Shall mean 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;
• that has the ability to negotiate, receive, and distribute payments, and to be accountable for the quality, cost, and delivery of Health Care Services to the ACO´s patients; and
• that has been issued a certificate of authority as per 10 NYCRR Part 1003.

Shall mean making an independent determination to pay, deny, or pend claims for payment. This is different than the ministerial task of writing a check for payment based upon the decision to act on a claim made by a different entity. Therefore, if claims adjudication/payment is to be delegated, it must be addressed in a separate management contract, and not in the provider contract. However, merely passing payment (including savings or recouping payment or losses) through an IPA or ACO to a downstream contracted provider does not constitute Claims Adjudication/Payment.

Shall mean, for purposes of these Guidelines covered services as defined in the subscriber contracts for Commercial products and in the Model Contracts for any Medicaid products. The following covered services are NOT considered Health Care Services for the purpose of these Guidelines:

• Medicaid Health Home services;
• MLTC Care Management services; and
• Fiscal intermediary services for the Consumer Directed Personal Assistance Services (CDPAS).

Shall mean, for purposes of these Guidelines the same as defined in 10 NYCRR §98– 1.2(w).

Shall mean:

• Traditional health maintenance organizations certified pursuant to New York State Public Health Law (PHL) §4403; or
• Special purpose MCOs, also known as prepaid health services plans (PHSP), certified pursuant to PHL §4403–a; or
• HIV Special Needs Plans (HIV SNP) certified pursuant to PHL §4403–c; or
• Managed long term care (MLTC) plans certified pursuant to PHL §4403–f.

Shall mean those elements of an MCO governing body´s management authority, which are listed in 10 NYCRR §98–1.11(j), which may be delegated to another person or entity, but only pursuant to a management contract approved by DOH. The management functions listed in 10 NYCRR §98–1.11(i) must not be delegated by an MCO to another person or entity.

Shall mean an amendment to an approved contract or approved template that includes a Material Change.

Shall include, but not be limited to:

• Any change to a required contract provision or appendix as specified in Section VI herein and the Standard Clauses;
• Any change to, or addition of a Shared Saving, Shared Risk, or Value Based Payment arrangement, other than the routine trending of fees or other reimbursement amounts that does not change the Tier or make the arrangement off–menu;
• Any change to performance measures or quality targets that are inconsistent with the applicable Clinical Advisory Group Playbook (described in the Roadmap) or previously approved off–menu arrangement;
• The addition of an exclusivity, most favored nation, or non–compete clause;
• Any proposed subcontracting of the existing contractual obligations of an IPA and ACO;
• Any proposed subcontracting of the statutory or regulatory responsibilities of an MCO; or
• Any proposed revocation/termination of an approved delegation of the above contractual, statutory or regulatory responsibilities.
  Authority: 10 NYCRR §98–1.2(aa)

Shall refer to the model contract that governs the various Managed Care Organization product lines that are authorized as:

• Traditional health maintenance organizations certified pursuant to NYS PHL §4403; or
• Special purpose MCOs, also known as prepaid health services plans (PHSP), certified pursuant to NYS PHL §4403–a; or
• HIV Special Needs Plans (HIV SNP) certified pursuant to NYS PHL §4403–c; or
• Managed Long Term care plans (MLTC) certified pursuant to NYS PHL §4403–f.

Shall mean the contract clauses mandated by the New York State Department of Health that are required to be attached to and expressly incorporated into the body of the contract. All Article 44 plans and providers that contract with such plans, and who are a party to the contract are bound to honor the Standard Clauses except to the extent applicable law requires otherwise.

Shall be defined as a document that is updated periodically by the New York State Department of Health and approved by the Centers for Medicare and Medicaid Services (CMS) to ensure that best practices and lessons learned throughout implementation of Value Based Payment into Medicaid Managed Care Organizations are leveraged and incorporated into the State´s overall vision. The Roadmap contains detailed information regarding the VBP program, including the definitions and criteria for on–menu and off– menu VBP arrangements. The Roadmap is published on the New York State Department of Health´s website.

