Review Article

Redesigning the Regulatory Framework

for Ambulatory Care Services in New York
D AV E A . C H O K S H I , ∗,† J O H N R U G G E , ‡
a n d N I R AV R . S H A H §
∗
New York City Health and Hospitals Corporation; † New York University
Langone Medical Center; ‡ Hudson Headwaters Health Network; § Kaiser
Permanente

Policy Points:
r The landscape of ambulatory care services in the United States is
rapidly changing on account of payment reform, primary care trans-
formation, and the rise of convenient care options such as retail clinics.
r New York State has undertaken a redesign of regulatory policy for
ambulatory care rooted in the Triple Aim (better health, higher-
quality care, lower costs)—with a particular emphasis on continuity
of care for patients.
r Key tenets of the regulatory approach include defining and tracking
the taxonomy of ambulatory care services as well as ensuring that
convenient care options do not erode continuity of care for patients.

Context: While hospitals remain important centers of gravity in the health

system, services are increasingly being delivered through ambulatory care. This
shift to ambulatory care is giving rise to new delivery structures, such as re-
tail clinics and urgent care centers, as well as reinventing existing ambulatory
care capacity, as seen with the patient-centered medical home model and the
movement toward team-based care. To protect the public’s interests, oversight
of ambulatory care services must keep pace with these rapid changes. With this
purpose, in January 2013 the New York Public Health and Health Planning
Council undertook a redesign of the regulatory framework for the state’s am-
bulatory care services. This article describes the principles undergirding the
framework as well as the regulatory recommendations themselves.

Methods: We explored and analyzed the regulation of ambulatory care services

in New York in accordance with the available gray and peer-reviewed literature
The Milbank Quarterly, Vol. 92, No. 4, 2014 (pp. 776-795)

c 2014 Milbank Memorial Fund. Published by Wiley Periodicals Inc.

776
Redesigning an Ambulatory Care Regulatory Framework 777

and legislative documents. The deliberations of the Public Health and Health
Planning Council informed our review.
Findings: The vision of high-performing ambulatory care should be rooted
in the Triple Aim (better health, higher-quality care, lower costs), with a
particular emphasis on continuity of care for patients. There is a pressing need
to better define the taxonomy of ambulatory care services. From the state
government’s perspective, this clarification requires better reporting from new
health care entities (eg, retail clinics), connections with regional and state
health information technology hubs, and coordination among state agencies.
A uniform nomenclature also would improve consumers’ understanding of
rights and responsibilities. Finally, the regulatory mechanisms employed—
from mandatory reporting to licensure to regional planning to the certificate of
need—should remain flexible and match the degree of consensus regarding the
appropriate regulatory path.
Conclusions: Few other states have embarked on a wide-ranging assessment of
their regulation of ambulatory care services. By moving toward adopting the
regulatory approach described here, New York aims to balance sound oversight
with pluralism and innovation in health care delivery.
Keywords: health policy, ambulatory care, primary care, regulation.

T
he health care system in the United States is
undergoing seismic shifts in insurance coverage, payment mech-
anisms, and modes of delivery—all at once. In 2014, millions
of uninsured Americans will receive health coverage from both the ex-
pansion of Medicaid and the health insurance marketplaces created by
the Affordable Care Act (ACA). Both government and private payers
are driving this transformation from volume-based reimbursement to
value-based purchasing through bundled payments, global budget con-
tracts, accountable care organizations, and other new payment models.
And perhaps most important, the actual structures of the health care
delivery system are changing. That is, while hospitals remain important
centers of gravity in the health system, services are increasingly being
delivered through ambulatory care.
The ambulatory care system also is being affected by the changes tak-
ing place among practicing physicians. In New York State, the stresses
of the current environment are causing many private practitioners to
778 D.A. Chokshi, J. Rugge, and N.R. Shah

turn for employment to institutional providers, especially hospitals. At

the same time, hospitals are moving from identifying themselves solely
as acute-care facilities to comprehensive systems of care extending into
the community.
In addition, many physicians are joining large, multispecialty groups
offering a broad spectrum of services, often in multiple locations, thereby
gaining sufficient market power to compete with area hospitals. This
shift to ambulatory care is giving rise to new delivery structures, such as
retail clinics and urgent care centers, as well as reinventing ambulatory
care capacity, such as the patient-centered medical home model and
the movement toward team-based care. To protect the interests of the
public—that is, promote patient safety, quality, and judicious use of
resources—the oversight of ambulatory care services must keep pace
with these rapid changes.

