On November 20, 2012, acting upon a mandate in the Massachusetts health care payment reform law, Ch. 224 of the Acts of 2012, the Massachusetts Division of Insurance (DOI) published a bulletin containing transitional rules for the certification of risk-bearing provider organizations (RBPOs).  Chapter 176T of the Massachusetts General Laws, created by the payment reform law to regulate RBPOs, requires “provider organizations” that have entered into payor contracts involving downside financial risk to obtain a certificate of solvency from the DOI.  The purpose of the certification is to require RBPOs to demonstrate on an annual basis that they do not assume excessive financial risk that could threaten their financial solvency.

The new legislation defines “provider organization” as any corporation, partnership, business trust, association or group of persons in the business of health care delivery or management that represent one or more health care providers in contracting with carriers for payment of health care services.  M.G.L. ch. 176T, § 1.  This bulletin affects all organized groups of providers, including physician organizations, physician-hospital organizations, independent practice associations, provider networks and accountable care organizations, that receive or will receive payment for health care services through risk-based contracting relationships with payors.

Under the bulletin, the period from November 4, 2012, through December 31, 2013, is a transition period with regard to certification of RBPOs.  In order to enter into and continue to participate in risk-based payor contracts during the transition period, RBPOs must apply for and receive a transition period waiver under tight deadlines, more fully described in the table below.  The DOI will issue regulations during the transition period regarding certification of RBPOs after expiration of the transition period.  The DOI advises that all applications should be submitted electronically to the DOI at DOIrbpo@state.ma.us.

Click here to view table.