Shall mean a payment method in which a health care provider or IPA assumes liability by means of a capitation arrangement or other mechanism whereby the provider, IPA, or ACO assumes financial risk from the MCO for the delivery of specified health care services to enrollees of the MCO.

Shall mean a payment method that offers incentives for providers and IPAs and ACOs to control health care costs for a defined patient population by offering them a percentage of any net savings realized as a result of their efforts. Shared Savings are calculated in relation to a target budget. Shared Savings arrangements involve two payment streams: (i) an initial stream of payments, such as fee–for–service (FFS), and (ii) reconciliation payments made to providers for the agreed upon percentage of savings generated as compared to a target budget for the managed population.

Shall mean any functions (other than Health Care Services) that an MCO is not prohibited from delegating by 10 NYCRR §98–1.11(i), and that are not listed in 10 NYCRR §98–1.11(j) as a management function which requires a management contract to be submitted to DOH for approval. Technical and Administrative Services expenses incurred by an IPA, ACO, or provider in the course of performing its business are not considered technical or administrative expenses of the MCO. The IPA/ACO or provider agreement must not address management functions which require a separate management contract to be submitted to DOH for approval.

Shall mean a payment strategy that is used by purchasers and providers to promote quality and value of Health Care Services. The goal of any VBP program is to shift from volume–based payment, as exemplified by fee–for–service payments, to payments that are more closely related to both quality and cost outcomes (e.g., Shared Savings arrangements, Shared Risk arrangements, bundles, fee–for–service for a limited set of preventative care activities tied to quality measures, and approved off–menu arrangements, as referenced in the Roadmap).

Shall mean a payment method in which a portion of the compensation is dependent on quality and/or cost outcomes. VBP agreements can include traditional fee–for–service arrangements as well as Shared Savings and Shared Risk arrangements provided that a portion of compensation is dependent on provider performance.

DOH review will commence upon receipt of ALL of the following:

1. One (1) electronic copy of each contract, template, or Material Amendment submitted for approval, in a standard searchable PDF format that meets the following requirements:
   1. The Standard Clauses Appendix, without modification, must be attached (this is not required for a Material Amendment unless the Standard Clauses have not yet been updated as required by Section II.D) and the provisions of such Appendix must be expressly incorporated by reference in the body of the contract, template, or Material Amendment by using the required incorporation language as specified in Section VI.A.3.
   2. Each contract, template, or Material Amendment must be for Health Care Services and Technical and Administrative Services only (see Section II.B).
   3. Each contract, template or Material Amendment must have an MCO–assigned unique identifier made up of any combination of letters and numbers; the unique identifier for a Material Amendment must use the unique identifier from the original contract or source template as a prefix. All contracts, templates, or Material Amendments including executed template agreements, must have the unique identifier printed on each page of the respective documents.
   4. Each contract or Material Amendment must be dated; all Material Amendments to an approved contract must reference the date of the originally approved contract; all new and amended language shall be underlined and all deleted language bracketed or otherwise highlighted (e.g., a redline version) for ease of review.
   5. If arrangements for payment to the provider (including payment for Shared Savings, Shared Risk, or Value Based Payment) are contained in multiple contracts, then all such contracts must be included with the submission and the additional agreements must be properly incorporated and made part of the main provider agreement. The payment methodology must be described for such arrangements.
      
      A contract between an MCO and an IPA/ACO or between an IPA/ACO and an IPA/ACO must be submitted with all related contracts between or among the MCO(s), IPA(s), ACO(s), and participating providers.
   6. A completed DOH–4255 Contract Statement and Certification, for each contract, template, or Material Amendment including an electronic copy of the DOH–4255 in PDF format, each bearing the same MCO–assigned unique identifier as the submitted contract, template, or Material Amendment. In all cases, the certification must be signed by an officer of the MCO or the MCO´s legal counsel and must be notarized.
   7. All required supporting documentation as described in these Guidelines and on the DOH–4255.
      