Regulation of Ambulatory Care

Services: The Charge
In 2011, New York Governor Andrew Cuomo, seeing an opportunity
for both quality improvement and cost savings, undertook a fundamen-
tal reform of the state’s largest single program, Medicaid, through his
Medicaid Redesign Team. In January 2012, the New York Department
of Health charged the Public Health and Health Planning Council
(PHHPC) with developing a health planning framework that would
improve the health system, affecting both private and public providers
and payers. The PHHPC’s December 2012 report, titled Redesigning
Certificate of Need and Health Planning, examined changes in the orga-
nization of health care and tried to align the certificate of need (CON)
and health-planning processes with these changes. The PHHPC recom-
mended that regional, multistakeholder collaboratives conduct delib-
erations on health planning. Accordingly, by recommending retaining
licensure requirements but eliminating need assessments for primary
care facilities, it anticipated the expansion of capacity needed for the up
to 1 million New Yorkers who would gain coverage under the ACA.
Additional recommendations dealt with requiring regulatory oversight
of physician practices, modifying the process of establishing new health
care facility and home care agency operators, strengthening the review of
Redesigning an Ambulatory Care Regulatory Framework 779

health system governance, supporting expanded access to hospice care,

and incorporating quality and population health factors into the CON
review. The December 2012 PHHPC report also laid the groundwork
for strategically aligning regulatory oversight with new models of health
care organization and payment.
In January 2013, the former New York commissioner of health (one
of this article’s authors, Nirav R. Shah) offered a new charge to the
PHHPC—to address the changing structure of the delivery system
itself. Through extensive consultation and deliberation, the PHHPC
built the framework for public oversight of ambulatory care services,
represented by a set of recommendations formally adopted by the
PHHPC in January 2014. A subset of recommendations would require
authorizing legislation not yet passed by the New York State legislature.
Other recommendations, which require only regulatory authorization,
have entered into the rule-making process (for a summary of regulatory
recommendations, see Table 1; full recommendations are available on-
line at http://www.health.ny.gov/facilities/public_health_and_health_
planning_council/meetings/2014-01-07/docs/ambulatory_care_
services_recommendations.pdf).
Three principles guided the PHHPC’s work. First, the vision of high-
performing ambulatory care should be rooted in the Triple Aim (better
health, higher-quality care, lower costs), with a particular emphasis on
continuity of care for patients, as we describe later. Second, there is a
need to better define the taxonomy of ambulatory care services. From
the state government’s perspective, clarification requires better report-
ing from the new health care entities (eg, retail clinics); connections
with regional and state health information technology hubs; and coordi-
nation among state agencies, including the Department of Health, the
Department of Mental Hygiene, the Department of Financial Services,
and the new Health Plan Marketplace. A uniform nomenclature would
also facilitate consumers’ understanding of rights and responsibilities.
Third, the regulatory mechanisms employed—from mandatory report-
ing to licensure to regional planning to CON—should remain flexible
and match the degree of consensus regarding the appropriate regulatory
path. For areas where there is considerable uncertainty about the con-
sequences of any new regulation, incremental steps—often beginning
with reporting requirements—would help shed light on a prudent way
forward.
780 D.A. Chokshi, J. Rugge, and N.R. Shah

