Law360, New York (June 15, 2015, 2:37 PM ET)

New Jersey law has created a unique regulatory status for any entity contracting with a health insurance carrier or other type of health plan for the provision of health care services, but which is not itself a licensed provider such as a hospital or physician group or an actual insurer or plan.  Such entities, broadly referred to as Organized Delivery Systems (ODSs), are subject to regulation by the New Jersey Department of Banking and Insurance (DOBI).  An entity which bears financial risk for the provision of services to health plan members is required to be licensed as an ODS, while one which otherwise meets the definition but does not bear risk can seek an exemption from licensure and instead secure "certified" ODS status. Licensed ODSs are highly regulated because they function, in some ways, similarly to insurers, in that they bear financial risk and present similar solvency concerns.

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