      If at any time during the review process, modifications are made to the submitted contract that render inaccurate any statements made in the Contract Statement and Certification (DOH–4255), the MCO must submit a new, corrected, and signed DOH– 4255. After DOH approval is received, the MCO must submit an electronic copy of the executed contract or amendment as directed in the approval letter. It is the responsibility of the MCO to provide approval letters if requested by DOH.

Contracts and Material Amendments will be processed as File and Use if:

1. The contract or Material Amendment meets the criteria of Tier 1 - File and Use as described in Section VII.B of these Guidelines; and
2. The DOH–4255 certification is signed, dated and notarized; and
3. The contract expressly provides that the parties agree to incorporate all modifications required by DOH for approval or to terminate the contract if so directed by DOH.

Under Tier 1 – File and Use, the contract, template, or Material Amendment is deemed approved upon acknowledgement by DOH that the submission has been received and meets the requirements of Section III. The MCO may implement the contract immediately upon said acknowledgement. DOH will provide such acknowledgement within no more than three business days. However, if directed by DOH, the parties to the contract will make the requested modifications or terminate the contract.

Contracts and Material Amendments will be processed for programmatic and financial review if:

1. The resulting contract meets the criteria of either Tier 2 – DOH Review or Tier 3 – Multi–Agency Review as described in Section VII.B of these Guidelines; and
2. All required information and supporting documentation, as described in Section VII.B of these Guidelines, is included; and
3. The DOH–4255 certification is signed, dated, and notarized; and
4. The contract expressly provides that the parties agree to incorporate all modifications required by DOH for approval, or to terminate the contract if so directed by DOH.

Under Tier 2 – DOH Review, the contract or Material Amendment may be implemented upon receipt of written approval from DOH (or DFS if applicable). Notwithstanding the foregoing, the contract or Material Amendment may be implemented 90 days after submission that meets the requirements of Section III, provided the MCO was not directed by DOH to not implement. However, if directed by DOH, the parties to the contract will either make requested modifications or terminate the contract.

Templates will be processed for programmatic and financial review if:

• Use of the template is likely, as determined by DOH, to result in a Tier 1 contract when used as described in the completed DOH–4255 certification form;
• The DOH–4255 certification is signed, dated, and notarized; and
• The template expressly provides that the parties agree to incorporate all modifications required by DOH for approval or to terminate the contract if so directed by DOH.

DOH will approve template provider contracts (or amendments to such templates) that: (a) conform to the requirement of these Guidelines; and (b) involve only Tier 1 File and Use, as described in Section VII.B of these Guidelines. An approved template contract may be executed with multiple providers without separate DOH approval unless Material Changes are included in the individual contract with the provider.

The following changes/revisions to previously approved templates are not considered material changes and do not need to be submitted to DOH for approval, included but not limited to:

• Technical changes to clarify a provision, to identify the parties, or to specify the contract for use with particular parties (e.g., inserting the appropriate address and contract information into blank fields);
• Extension of the contract term in an executed agreement using an approved template;
• The addition of a National Committee for Quality Assurance (NCQA) required clause, provided that State law, regulation or the Standard Clauses will prevail in the event of a conflict;
• The addition of a Medicare Advantage–required or Fully Integrated Duals Advantage (FIDA)–required clause;
• The addition of clauses that apply to only lines of business that are not regulated by state law or regulation (such as self–funded products);
• The addition of a required provision by the parent company, provided that state law, regulation, or the Standard Clauses will prevail in the event of a conflict.