Table 1. Regulatory Recommendations From the New York Public

Health and Health Planning Council
Ambulatory Care
Setting Summary of Regulatory Recommendations
Retail clinics • Allow corporations to provide professional
services that are currently prohibited.
Private physician offices are not precluded
from providing professional services in a
retail setting.
• Retail clinics will be known as “limited
services clinics.” Must use the term “limited
services clinic” in their name at all sites and
in materials in order to help consumer
recognition of this model of care.
• Define scope of services to cover basic
services, including certain immunizations.
Prohibit the following:
• Prescription of controlled substances or
conduct of any laboratory testing except
for Clinical Laboratory Improvement
Amendments–waived tests.
• Services to patients 24 months of age or
younger.
• Childhood immunizations to patients
under 18 years of age (excluding
influenza vaccine and human papilloma
vaccine [HPV]).
• Secure third-party accreditation by a
national accreditation organization
approved by the Department of Health.
• Require disclosures to consumers, including
signage for consumers regarding services
that are and are not offered and disclosures
that prescriptions and over-the-counter
medication are not required to be purchased
on-site.
• Procedures that support the medical home
must be followed. A list of primary care
providers accepting new patients must be
provided to patients indicating that they do
not have a primary care provider and
encouraging the patient to establish a
relationship with a provider.
Continued
Redesigning an Ambulatory Care Regulatory Framework 781

Table 1. Continued
Ambulatory Care
Setting Summary of Regulatory Recommendations
• Require health information technology
connections to the larger health care
delivery system through electronic health
records and other means.
Urgent care providers • Require private physician offices and
institutional providers (as defined by Article
28 of New York Public Health Law) to
apply to the Department of Health to use
the name “urgent care.” Only approved
providers may use the term “urgent care” in
their name.
• To be approved, private physician offices and
Article 28 providers need to be accredited
by a national organization approved by the
Department of Health and to offer required
minimum services.
• Urgent care providers cannot use the word
“emergency” or its equivalent in their
names.
• Requirements related to disclosures to
consumers, support of the medical home,
and health information technology also
apply (see Retail clinics).
Freestanding emergency • Referred to as “hospital-sponsored
departments off-campus emergency department (ED)” in
regulation, but name given to the public
will be the name of the hospital that owns
the facility and “satellite emergency
department.”
• Restrict off-campus ED ownership to
hospitals and prohibit non-hospital-owned
off-campus EDs.
• Subject to the same standards and
requirements as a hospital-based ED and
must demonstrate compliance with Centers
for Medicare and Medicaid Services hospital
condition of participation.
• Hours of operation will generally be 24/7,
but part-time operation will be allowed.
• Need and approval methodology will be
developed.
Continued
782 D.A. Chokshi, J. Rugge, and N.R. Shah

Table 1. Continued
Ambulatory Care
Setting Summary of Regulatory Recommendations
• Requirements related to disclosures to
consumers, support of the medical home,
and health information technology also
apply.
Office-based surgery • Require all physician and podiatry practices
(OBS) / office-based performing procedures (including
anesthesia (OBA) noninvasive procedures) utilizing more than
practices minimal sedation to become accredited and
file adverse-event reports.
• Limit both procedural time to 6 hours and
postprocedure time to discharge to 6 hours.
• Require registration with the Department of
Health of all new and existing practices
performing procedures with minimal
sedation.
• Require submission of practice, procedure,
and quality data as determined by the
department.
• Require accrediting agencies to share with
the department the outcomes of surveys and
complaint/referral investigations and other
requested information.
• Require accrediting agencies to survey
OBS/OBA practices and carry out
complaint/incident investigations at the
department’s request.
Upgraded diagnostic • Eliminate upgraded diagnostic and
and treatment centers treatment centers (UD&TCs) from statute
and regulation. UD&TCs were developed to
provide an alternative for communities that
need health care services, including limited
emergency care, but are not able to support
a hospital. There is now no need for this
model given the development of new
models of care, including urgent care and
hospital-based off-campus emergency
departments.
Redesigning an Ambulatory Care Regulatory Framework 783

The Triple Aim

The principles guiding the Affordable Care Act and the Medicaid Re-
design Team’s initiatives—the Triple Aim—remain a useful polestar for
the changing health care services landscape, offering both a yardstick for
what has been accomplished and a set of aspirations for the future.1

