S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        8869--A
                                 I N  A S S E M B L Y
                                      (PREFILED)
                                    January 4, 2012
                                      ___________
       Introduced  by  M.  of  A.  GOTTFRIED  --  read once and referred to the
         Committee on Health -- reported and referred to the Committee on  Ways
         and  Means -- committee discharged, bill amended, ordered reprinted as
         amended and recommitted to said committee
       AN ACT to amend the public health law, in relation to  accountable  care
         organizations
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. Article 29-E of the public health law, as added by  section
    2  66  of  part  H of chapter 59 of the laws of 2011, is amended to read as
    3  follows:
    4                                ARTICLE 29-E
    5           ACCOUNTABLE CARE ORGANIZATIONS [DEMONSTRATION PROGRAM]
    6  Section 2999-n. Accountable care organizations; findings; purpose.
    7          2999-o. Definitions.
    8          2999-p. Establishment of [ACO demonstration program] ACOS.
    9          2999-q. Accountable care organizations; requirements.
   10          2999-r. Other laws.
   11    S 2999-n. Accountable  care  organizations;  findings;  purpose.  [The
   12  legislature  intends  to  test the ability of accountable care organiza-
   13  tions to assume a role in delivering an array of health  care  services,
   14  from  primary  and  preventive care through acute inpatient hospital and
   15  post-hospital care.] The legislature finds that the formation and opera-
   16  tion of accountable care organizations under this article,  and  subject
   17  to appropriate regulation, can be consistent with the purposes of feder-
   18  al  and  state  anti-trust, anti-referral, and other statutes, including
   19  reducing over-utilization and expenditures. The legislature  finds  that
   20  the  development  of  accountable  care organizations under this article
   21  will reduce health care costs, promote effective  allocation  of  health
   22  care  resources,  and  enhance  the  quality and accessibility of health
   23  care. The legislature finds that this article is  necessary  to  promote
   24  the  formation  of accountable care organizations and protect the public
   25  interest and the interests of patients and health care providers.
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD13268-09-2
       A. 8869--A                          2
    1    S 2999-o. Definitions. As used in this article,  the  following  terms
    2  shall  have  the following meanings, unless the context clearly requires
    3  otherwise:
    4    1.  "Accountable  care organization" or "ACO" means an organization of
    5  clinically integrated health care providers certified by the commission-
    6  er under this article.
    7    2. "ACO PARTICIPANT" OR "PARTICIPANT" MEANS  A  HEALTH  CARE  PROVIDER
    8  THAT IS ONE OF THE HEALTH CARE PROVIDERS THAT COMPRISE THE ACO.
    9    3.  Certificate  of authority" or "certificate" means a certificate of
   10  authority issued by the commissioner under this article.
   11    [3.] 4. "CMS" MEANS THE FEDERAL  CENTERS  FOR  MEDICARE  AND  MEDICAID
   12  SERVICES.
   13    5. "CMS REGULATIONS" MEANS APPLICABLE FEDERAL LAWS AND CMS REGULATIONS
   14  AND POLICIES.
   15    6.  "Health  care  provider"  includes but is not limited to an entity
   16  licensed or certified under article twenty-eight or thirty-six  of  this
   17  chapter;  an entity licensed or certified under article sixteen, thirty-
   18  one or thirty-two of the mental hygiene law; or a  health  care  practi-
   19  tioner licensed or certified under title eight of the education law or a
   20  lawful  combination  of  such  health  care  practitioners; and may also
   21  include, to the extent provided by regulation of the commissioner, other
   22  entities that provide  technical  assistance,  information  systems  and
   23  services,  care coordination and other services to health care providers
   24  and patients participating in an ACO.
   25    [4.] 7. "MEDICARE-ONLY ACO" MEANS  AN  ACO  ISSUED  A  CERTIFICATE  OF
   26  AUTHORITY  UNDER SUBDIVISION FOUR OF SECTION TWENTY-NINE HUNDRED NINETY-
   27  NINE-P OF THIS ARTICLE.
   28    8. "Primary care" means the health care  fields  of  family  practice,
   29  general pediatrics, primary care internal medicine, primary care obstet-
   30  rics, or primary care gynecology, without regard to board certification,
   31  provided by a health care provider acting within his, her, or its lawful
   32  scope of practice.