1. The contract must include a provision stating that this is the only agreement between the parties regarding the arrangement established therein. (SC §B.1) .
2. If a contract is to be implemented prior to DOH approval, as described in Section III of these Guidelines, it must include a provision that any changes to the contract required by DOH will be made by the parties and that the parties agree to terminate the contract at the direction of DOH effective 60 days subsequent to notice, subject to PHL §4403(6) (e). (SC §B.1) .
3. The contract must include a provision whereby the Article 44 plans and providers that contract with such plans, and who are a party thereto agree to be bound by the mandatory Standard Clauses attached to and incorporated into the agreement. The parties must further agree that to the extent there are any inconsistencies between the other provisions of the agreement and the Standard Clauses, the Standard Clauses shall control, except to the extent applicable law requires otherwise and/or to the extent the parties to the contract have voluntarily agreed to other provisions that exceed the minimum requirements of the Standard Clauses. No amendments or revisions to the Standard Clauses are permitted. The following language is mandatory and is required to be in the main body of the agreement:
   • The "New York State Department of Health Standard Clauses for Managed Care Provider/IPA/ACO Contracts", attached to the Agreement as Appendix _______________________________________________, are expressly incorporated into this Agreement and are binding upon the Article 44 plans and providers that contract with such plans, and who are a party to this Agreement. In the event of any inconsistent or contrary language between the Standard Clauses and any other part of the Agreement, including but not limited to appendices, amendments, and exhibits, the parties agree that the provisions of the Standard Clauses shall prevail, except to the extent applicable law requires otherwise and/or to the extent a provision of the Agreement exceeds the minimum requirements of the Standard Clauses.
4. The following contract provisions are strongly discouraged by DOH:
   1. "Exclusivity" clause, whereby a provider must agree not to contract with any other MCO or IPA/ACO;
   2. "Exclusion" clause, whereby a provider must agree not to accept enrollees of one or more specified MCOs; and/or
   3. "Most favored Nation" clause, whereby a plan may unilaterally reduce a negotiated rate to a provider where the provider negotiates a more favorable rate with a competing plan.
5. The contract must include clear provisions for the reimbursement of providers, including, but not limited to fee for service, Shared Savings arrangements, Value Based Payment arrangements, or Shared Risk arrangements.
   
   The contract must prescribe:
   1. The method by which payments to a provider of Health Care Services shall be calculated, including any prospective or retrospective adjustments thereto and any Shared Savings or Value Based Payment arrangements;
   2. The time periods within which such calculations will be completed, the dates upon which any such payments and adjustments shall be determined to be due, and the dates upon which any such payments and adjustments will be made;
   3. The records, metrics, or other information which the MCO will rely upon to calculate payments and adjustments;
   4. The dispute resolution procedures; and
   5. If the provider is a health care professional, the procedure for implementing an "adverse reimbursement change," which must conform to the requirements of PHL §4406–c(5–c) and must include the MCO or IPA/ACO providing the health care professional written notice at least 90 days prior to the effective date of any such change. (SC §C.3) .
   See Section VII of these Guidelines for additional financial requirements.
   
   NOTE: This section applies to all agreements among MCOs, IPA/ACOs, and participating providers including when a Value Based Payment arrangement is utilized between any of the entities on a contracted or subcontracted basis.
   
   NOTE: If a contract is to be amended, the amended contract must specify the calendar date on which any proposed change to a payment rate will take effect, without regard to the date the contract amendment is fully executed.
   
   NOTE: DOH approval of a contract or Material Amendment based upon provider solvency and related financial standards does not constitute an affirmation as to the reasonableness of the payments agreed to by the parties in the contract or Material Amendment. Approval of a contract or Material Amendment by DOH does not guarantee that the level of reimbursement in the contract or Material Amendment will be recognized in premium rates paid to the MCO by New York State for participation in and services provided under any government sponsored managed care or health insurance program.
   