Population Health
Ambulatory care should help shift the locus of health care from facilities
to communities, with a concomitant focus on long, healthy lives for
all (operationalized as health-adjusted life expectancy) as the metric of
interest. This approach adopts a comprehensive notion of health deter-
minants spread across domains of behavioral risk, social and economic
circumstances, environmental exposures, and medical care.2 The balance
and effects of many of these determinants—for example, the availabil-
ity of healthy foods, parks and other safe places to play and exercise,
exposure to environmental irritants, and safe housing—are specific to
geographic locale. Several key provisions of the ACA highlight pop-
ulation health, such as the Internal Revenue Service requirements for
tax-exempt hospitals to demonstrate meaningful efforts to improve the
health of the communities they serve.3 In New York, the State Prevention
Agenda (also known as the State Health Improvement Plan) includes
evidence-based practices for improving population health in each of 5
priority areas and provides guidance for local stakeholders in assessing
and improving community health and reducing health disparities. New
York State generally ranks in the second quartile on measures of healthy
living collated by the Commonwealth Fund and the United Health
Foundation.4,5 Improving population health will require the full partic-
ipation of ambulatory care providers in the State Prevention Agenda.

Health Care Quality

New York has made progress in improving the quality of health care.
For example, in the Medicaid program, the National Committee for
Quality Assurance (NCQA) commended the state’s performance in in-
creasing rates of childhood immunization, controlling blood pressure as
part of diabetes management, screening for colorectal cancer, and assist-
ing with smoking cessation.6 New York’s 1115 Medicaid waiver could
help make even more progress. Yet health care quality improvement
784 D.A. Chokshi, J. Rugge, and N.R. Shah

efforts have not yet embraced the full spectrum of ambulatory care. The
majority of outpatient quality measures focus on preventive care, chronic
disease care, and patient experience, which, albeit important, leave out
equally important measures such as diagnostic accuracy, appropriateness
of testing, and rates of medication errors.7 Therefore, efforts to improve
ambulatory care must optimize quality metrics as well as refine the
methods of measurement.

Costs of Care
New York has traditionally performed poorly on evaluations of health
care efficiency, scoring 50th among all states on avoidable hospital use
and costs in the 2009 Commonwealth Fund state scorecard.4 Again,
Medicaid has been a bright spot, with reforms proposed by the Medi-
caid Redesign Team thus far saving between $5 billion and $10 billion.
Still more can be done, though, particularly with the Medicare and
commercially insured populations. A recent study by the Institute of
Medicine of geographic variation in US health care spending identified
2 major cost drivers, both of which affect the organization of ambulatory
care. Most of the variation in spending per beneficiary in the Medicare
population was in postacute care (services provided by skilled nursing
facilities, rehabilitation and long-term care hospitals, home health agen-
cies, and hospices).8 In the commercially insured population, postacute
care was only a minor contributor to the variation in spending. Instead,
price variation was the predominant factor, accounting for about 70%
of the total expenditure variation.9 In both cases, postacute care varia-
tion and price variation, careful regulation to help shape the ambulatory
care market could make the broader health care system more efficient.
As another cross-cutting strategy, redirecting inappropriate visits from
emergency departments to other ambulatory care services would reduce
costs through lower service charges, fewer imaging and other tests, and
less likely admission to the inpatient unit. Per capita spending, with a
particular focus on high-cost individuals, must remain one of the Triple
Aim’s fundamental metrics of interest.
Another principle, continuity of care, is as important as those of the
Triple Aim when considering ambulatory services. Continuity of care
is a “Triple Aim home run,” as it helps bring about better health,
improves health care quality, and lowers costs.10 While some patients,
particularly younger patients with acute illnesses, may prefer better
access over greater continuity, many more prefer continuity of care,
Redesigning an Ambulatory Care Regulatory Framework 785

particularly older patients or those with multiple chronic conditions,

that is, those patients who are most vulnerable to serious illness and
whose care incurs the highest costs. For these people especially, their
continuing relationship with a caring professional provides the needed
context for shared decision making and responsibility to maintain and
improve their health. A growing corpus of evidence demonstrates the
systemic effects of continuity of care. For example, a study of more
than 3 million Medicare beneficiaries showed an inverse effect between
primary care continuity and preventable hospitalizations.11 To the extent
that new models of ambulatory care disrupt continuity of care, they may
have negative implications for cost, quality, and health. Accordingly, the
first step in resolving this may be for primary care practices to begin
measuring their patients’ continuity of care.

