Massachusetts Risk-Bearing Provider Organization Regulations and Guidance

The Massachusetts Division of Insurance (“DOI”) is seeking final comments to the proposed Risk-Bearing Provider Organization (“RBPO”) regulations (the “Regulation”) and related guidelines (the “Guidelines”).  Comments must be received by the DOI June 23, 2014 at noon.  Any interested party or individual may submit comments for consideration.

The regulations implement requirements on RBPOs set forth in Massachusetts General Laws Chapter 176T, which was enacted by Chapter 224 of the Acts of 2012 or Healthcare Reform 2.0.  The statute requires providers that assume significant downside risk in alternative payment contracts to be certified by the DOI.  The goal is to ensure that the providers are not taking on too much risk that could threaten their existence or ability to pay claims.  In essence, providers are wandering into the insurance realm and, as such, are being treated in a similar manner by the DOI.  The shift in roles by the providers is somewhat unprecedented and may subject providers to requirements that do not necessarily apply to them.

The “final” Regulation contains all of the information necessary for a provider to determine how it can be certified as an RBPO, or seek to obtain a waiver from the RBPO requirements.  On the waiver front, it should be noted that the granting of a waiver is solely within the discretion of the Commissioner of the DOI and not subject to appeal.  Providers should carefully read the Regulation, as applications need to be detailed and provide the DOI a significant amount of insight into a provider.  This means information that is commonly not shared publicly will be given to the DOI and may be open to the public.  However, providers will likely not be able to avoid this process if they wish to participate in alternative payment contracts.  It really does not present any choice because providers will not be able to avoid alternative payment contracts if they wish to succeed in the changing healthcare environment.

The final draft Guidelines are intended to explain some of the requirements contained in the Regulation and answer concerns.  The Guidelines go into greater detail on some of the requirements of a provider’s application to either become certified as an RBPO, or to obtain a waiver.  For example, with regard to applications to be certified as an RBPO, the Guidelines explain when and what materials need to be submitted, as well as providing alternatives as such may be applicable.  For providers seeking a waiver, the Guidelines not only discuss what needs to be in such an application, but also additional materials that should accompany the application.  As such, the Guidelines will likely be one of the only sources of insight into the DOI’s thinking and may be a valuable tool when seeking certification or waiver.

It is suggested that all interested parties review the final draft Regulation and Guidelines and submit comments to the DOI if desired.  This is the last chance, for now, to influence the final form of these documents that will have a material impact on many participants in the healthcare industry.

About Matt Fisher

Matt is the chair of Mirick O'Connell's Health Law Group and a partner in the firm's Business Group. Matt focuses his practice on health law and all areas of corporate transactions. Matt's health law practice includes advising clients with regulatory, fraud, abuse, and compliance issues. With regard to regulatory matters, Matt advises clients to ensure that contracts, agreements and other business arrangements meet both federal and state statutory and regulatory requirements. Matt's regulatory advice focuses on complying with requirements of the Stark Law, Anti-Kickback Statute, fraud and abuse regulations, licensing requirements and HIPAA. Matt also advises clients on compliance policies to develop appropriate monitoring and oversight of operations.
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