   Authority: PHL § §4403 (1)(c), (e), 4403–a(3), and 4406–c(5–a); 10 NYCRR § §98–1.5 (b)(6)(i), 98–1.6 (b), 98–1.11(d) and 98–1.18(e).
6. The contract must include provisions that are not inconsistent with the following:
   1. Assignment. The prior approval of the DOH Commissioner is required for assignment of the following agreements:
      1. an agreement between a MCO and an IPA/ACO, institutional network provider, or medical group provider that serves five percent or more of the enrolled population in a county, or
      2. an agreement between an IPA/ACO and an institutional provider or medical group provider that serves five percent or more of the enrolled population in a county. (SC §B.3) .
   2. Termination or Non–renewal. Notice by the MCO to the DOH Commissioner is required when:
      1. an agreement between a MCO and an IPA/ACO, institutional network provider, or medical group provider that serves five percent or more of the enrolled population in a county, or
      2. an agreement between an IPA/ACO and an institutional provider or medical group provider that serves five percent or more of the enrolled population in a county, requires notice by the MCO to the Commissioner.
      3. an agreement between a MCO or IPA/ACO with a medical group provider in which termination or non–renewal of such agreement will leave fewer than two participating providers of that type within the county.
      Unless otherwise provided by statute or regulation, the effective date of termination should not be less than 45 days after receipt by the Commissioner of notice by either party, provided, however, that termination by an MCO may be effected on less than 45 days´ notice when it can be demonstrated to DOH prior to termination that, e.g., a hospital has lost Joint Commission accreditation or malpractice insurance coverage, or other circumstances have arisen which justify or require immediate termination. Notice to the Commissioner must include an impact analysis of the termination or non–renewal on enrollees´ access to care. (SC §E.1) .
   3. Contracts between a hospital (as defined in PHL §2801) and licensed practitioners, professional corporations or professional services limited liability companies do not require DOH approval; however, such contracts should include provisions necessary to permit the hospital to meet its contractual obligations to the MCO or IPA/ACO.
   NOTE: PHL §4406–d prohibits termination of a health care professional contract by an MCO or IPA/ACO without notice and the opportunity for a hearing, subject to certain exceptions; non–renewal is permitted on 60 days´ notice and shall not be considered a termination under §4406–d. (SC §E.2) .
   
   Authority: PHL § §4406–d (2)(f) and (3); 10 NYCRR § §98–1.8 (b), 98–1.13 (c), 98–1.18 (a) and (b).
7. The contract must include a continuation of treatment clause whereby the provider agrees that in the event of MCO or IPA/ACO insolvency or termination of the contract for any reason, the provider shall continue, until medically appropriate discharge or transfer, or completion of a course of treatment, whichever occurs first, to provide services pursuant to the subscriber contract, Medicaid Managed Care contract or Managed Long Term Care contract, to an enrollee confined in an inpatient facility, provided the confinement or course of treatment was commenced during the paid premium period. Such provisions shall by express statement survive termination of the agreement. (SC §E.4) .
   
   The contract may also include express provisions addressing the transitional care available to enrollees pursuant to PHL §4403(6)(e) involved in an ongoing course of treatment at the time his/her provider´s disaffiliation with the MCO at the enrollee´s option, or as to an enrollee who has entered the second trimester of pregnancy, on the effective date of termination, through the delivery of post–partum care directly related to the delivery pursuant to PHL §4403 (6) (e). Addressing this enrollee option in provider contracts will help ensure provider awareness of these provisions.
   
   Authority: PHL §4403 (6)(e); 10 NYCRR § §98–1.6 (f), 98–1.13 (a) and (b).
8. MCO may not impose deductibles. Copayments and coinsurance are the only allowable enrollee cost–sharing mechanisms. Contracts should not reference deductibles.
   
   The exception is that an MCO may impose deductibles pursuant to: (a) a point of service (POS); (b) to the extent permitted by DOH and DFS, a High Deductible Health Plan (HDHP) combined with a health savings account (HSA); or (c) as otherwise allowed or approved by DOH. Use of the term "deductible" may be made in these contexts, or the contract may refer to "permitted deductibles," defined as a deductible associated with a POS contract or an approved HDHP.
   
   Authority: 10 NYCRR §98–1.6(f) requires the availability and accessibility of Health Care Services to enrollees. DOH interprets that regulation as prohibiting the imposition of front–end deductibles since they impede access to care.
9. Coordination of Benefits (COB) monies generally become property of the MCO. Providers may participate in the collection of COB proceeds on behalf of the MCO, with COB proceeds accruing to the MCO. Pursuant to contract, COB proceeds may accrue to providers. However, with respect to enrollees eligible for Medicaid Assistance or participating in Child Health Plus, providers must maintain and make available to the MCO records reflecting COB proceeds collected by the provider or paid directly to enrollees by third party payers, and amounts thereof, and the MCO shall maintain or have immediate access to records concerning collection of COB proceeds. (SC §C.2) .
   