   33    [5.]  9. "Third-party health care payer" has its ordinary meanings and
   34  may include any entities provided for by regulation of the commissioner,
   35  which may include an entity such as a pharmacy benefits manager,  fiscal
   36  administrator,  or administrative services provider that participates in
   37  the administration of a third-party health care payer system.
   38    [6. Any references to the "department of financial services"  and  the
   39  "superintendent of financial services" in this article shall mean, prior
   40  to  October third, two thousand eleven, respectively, the "department of
   41  insurance" and the "superintendent of insurance."]
   42    S 2999-p. Establishment of [ACO demonstration  program]  ACOS.  1.  An
   43  accountable  care  organization:  (a)  is  an organization of clinically
   44  integrated health care providers that work together to provide,  manage,
   45  and  coordinate health care (including primary care) for a defined popu-
   46  lation; with a mechanism for shared governance; the ability  to  negoti-
   47  ate, receive, and distribute payments; and accountability for the quali-
   48  ty,  cost,  and  delivery  of  health  care  to  the  ACO's patients; in
   49  accordance with this article; and (b) has been issued a  certificate  of
   50  authority by the commissioner under this article.
   51    2.  The  commissioner shall establish a [demonstration] program within
   52  the department to [test the ability] PROMOTE AND  REGULATE  THE  USE  of
   53  ACOs  to  deliver  an  array  of health care services for the purpose of
   54  improving the  quality,  coordination  and  accountability  of  services
   55  provided to patients in New York.
       A. 8869--A                          3
    1    3.  The commissioner may issue a certificate of authority to an entity
    2  that meets conditions for ACO certification as set forth in  regulations
    3  [promulgated]  MADE  by the commissioner pursuant to section twenty-nine
    4  hundred ninety-nine-q of this article. The commissioner shall not [issue
    5  more  than  seven  certificates under this article, and shall not] issue
    6  any new certificate under this article after December thirty-first,  two
    7  thousand [fifteen] SIXTEEN.
    8    4.  (A) NOTWITHSTANDING SUBDIVISION THREE OF THIS SECTION, THE COMMIS-
    9  SIONER SHALL ISSUE A CERTIFICATE OF AUTHORITY AS A MEDICARE-ONLY ACO  TO
   10  AN ENTITY AUTHORIZED BY CMS TO BE AN ACCOUNTABLE CARE ORGANIZATION UNDER
   11  THE   MEDICARE   PROGRAM,   UPON   RECEIVING  AN  APPLICATION  TO  BE  A
   12  MEDICARE-ONLY ACO FROM THE ENTITY  DOCUMENTING  ITS  STATUS  UNDER  THIS
   13  SUBDIVISION.  A  CERTIFICATE  OF  AUTHORITY UNDER THIS SUBDIVISION SHALL
   14  ONLY APPLY TO THE MEDICARE-ONLY ACO'S ACTIONS IN  RELATION  TO  MEDICARE
   15  BENEFICIARIES UNDER ITS AUTHORIZATION FROM CMS.
   16    (B) TO THE EXTENT CONSISTENT WITH CMS REGULATIONS, A MEDICARE-ONLY ACO
   17  SHALL BE SUBJECT TO:
   18    (I)  SUBDIVISIONS  ONE,  TWO  AND THREE OF SECTION TWENTY-NINE HUNDRED
   19  NINETY-NINE-R OF THIS ARTICLE, WITHOUT REGARD TO WHETHER THE COMMISSION-
   20  ER HAS MADE REGULATIONS UNDER THIS ARTICLE; AND
   21    (II) OTHER PROVISIONS OF  THIS  ARTICLE  TO  THE  EXTENT  SPECIFICALLY
   22  PROVIDED  BY  THE COMMISSIONER IN REGULATIONS CONSISTENT WITH THIS ARTI-
   23  CLE.
   24    5. The commissioner may limit, suspend, or terminate a certificate  of
   25  authority if an ACO is not operating in accordance with this article.