A Foundation of High-Performing
Primary Care
A simple premise led to a breakthrough in deliberations on regulatory
recommendations: High-quality ambulatory care depends on excellent
primary care. Therefore, new models of care must not erode—but should
bolster—high-quality primary care.12 New York must both improve and
extend primary care to accommodate the million New Yorkers who will
gain coverage via the Affordable Care Act. Because the new models
of ambulatory care may blur the boundaries of primary care, it was
useful to base our discussions on the Institute of Medicine’s definition of
primary care: “The provision of integrated, accessible health care services
by clinicians who are accountable for addressing a large majority of
health care needs, developing a sustained partnership with patients, and
practicing in the context of family and community.”13 While superlative
models of primary care are dependent on the particular community, they
all share a few main elements.

Patient-Centered Medical Home Model With

Team-Based Care Delivery
The Joint Principles of the Patient-Centered Medical Home, adopted in
2007 by the American Academy of Pediatrics, the American College of
Physicians, the American Academy of Family Physicians, and the Amer-
ican Osteopathic Association, and subsequently endorsed by dozens of
786 D.A. Chokshi, J. Rugge, and N.R. Shah

specialty societies, describe the importance of each patient having “an

ongoing relationship with a personal physician trained to provide first
contact, continuous and comprehensive care. . . . [T]he personal physi-
cian leads a team of individuals at the practice level who collectively
take responsibility for the ongoing care of patients.”14 The American
College of Physicians (ACP) recently defined team-based care further in
a position paper: “A clinical care team for a given patient consists of the
health professionals—physicians, advanced practice registered nurses,
other registered nurses, physician assistants, clinical pharmacists, and
other health care professionals—with the training and skills needed to
provide high-quality, coordinated care specific to the patient’s clinical
needs and circumstances.”15 Importantly, the ACP’s position paper also
advocates a cooperative, interprofessional approach to coping with the
looming shortage of physicians.

Population Health Management With

Sophisticated Risk Stratification
Taking responsibility for population health in primary care requires man-
aging the health outcomes of a group of individuals, often organized into
patient panels. This perspective centers on deploying evidence-based in-
terventions matched to patient care management categories in order to
allocate health care resources in a cost-effective manner. The US De-
partment of Veterans Affairs, for example, risk-stratifies populations of
patients and tailors interventions to specific risks. Based on longitudinal
electronic health records (EHRs) covering up to 2 decades, a care assess-
ment need (CAN) score, a statistical model, predicts a patient’s risk of
hospitalization or death at 90 days or 1 year with high reliability and
validity.16 The CAN score therefore stratifies patients who are at greatest
risk for major adverse outcomes, enabling enhanced care management
services to be directed to those veterans.

High-Risk Patient Management

As popularized by Atul Gawande’s New Yorker article,17 “The Hot Spot-
ters,” another Triple Aim home run could be addressing the needs of
the sickest and most vulnerable patients. Nationally, just 10% of the
population is estimated to account for about 64% of health care ex-
penditures, often because of overutilization of the hospital, emergency
Redesigning an Ambulatory Care Regulatory Framework 787

room, and other acute-care resources.18 Addressing care coordination,

targeting intensive interventions, and ensuring greater access would
enable this segment of the population to benefit from better health and
would reduce costs. Many primary care practices are now testing high-
risk patient management, in either an “ambulatory intensive care unit”
or another designation. Preliminary evidence from programs for high-
risk elderly patients shows modest reductions in hospital and emergency
department utilization, although how generalizable these findings are
to a broader (nonelderly) high-risk population is not clear.19

Rapid but Judicious Access to Specialty Expertise

The market for specialty services is different from different vantage
points. For private providers who take care of affluent, generally commer-
cially insured patients, the problem may be the supply-driven overuse
of expensive specialty resources. Meanwhile, the supply and demand for
specialty services are greatly mismatched for patients and providers in
safety-net systems, leading to long wait times and delays in care. Inno-
vations in accessing specialty expertise may help both sides of the issue
by improving the value of specialty care while distributing its reach.
For instance, in San Francisco, a program known as eReferral—piloted
in a safety-net system—uses simple technology to allow for expeditious,
iterative communication between primary care providers and specialists,
which sometimes eliminates the need for in-person consultation.20 Sim-
ilarly, a national program known as Project ECHO has shown that with
the right staffing and technology infrastructure, primary care providers
and specialists can comanage patients with complex, chronic diseases
like hepatitis C.21

