On June 8, 2012, HealthyCT, Inc., a Connecticut not-for-profit provider organization sponsored by the Connecticut State Medical Society and the Connecticut State Medical Society-IPA was named, and awarded $75.8 million as a CO-OP loan recipient under Section 1322 of the Patient Protection and Affordable Care Act (PPACA).
Sophisticated provider organizations, like HealthyCT, have shown significant interest in CO-OP formation. These entities are considered strong applicants as they are, according to the Department of Health and Human Services (HHS), "likely to be viable [as CO-OPs] because of their private support, healthcare experience, and business expertise."
The Consumer Operated and Oriented Plan (CO-OP) Program under Section 1322 of the Patient Protection and Affordable Care Act is designed to foster the creation of new consumer-governed, private, nonprofit health insurance issuers, known as CO-OPs, that will offer health plans under the Affordable Insurance Exchanges. HHS hopes that the CO-OP Program will improve the quality and cost of integrated care by creating "a new competitive presence" in the insurance marketplace.
The Final Rule, which was released on Dec. 8, 2011, reflected HHS's effort to further these goals and to ensure the flexibility for and improve the potential viability of the CO-OP Program by making it easier for larger employers to participate, recognizing provider sponsorship in governing the formation and transition boards, and ensuring CO-OPs will be operated by participants who are truly "new" to the market.
For more background on CO-OPs, see the Dec. 8, 2011, July 25, 2011 and August 3, 2011 Barnes & Thornburg LLP Healthcare Department Alerts, " Final Rule for CO-OPs —"A New Competitive Presence" in the Insurance Marketplace," " Regulations Issued for Funding of Regional Insurance Program Under PPACA" and " Healthcare Alert - U.S. Announces Process for $3.8B in CO-OP Funds." Additional information about provider-sponsored CO-OPs and a simplified guide to understanding the program can be found by clicking here.
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