York State Governor Andrew Cuomo recently signed into law legislation that provides significant amendments to the state's law governing accountable care organizations ("ACOs"). The new law became effective on October 3, 2012.
New York's ACO law, enacted in March 2011 as a demonstration program, provided that an entity that wants to operate as an ACO in the state must obtain a certificate of authority (a "CA") from the NYS Commissioner of Health. The Commissioner was to issue regulations establishing the criteria for the issuance of a CA and was limited to issuing no more than 7 CAs. To date, the Commissioner has not issued any such regulations for the issuance of CAs and no CA has been issued to any applicant to operate as an ACO in NY. Moreover, there has been uncertainty as to whether the law, including the requirement to obtain a CA, would apply to ACOs that are approved by CMS to participate in the Medicare Shared Savings Program.
The new state legislation amends the ACO law to remove the 7 CA limit and requires the Commissioner to establish a program to promote and regulate ACOs. In addition, an ACO approved by CMS may apply for a CA as a "Medicare-only ACO" and the Commissioner "shall" issue such certificate to an entity that documents its status as approved by CMS. The CA will apply only to the Medicare-only ACO's actions in relation to Medicare beneficiaries under its authorization from CMS.