Integrated Behavioral Health

Individuals with serious physical health problems often have concomi-
tant mental health issues, and nearly half of those with any mental
disorder meet the criteria for 2 or more disorders.22 New York has been
a leader in incorporating behavioral health services into primary care,
particularly through Medicaid Health Homes. More broadly, however,
most primary care doctors are ill-equipped, lack the time, or are not re-
imbursed in a manner that allows them to fully address the psychosocial
788 D.A. Chokshi, J. Rugge, and N.R. Shah

issues underlying many patients’ visits. In some cases, patients do not

have access to dedicated behavioral health professionals, and rarely are
physical health and behavioral health providers colocated to enable
“warm handoffs” between them, although models for integrated or col-
laborative behavioral health and primary care are emerging.23 In one
example, the Southcentral Foundation’s Nuka System of Care in Alaska,
behavioral health has become a routine component of medical care, with
integrated charts, care teams, and clinic design facilitating collaboration,
from informal consultation to joint visits to more formal referrals.24
Together, these components of high-performing primary care provide
a foundation for delivering on the Triple Aim and enshrining continuity
of care as a central goal of the larger ambulatory care enterprise.

Innovations in Convenient
Ambulatory Care
Across the United States, patients visit health care providers about
50 million times annually for low-acuity conditions such as sinusitis and
urinary tract infections.25 Some of these visits take place in emergency
departments, though it is sometimes difficult to distinguish between
low-acuity and urgent conditions a priori, and such visits can also reflect
poor access to primary care rather than patients’ poor judgment.26,27
Indeed, there might have been many more than 50 million annual visits
if primary care appointments had shorter wait times, and the expansion
of the Affordable Care Act’s coverage may make wait times even longer
rather than shorter. Partly in response to these demands, new ambulatory
options, such as retail clinics (eg, CVS Caremark’s MinuteClinic) and
urgent care centers, have expanded rapidly in recent years. For example,
between 2007 and 2009, the number of visits to retail clinics increased
nationally fourfold and by 2012 were estimated to account for almost
6 million annual visits.28 In rural areas, concerns about insufficient emer-
gency care capacity have led to the promulgation of upgraded diagnostic
and treatment centers (with limited emergency care capabilities) and the
establishment of freestanding emergency departments.
The benefits of these convenient ambulatory care options remain con-
jectural, although the greater access and low-overhead cost structure
intuitively seem to be an improvement. The risks of these options in-
clude less continuity of care and more fragmentation. While the care
provided may be less expensive for each visit, better access may lead to
Redesigning an Ambulatory Care Regulatory Framework 789

more patients seeking care, thereby increasing overall utilization and

spending. Access also may be heavily weighted toward more affluent pa-
tients depending on payment sources accepted. For example, only about
60% of retail clinics in the United States accept Medicaid, and usually
only in a limited form.29 Finally, the reallocation of private revenue to
convenient care options could threaten the viability of much needed
primary care practices and hospital-based emergency departments.30

Innovations in Specialty Ambulatory

Care Services
New models of ambulatory care delivering specialty services over the
past 2 decades have complicated the relationships between hospitals
and physicians. Enhanced physician practices (so-called physician mega-
groups), nonhospital surgery (including ambulatory surgery centers and
office-based surgery), advanced diagnostic imaging centers, and radia-
tion therapy all fall into this category. The number of these facilities has
steadily risen in New York and around the country as physicians, tak-
ing advantage of new forms of technology and available capital, pursue
new ventures separate from hospital centers.31 Proponents argue that
such novel arrangements create “centers of excellence” for specialty care
and, in the case of enhanced physician practices, promote community-
based population health. But detractors contend that despite providing
complex and costly services, the enhanced arrangements operate with
insufficient oversight of safety and quality and cherry-pick the lower-
risk, more affluent patients while delivering more lucrative services.
The amalgamation of “specialty ambulatory care services” has made
each category of service even more complex. Although enhanced physi-
cian practices are in some ways the most natural accountable care or-
ganizations, they can also destabilize existing safety-net providers by
luring away commercially insured patients. Nonhospital surgery spans
care sites with drastically different cost structures and regulatory respon-
sibilities, and there is little help to patients to find appropriate sites of
care. As a result, the same procedure may be performed in office-based
surgery, ambulatory surgery centers, and hospitals. Advanced diagnostic
imaging is almost certainly overused, although the underlying reasons
are more complicated than financial inducements, as defensive medicine,
patient preference, and time constraints all likely play a role.32 Mean-
while, radiation therapy might be appropriately utilized as a whole, even
790 D.A. Chokshi, J. Rugge, and N.R. Shah

though the predilection toward costlier modalities of radiation therapy

may warrant scrutiny.