   26    [5.]  6.  The commissioner is authorized to seek federal approvals and
   27  waivers to implement this article, including but not  limited  to  those
   28  approvals  or  waivers  necessary  to  obtain  federal financial partic-
   29  ipation.
   30    S 2999-q. Accountable care organizations; requirements. 1. The commis-
   31  sioner shall [promulgate] MAKE  regulations  establishing  criteria  for
   32  certificates   of  authority,  quality  standards  for  ACOs,  reporting
   33  requirements and other matters deemed to be appropriate and necessary in
   34  the operation and evaluation of [the demonstration program]  ACOS  UNDER
   35  THIS ARTICLE. In [promulgating] MAKING such regulations, the commission-
   36  er  shall  consult with the superintendent of financial services, health
   37  care providers, third-party health care payers,  advocates  representing
   38  patients,  and  other  appropriate  parties.  SUCH  REGULATIONS SHALL BE
   39  CONSISTENT, TO THE EXTENT PRACTICAL AND CONSISTENT  WITH  THIS  ARTICLE,
   40  WITH  CMS REGULATIONS FOR ACCOUNTABLE CARE ORGANIZATIONS UNDER THE MEDI-
   41  CARE PROGRAM.
   42    2. Such regulations may, and shall as necessary for purposes  of  this
   43  article, address matters including but not limited to:
   44    (a)  The  governance,  leadership  and management structure of the ACO
   45  THAT REASONABLY AND EQUITABLY REPRESENTS THE ACO'S PARTICIPANTS AND  THE
   46  ACO'S  PATIENTS,  including the manner in which clinical and administra-
   47  tive systems and clinical participation will be managed;
   48    (b) Definition of the population proposed to be  served  by  the  ACO,
   49  which  may  include reference to a geographical area and patient charac-
   50  teristics;
   51    (c) The character, competence and fiscal responsibility and  soundness
   52  of an ACO and its principals, if and to the extent deemed appropriate by
   53  the commissioner;
   54    (d)  The  adequacy  of  an  ACO's network of participating health care
   55  providers, including primary care health care providers;
       A. 8869--A                          4
    1    (e) Mechanisms by which an ACO will provide,  manage,  and  coordinate
    2  quality health care for its patients [and provide] INCLUDING WHERE PRAC-
    3  TICABLE  ELEVATING THE SERVICES OF PRIMARY CARE HEALTH CARE PROVIDERS TO
    4  MEET PATIENT-CENTERED MEDICAL HOME STANDARDS, COORDINATING SERVICES  FOR
    5  COMPLEX  HIGH-NEED PATIENTS, AND PROVIDING access to health care provid-
    6  ers that are not participants in the ACO;
    7    (f) Mechanisms by which the ACO shall receive and distribute  payments
    8  to  its participating health care providers, which may include incentive
    9  payments (WHICH MAY INCLUDE MEDICAL HOME  PAYMENTS)  or  mechanisms  for
   10  pooling  payments  received  by participating health care providers from
   11  third-party payers and patients;
   12    (g) Mechanisms and criteria for accepting  health  care  providers  to
   13  participate  in  the  ACO  that  are related to the needs of the patient
   14  population to be served and needs and purposes of the ACO, and  prevent-
   15  ing unreasonable discrimination;
   16    (h)  Mechanisms  for  quality  assurance  and grievance procedures for
   17  patients or health care providers where appropriate, AND PROCEDURES  FOR
   18  REVIEWING AND APPEALING PATIENT CARE DECISIONS;
   19    (i)  Mechanisms  that  promote  evidence-based  health  care,  patient
   20  engagement, coordination of care, electronic health  records,  including
   21  participation  in  health  information  exchanges,  [and] other enabling
   22  technologies  AND  INTEGRATED,  EFFICIENT  AND  EFFECTIVE  HEALTH   CARE
   23  SERVICES;
   24    (j) Performance standards for, and measures to assess, the quality and
   25  utilization of care provided by an ACO;
   26    (k)  Appropriate  requirements for ACOs to promote compliance with the
   27  purposes of this article;
   28    (l) Posting on the department's website information  about  ACOs  that
   29  would be useful to health care providers and patients, INCLUDING SIMILAR
   30  METRICS  AS  THE  COMMISSIONER PUBLISHES FOR OTHER ORGANIZATIONS SUCH AS
   31  MEDICAID MANAGED CARE PROVIDERS UNDER SECTION THREE HUNDRED SIXTY-FOUR-J
   32  OF THE SOCIAL SERVICES LAW AND HEALTH HOMES UNDER SECTION THREE  HUNDRED
   33  SIXTY-FIVE-L OF THE SOCIAL SERVICES LAW;
   34    (m)  Requirements  for  the submission of information and data by ACOs
   35  and their participating and affiliated health care providers  as  neces-
   36  sary  for  the  evaluation of the success of [the demonstration program]
   37  ACOS;
   38    (n) Protection of patient rights as appropriate;
   39    (o) The impact of the establishment and  operation  of  an  ACO  [on],
   40  INCLUDING PROVIDING THAT IT SHALL NOT DIMINISH access to any health care
   41  service FOR THE POPULATION SERVED AND in the area served; and
   42    (p) Establishment of standards, as appropriate, to promote the ability
   43  of an ACO to participate in applicable federal programs for ACOs.