   MCOs are subject to audits under the government sponsored health insurance programs, including but not limited to the Medicaid and Child Health Plus programs, including audits which can be conducted without notice by the Office of the State Comptroller for COB collected for enrollees in these government programs. MCOs must therefore have records concerning collection of COB proceeds available.
10. The contract must include a provision whereby the parties agree to comply with all applicable Federal and State laws, rules, and regulations including but not limited to those specified in the Standard Clauses.
11. The Provider agrees, or if the Agreement is between the MCO and an IPA/ACO or between an IPA/ACO and an IPA/ACO, the IPA/ACO agrees and shall require the IPA/ACO´s Providers to agree, to comply fully and abide by the rules, policies and procedures that the MCO (a) has established or will establish to meet general or specific obligations placed on the MCO by statute, regulation, contract, or DOH or DFS guidelines or policies and (b) has provided to the Provider at least thirty days in advance of implementation, including but not limited to:
    • quality improvement/management;
    • utilization management, including but not limited to precertification procedures, referral process or protocols, and reporting of clinical encounter data;
    • member grievances; and
    • Provider credentialing.
    Notwithstanding the above, nothing herein shall preclude the parties from agreeing to exceptions or alternatives to the MCO´s general rules, policies and procedures provided that any exceptions or alternatives do not prevent the MCO from meeting required obligations.

1. For a contract involving Tier 2 or 3 arrangements as described in Section VII.B of these Guidelines, the contract must:
   1. Provide for the MCO´s ongoing monitoring of provider financial capacity and/or periodic provider financial reporting to the MCO to support the transfer of risk to the provider; and
   2. Include a provision to address circumstances where the provider´s financial condition indicates an inability to continue accepting such risk; and
   3. Address MCO monitoring of the financial security deposit, describing the method and frequency of monitoring and recourse for correcting underfunding of the deposit to be maintained by the MCO; and
   4. Include a provision that the provider will submit any additional documents or information related to its financial condition to the MCO, if requested by DOH.
2. For any contract involving an MCO sharing risk with an IPA/ACO, the contract must include provisions whereby:
   1. The parties expressly agree to amend or terminate the contract at the direction of DOH (applies to Tier 1, Tier 2 and Tier 3);
   2. The IPA/ACO will submit annual financial statements to the MCO, as well as any additional documents requested by the MCO as necessary to assess the IPA/ACO´s progress towards achieving Medicaid Value Based Payment goals as specified in the Roadmap, and the MCO will notify DOH of any substantial change in the financial condition of the IPA/ACO (applies to Tier 2 and Tier 3); and
   3. The IPA/ACO will submit any additional documents or information related to its financial condition to the MCO, if requested by DOH (applies to Tier 2 and Tier 3); and
   4. The parties agree that all provider contracts will contain a provision prohibiting providers, in the event of a default by the IPA/ACO, from demanding payment from the MCO for any covered services rendered to the MCO´s enrollees for which payment was made by the MCO to the IPA/ACO pursuant to the financial risk sharing agreement (applies to Tier 2 and Tier 3).

1. PHL Article 44: MCOs are licensed under Article 44 of the Public Health Law as entities that assume the obligation to provide or arrange for the provision of Health Care Services to subscribers or enrollees, in exchange for a predetermined payment amount per person per month. By assuming this obligation, MCOs must remain financially responsible for providing or arranging for Health Care Services pursuant to the applicable subscriber and/or Model contracts.
   
   MCOs always retain this statutory obligation and may not transfer or otherwise dispose of their ultimate financial responsibility. MCOs must fulfill their obligation in any event, including the failure of a risk sharing arrangement with an IPA/ACO or health care provider.
2. DOH regulations at 10 NYCRR Part 98: Risk sharing is defined in §98–1.2(kk) as "...the contractual assumption of liability by a health care provider or IPA by means of a capitation arrangement or other mechanism whereby the provider or IPA assumes financial risk from the MCO for the delivery of specified Health Care Services to enrollees of the MCO." Risk sharing is sometimes referred to as accepting financial risk or medical risk or Shared Risk Arrangement.
   
   Section 98–1.11 imposes financial requirements for entities licensed under Article 44 and allows an MCO to share risk with providers.
   
   Section 98–1.5(b)(6)(vii)(e)(1) allows an IPA, incidental to its primary IPA/ACO powers and purposes, to share risk for the provision of Health Care Services with MCOs and to sub–capitate or otherwise compensate providers and IPAs with which it has contracted.
   
   Section 98–1.18(e) prohibits an MCO from entering into a risk sharing arrangement with an IPA without first obtaining approval from DOH or DFS, as applicable, in accordance with these Guidelines and DFS Regulation 164.
   
   10 NYCRR 1003.11(c) states the contract between an ACO and a Managed Care Organization shall be subject to all the requirements and reviews applicable under Article 44 of the Public Health Law and the Insurance Law and regulations promulgated thereunder.
3. DFS Regulation 164: DFS Regulation 164, "Standards for Financial Risk Transfer Between Insurers and Health Care Provider" (11 NYCRR Part 101), requires MCOs to submit to DFS for approval certain prepaid capitation arrangements whereby an insurer transfers all or part of its financial risk to a health care provider. See Section B below.
4. CMS Regulation 42 CFR §422.208 Physician Incentive Plan: requirements and limitations. If applicable, DOH will conduct a separate review in accordance with the Physician Incentive Plan as described in the Standard Clauses §C.4.

Based on the definitions for MCO contracting entities as specified in Section I of these Guidelines, three review tiers are described below.

Note: For additional reference, please see Appendix: Provider Contract Review Process and Appendix: DOH Review Tier Payment Threshold.

1. TIER 1 – File and Use

• DOH will generally only conduct a programmatic review for contracts in this tier as defined below. The programmatic review for contracts under this tier will be abbreviated, but will ensure that certain requirements are met, including, but not limited to, ensuring the mandatory provisions are present and the financial attestations are complete. Generally, DOH and DFS will not conduct a financial review for contracts falling within this tier. DOH reserves the right to review any contract for financial and/or programmatic review.
• Contracts with providers, groups of providers, or an IPA/ACO must meet the following criteria to be considered Tier 1:
  1. projected annual prepaid capitation payment is expected to be less than the DFS submission requirements pursuant to Regulation 164; AND
  2. projected total annual payments at risk made to provider is expected to be less than or equal to $1,000,000;
     OR
  3. projected total annual payments at risk to provider is expected to be more than $1,000,000, but none of the following are true:
     1. for Medicaid Contracts only:
        1. more than 25 percent of the projected total annual payments made to the provider by the MCO submitting the contract across all contracts between that provider and that MCO for Medicaid Managed Care or Medicaid Managed Long Term Care lines of business are at risk;
        2. the provider´s projected payments under this contract consist of more than 15 percent of the provider´s projected overall Medicaid revenue from all payors; OR
        3. an off menu arrangement, as referenced in the Roadmap, not previously approved by DOH.
     2. for Non–Medicaid Contracts only:
        1. more than 25 percent of the projected total annual payments made to the provider under the submitted contract are at risk.

2. TIER 2 – DOH Review

• DOH shall conduct both a financial and a programmatic review for contracting arrangements within this tier, as defined below. DFS will not conduct a financial review for contracts falling within this tier unless DOH requests a review from DFS.
• This tier applies to contracts that transfer financial risk to providers or an IPA/ACO (e.g., capitation) whether for a single specific service or multiple services provided directly by the provider accepting risk for such services. These arrangements must meet the following criteria to be considered Tier 2:
  1. projected annual prepaid capitation payment to provider at risk is expected to be less than or equal to the DFS submission requirement pursuant to Regulation 164; AND
  2. projected total annual payment at risk made to provider is expected to be more than $1,000,000; AND
  3.  
     1. for Medicaid Contracts only at least one of the following is true:
        1. more than 25 percent of the projected total annual payments made to the provider by the MCO submitting the contract across all contracts between that provider and that MCO for Medicaid Managed Care or Medicaid Managed Long Term Care lines of business are at risk;
        2. the provider´s projected payments under this contract consist of more than 15 percent of the provider´s projected overall Medicaid revenue from all payors; OR
        3. an off menu arrangement, as reference in the Roadmap, not previously approved by DOH.
     2. for Non–Medicaid Contracts only:
        1. more than 25 percent of the projected total annual payments made to the providers under the submitted contract are at risk.
  Supporting Documentation for Tier 2:
  Contract submission must include evidence of the providers or IPA/ACO´s financial viability and may require a financial security deposit as described in Section VII. C of these Guidelines.