   44    3.  (A)  THE  ACO  SHALL  PROVIDE  FOR MEANINGFUL PARTICIPATION IN THE
   45  COMPOSITION AND CONTROL OF THE ACO'S GOVERNING BODY FOR ACO PARTICIPANTS
   46  OR THEIR DESIGNATED REPRESENTATIVES.
   47    (B) THE ACO GOVERNING BODY SHALL INCLUDE AT LEAST  ONE  REPRESENTATIVE
   48  OF  EACH  OF  THE  FOLLOWING  GROUPS: (I) RECIPIENTS OF MEDICAID, FAMILY
   49  HEALTH PLUS, OR CHILD HEALTH PLUS; (II) PERSONS WITH OTHER HEALTH COVER-
   50  AGE; AND (III) PERSONS WHO DO NOT HAVE HEALTH COVERAGE.  SUCH  REPRESEN-
   51  TATIVES SHALL HAVE NO CONFLICT OF INTEREST WITH THE ACO AND NO IMMEDIATE
   52  FAMILY MEMBER WITH A CONFLICT OF INTEREST WITH THE ACO.
   53    (C)  AT LEAST SEVENTY-FIVE PERCENT CONTROL OF THE ACO'S GOVERNING BODY
   54  SHALL BE HELD BY ACO PARTICIPANTS.
       A. 8869--A                          5
    1    (D) MEMBERS OF THE ACO GOVERNING BODY SHALL HAVE A FIDUCIARY RELATION-
    2  SHIP WITH THE ACO AND SHALL BE SUBJECT TO CONFLICT OF INTEREST  REQUIRE-
    3  MENTS ADOPTED BY THE ACO AND IN REGULATIONS OF THE COMMISSIONER.
    4    (E)  THE ACO'S FINANCES, INCLUDING DIVIDENDS AND OTHER RETURN ON CAPI-
    5  TAL, DEBT STRUCTURE, EXECUTIVE COMPENSATION, AND ACO PARTICIPANT COMPEN-
    6  SATION, SHALL BE ARRANGED AND CONDUCTED TO MAXIMIZE THE  ACHIEVEMENT  OF
    7  THE PURPOSES OF THIS ARTICLE.
    8    4.  (A) AN ACO SHALL USE ITS BEST EFFORTS TO INCLUDE AMONG ITS PARTIC-
    9  IPANTS, ON REASONABLE  TERMS  AND  CONDITIONS,  ANY  FEDERALLY-QUALIFIED
   10  HEALTH  CENTER  THAT  IS WILLING TO BE A PARTICIPANT AND THAT SERVES THE
   11  AREA AND POPULATION SERVED BY THE ACO.
   12    (B) AN ACO MAY SEEK TO FOCUS ON  PROVIDING  HEALTH  CARE  SERVICES  TO
   13  PATIENTS  WITH ONE OR MORE CHRONIC CONDITIONS OR SPECIAL NEEDS. HOWEVER,
   14  AN ACO MAY NOT OTHERWISE, ON THE BASIS OF A PERSON'S  MEDICAL  OR  DEMO-
   15  GRAPHIC  CHARACTERISTICS,  DISCRIMINATE  FOR OR AGAINST OR DISCOURAGE OR
   16  ENCOURAGE ANY PERSON OR PERSON WITH RESPECT TO ENROLLING OR  PARTICIPAT-
   17  ING IN THE ACO.
   18    (C)  AN ACO SHALL NOT, BY INCENTIVES OR OTHERWISE, DISCOURAGE A HEALTH