3. TIER 3 – Multi–Agency Review

• Contracts shall be submitted to DFS in accordance with Regulation 164. DOH may conduct its own financial review, in its sole discretion, but may also defer to DFS as applicable. DOH will conduct a programmatic review for all contracting arrangements within this tier.
• This tier applies to contracts that transfer risk to providers, a group of providers, or IPA/ACOs under prepaid capitation arrangements in any form based on the criteria below. The Multi–Agency Review process will apply to all contracting arrangements where at least one of the following is true:
  1. the provider´s prepaid capitation payments are subject to review per the requirements of Regulation 164; OR
  2. at the request of DOH.

1. Demonstration of Financial Responsibility

• The MCO must provide such information as necessary to allow DOH to determine whether a provider sharing risk is financially stable; capable of assuming such risk; and has satisfactory insurances, reserves, or other arrangements to support the expectation that it will meet its obligations.
• The provider accepting risk must demonstrate sufficient capital and solvency via submission of certified audited financial statements or comparable means, such as an accountant´s compilation in cases where the provider is a new entity. If the contract includes a provision that a provider´s parent organization (such as a hospital system) guarantees the provision and payment of services, the certified audited financial statement of the guaranteeing parent can be used to establish the provider´s solvency.

2. Financial Security Deposit

• If a financial security deposit is required by DOH, the provider must establish and provide evidence of a financial security deposit in the amount of 7.25 percent of the estimated annual medical costs for the Health Care Services covered under the risk arrangement. The financial security deposit must consist of cash and/or short–term marketable securities and must be held by the MCO. The entire amount of the security deposit must be available prior to contract approval.
• DOH will defer to DFS for the amount of the financial security deposit for arrangements that trigger Regulation 164.
• Notwithstanding the above, at the discretion of DOH, the financial security deposit may be mitigated under limited circumstances (e.g., parental guarantee, risk corridors, caps on provider losses, or letter of credit).

3. Out–Of–Network Account

• The estimated part of the payment needed to cover services referred or otherwise arranged by the contracting provider or intermediary to non–participating providers must be deposited by the MCO into a separate account designated as the "out of health care provider network account." This account must be maintained by the MCO for the sole purpose of paying for the services covered by the risk agreement that were rendered by providers outside of the IPA/provider´s network. Amounts deposited in the out–of–IPA/provider network account must be reconciled at least annually with out–of–IPA/provider network incurred claims and expenses for the period covered by the reconciliation, and any excess in the account must be remitted to or otherwise settled with such IPA/provider within six months of the ending date of the reconciliation period. In the event the reconciliation reports a deficit, then the MCO must bill such deficit or otherwise settle such deficit with the IPA/provider within six months of the ending date of the reconciliation period.

4. Requirements for IPA/ACO Risk Sharing

1. The MCO must submit the complete text of the proposed IPA/ACO contract(s) and all attachments thereto.
2. The MCO and the IPA/ACO must demonstrate to the satisfaction of DOH that the proposed arrangement will not constitute improper incentives to providers, in accordance with physician incentive plan guidelines, and will not result in a decrease in access to or quality of care provided to enrollees.

5. Miscellaneous Audits

• DOH and/or the Office of the Medicaid Inspector General (OMIG) will retain the right to conduct sample audits of contracts submitted under these Guidelines during plan survey and as frequently as deemed appropriate.