   19  CARE PROVIDER FROM PROVIDING OR AN  ENROLLEE  OR  PATIENT  FROM  SEEKING
   20  APPROPRIATE HEALTH CARE SERVICES.
   21    (D) AN ACO SHALL NOT DISCRIMINATE AGAINST OR DISADVANTAGE A PATIENT OR
   22  PATIENT'S REPRESENTATIVE FOR THE EXERCISE OF PATIENT AUTONOMY.
   23    (E) AN ACO MAY NOT LIMIT OR RESTRICT BENEFICIARIES TO USE OF PROVIDERS
   24  CONTRACTED  OR AFFILIATED WITH THE ACO. AN ACO MAY NOT REQUIRE A PATIENT
   25  TO OBTAIN THE PRIOR APPROVAL, FROM A PRIMARY CARE GATEKEEPER  OR  OTHER-
   26  WISE,  BEFORE  UTILIZING THE SERVICES OF OTHER PROVIDERS. AN ACO MAY NOT
   27  MAKE ADVERSE DETERMINATIONS AS DEFINED IN  ARTICLE  FORTY-NINE  OF  THIS
   28  CHAPTER.
   29    5.    AN  ACO  MAY  PROVIDE  CARE  COORDINATION  FOR ITS PARTICIPATING
   30  PATIENTS, WHICH (A) SHALL INCLUDE BUT NOT BE LIMITED TO MANAGING, REFER-
   31  RING TO, LOCATING, COORDINATING, AND MONITORING HEALTH CARE SERVICES FOR
   32  THE MEMBER TO ASSURE THAT ALL MEDICALLY NECESSARY HEALTH  CARE  SERVICES
   33  ARE MADE AVAILABLE TO AND ARE EFFECTIVELY USED BY THE MEMBER IN A TIMELY
   34  MANNER,  CONSISTENT  WITH PATIENT AUTONOMY; AND (B) IS NOT A REQUIREMENT
   35  FOR PRIOR AUTHORIZATION FOR HEALTH CARE SERVICES, AND REFERRAL SHALL NOT
   36  BE REQUIRED FOR A MEMBER TO RECEIVE A HEALTH CARE SERVICE.
   37    6. (a) Subject to regulations of the  commissioner:  (i)  an  ACO  may
   38  enter  into arrangements with one or more third-party health care payers
   39  to establish payment methodologies for  health  care  services  for  the
   40  third-party  health  care  payer's  enrollees provided by the ACO or for
   41  which the ACO is responsible, such as  full  or  partial  capitation  or
   42  other arrangements; (ii) such arrangements may include provision for the
   43  ACO to receive and distribute payments to the ACO's participating health
   44  care  providers,  including  incentive  payments and payments for health
   45  care services from third-party health  care  payers  and  patients;  and
   46  (iii)  an  ACO  may  include mechanisms for pooling payments received by
   47  participating  health  care  providers  from  third-party   payers   and
   48  patients.
   49    (b)  Subject  to regulations of the commissioner, the commissioner, in
   50  consultation with the superintendent of financial services, may  author-
   51  ize  a third-party health care payer to participate in payment methodol-
   52  ogies with an ACO under this subdivision, notwithstanding  any  contrary
   53  provision  of  this chapter, the insurance law, the social services law,
   54  or the elder law, on finding that the payment methodology is  consistent
   55  with the purposes of this article.
       A. 8869--A                          6
    1    [4.]  (C)  AN ACO MAY CONTRACT WITH A THIRD-PARTY HEALTH CARE PAYER TO
    2  SERVE AS ALL OR PART OF THE THIRD-PARTY  HEALTH  CARE  PAYER'S  PROVIDER
    3  NETWORK  OR CARE COORDINATION AGENT, PROVIDED IN THAT CASE THE ACO SHALL
    4  BE SUBJECT TO ALL PROVISIONS OF THIS CHAPTER OR THE INSURANCE LAW  WHICH
    5  ARE  APPLICABLE  TO  THE PROVIDER NETWORK OF THE THIRD-PARTY HEALTH CARE
    6  PAYER.
    7    7. The provision of health care services directly or indirectly by  an
    8  ACO  through  health care providers shall not be considered the practice
    9  of a profession under title eight of the education law by the ACO.
   10    S 2999-r. Other laws. 1. (a) It is the policy of the state  to  permit
   11  and  encourage  cooperative,  collaborative and integrative arrangements
   12  among third-party health care payers and health care providers who might
   13  otherwise be competitors under the active supervision of the commission-
   14  er. To the extent that it is necessary to  accomplish  the  purposes  of
   15  this  article,  competition  may be supplanted and the state may provide
   16  state action immunity under state and federal antitrust laws  to  payors
   17  and health care providers.
   18    (b)  The  commissioner  [may]  SHALL  engage  in  state supervision to
   19  promote state action immunity under state and federal antitrust laws and
   20  may inspect, require, or request additional documentation and take other
   21  actions under this article to verify and make sure that this article  is
   22  implemented in accordance with its intent and purpose.
   23    2.  With  respect  to  the  planning, implementation, and operation of
   24  ACOs, the commissioner, by regulation, [may] SHALL specifically  deline-
   25  ate  safe harbors that exempt ACOs from the application of the following
   26  statutes:
   27    (a) article  twenty-two  of  the  general  business  law  relating  to
   28  arrangements and agreements in restraint of trade;
   29    (b)  article one hundred thirty-one-A of the education law relating to
   30  fee-splitting arrangements; and
   31    (c) title two-D of article two of this chapter relating to health care
   32  practitioner referrals.
   33    3. For the purposes of this article, an ACO shall be deemed  to  be  a
   34  hospital  for  purposes of sections twenty-eight hundred five-j, twenty-
   35  eight hundred  five-k,  twenty-eight  hundred  five-l  and  twenty-eight
   36  hundred  five-m  of  this  chapter  and  subdivisions  three and five of
   37  section sixty-five hundred twenty-seven of the education law.
   38    4.  THE COMMISSIONER IS AUTHORIZED TO SEEK FEDERAL GRANTS,  APPROVALS,
   39  AND  WAIVERS  TO  IMPLEMENT  THIS  ARTICLE,  INCLUDING FEDERAL FINANCIAL
   40  PARTICIPATION UNDER  PUBLIC  HEALTH  COVERAGE.  THE  COMMISSIONER  SHALL
   41  PROVIDE  COPIES  OF  APPLICATIONS AND OTHER DOCUMENTS, INCLUDING DRAFTS,
   42  SUBMITTED  TO  THE  FEDERAL  GOVERNMENT  SEEKING  SUCH  FEDERAL  GRANTS,
   43  APPROVALS,  AND  WAIVERS  TO THE CHAIRS OF THE SENATE FINANCE COMMITTEE,
   44  THE ASSEMBLY WAYS AND MEANS  COMMITTEE,  AND  THE  SENATE  AND  ASSEMBLY
   45  HEALTH  COMMITTEES  SIMULTANEOUSLY  WITH THEIR SUBMISSION TO THE FEDERAL
   46  GOVERNMENT.
   47    5. THE COMMISSIONER MAY DIRECTLY, OR BY CONTRACT  WITH  NOT-FOR-PROFIT
   48  ORGANIZATIONS, PROVIDE:
   49    (A)  CONSUMER  ASSISTANCE  TO  PATIENTS SERVED BY AN ACO AS TO MATTERS
   50  RELATING TO ACOS;
   51    (B) TECHNICAL AND OTHER ASSISTANCE TO HEALTH  CARE  PROVIDERS  PARTIC-
   52  IPATING IN AN ACO AS TO MATTERS RELATING TO THE ACO;
   53    (C)  ASSISTANCE  TO  ACOS TO PROMOTE THEIR FORMATION AND IMPROVE THEIR
   54  OPERATION, INCLUDING ASSISTANCE UNDER SECTION TWENTY-EIGHT HUNDRED EIGH-
   55  TEEN OF THIS CHAPTER; AND
       A. 8869--A                          7
    1    (D) INFORMATION SHARING AND OTHER ASSISTANCE AMONG ACOS TO IMPROVE THE
    2  OPERATION OF ACOS.
    3    S 2. The commissioner of health shall convene a workgroup to develop a
    4  proposal  whereby an ACO may serve, in place of a managed care plan: (a)
    5  Medicaid enrollees otherwise required to participate  in  managed  care,
    6  care  management, or care coordination under section 364-j of the social
    7  services law, section 4403-f of the public health law, or other law; and
    8  (b) enrollees in family health plus  under  section  369-ee  or  section
    9  369-ff  of  the  social services law and the child health insurance plan
   10  under title 1-A of article 25 of the public health  law.  The  workgroup
   11  shall  include,  but  not be limited to, representatives of: accountable
   12  care organizations or entities  seeking  to  form  an  accountable  care
   13  organization  under  article  29-E of the public health law; health care
   14  providers serving Medicaid enrollees; Medicaid, family health plus,  and
   15  child  health insurance plan enrollees; and the senate and the assembly.
   16  The workgroup shall report its recommendations for regulatory or  statu-
   17  tory actions to the governor, the commissioner of health, and the legis-
   18  lature.
   19    S  3. Section 2818 of the public health law is amended by adding a new
   20  subdivision 7 to read as follows:
   21    7. NOTWITHSTANDING SUBDIVISIONS ONE AND TWO OF THIS SECTION,  SECTIONS
   22  ONE HUNDRED TWELVE AND ONE HUNDRED SIXTY-THREE OF THE STATE FINANCE LAW,
   23  OR  ANY  OTHER INCONSISTENT PROVISION OF LAW, OF THE FUNDS AVAILABLE FOR
   24  EXPENDITURE PURSUANT TO THIS SECTION, THE COMMISSIONER MAY ALLOCATE  AND
   25  DISTRIBUTE,  WITHOUT  A COMPETITIVE BID OR REQUEST FOR PROPOSAL PROCESS,
   26  GRANTS TO ACCOUNTABLE CARE ORGANIZATIONS UNDER ARTICLE TWENTY-NINE-E  OF
   27  THIS  CHAPTER FOR THE PURPOSE OF PROMOTING THEIR FORMATION AND IMPROVING
   28  THEIR OPERATION.   CONSIDERATION RELIED  UPON  BY  THE  COMMISSIONER  IN
   29  DETERMINING  THE  ALLOCATION  AND  DISTRIBUTION  OF  THESE  FUNDS  SHALL
   30  INCLUDE, BUT NOT BE LIMITED  TO,  THE  NEED  FOR  AND  CAPACITY  OF  THE
   31  ACCOUNTABLE  CARE  ORGANIZATION  TO  ACCOMPLISH  THE PURPOSES OF ARTICLE
   32  TWENTY-NINE-E OF THIS CHAPTER IN THE AREA TO BE SERVED.
   33    S 4. This act shall take effect immediately.