Regulatory Tools
In New York State, medicine may be practiced in one of two modes: pro-
fessional or institutional. The state’s statutes and regulations for practic-
ing medicine in both the professional and the institutional modes contain
and use many regulatory tools to shape the delivery, monitor the quality,
and define the cost of care, including formal licensing, registration with
periodic re-registration, establishment through the CON process, close
definition of allowed scope of services, use of third-party agencies for
purposes of accreditation, posting requirements, naming conventions
and restrictions, routine surveillance, investigation of complaints with
imposition of sanctions as appropriate, requirements to accept certain
insurance, and requirements to connect to information exchanges.
The aim of New York’s regulatory approach is to value the pluralism
of the state’s health care delivery system and recognize in this diversity
the numerous benefits, including greater choice for consumers, practice
options for providers, ability to tailor service programs to the needs of
different communities and populations, and, perhaps most beneficial of
all, an opportunity for experimentation and innovation in order to create
better models of caregiving.

A Vision for Ambulatory Care

Developing New York’s regulatory framework required an in-depth
study of the changes taking place in health care delivery. In the future,
more care will be delivered in the outpatient setting and will be managed
by teams of providers, often working across distributed networks, and
much of it will be remotely delivered through telehealth. Existing insti-
tutions are restructuring around this reality, as shown in the evolution of
some hospitals into full health care delivery systems, in the expansion of
some federally qualified health centers into powerful regional providers
of care, and in the emergence of large, multispecialty physician groups,
with some of them assuming financial risk.
Risk-based contracts have shown promise in slowing the increase
in medical expenditures for both private and public payers (eg,
Redesigning an Ambulatory Care Regulatory Framework 791

Medicare).33,34 Many of the arrangements are grounded in the concept

of “accountable care,” in which a group of providers accepts responsi-
bility for all health care services required by a given population, and is
held accountable for cost and quality outcomes. Of the 366 Medicare
Accountable Care Organizations (ACOs) operating in 2014, 25 are lo-
cated in New York,35 with a majority sponsored by physician groups
rather than hospitals. The other categories of “disruptive innovators”—
including retail clinics, start-up primary care networks, and ambulatory
surgery centers—are testing models of care with the potential to up-
end current payment and delivery paradigms. In this environment, the
primacy of inpatient acute care as the financial driver of the health
care system is challenged, and the role of chronic disease managed in
ambulatory care settings is heightened.

The Way Forward

Grounded in this vision for advanced ambulatory care, the New York
regulatory approach (for a summary of recommendations, see Table 1)
has charted a path forward in an evolving market environment. The
recommendations should be seen as an initial set of policy priorities
meant to be applied in tandem, but also with built-in flexibilities to
adapt to changing circumstances. The details of these recommendations
flowed from 6 broader conclusions.
First, patient safety and quality standards for new models of care
should equal or exceed existing clinical standards in currently regulated
environments.
Second, the public’s awareness of novel ambulatory care services is
paramount, so the standard nomenclature for services and public signage
should be chosen to reduce, not increase, consumers’ confusion.
Third, continuity of care, particularly with patients’ primary care
practices, should be preserved and promoted. Primary care is the robust
and necessary foundation of all care, whereas episodic care, from minor
care to serious emergencies, is supplementary and complementary and
thus layered into, above, or around the foundation of primary care.
Fourth, a robust data infrastructure, implemented by means of in-
teroperable health information technology systems, should support
providers’ reporting requirements as well as patients’ continuity of care.
792 D.A. Chokshi, J. Rugge, and N.R. Shah

Over time, the availability of these data should enable further refinement
of the state’s own regulatory system.
Fifth, regulation should be directed to create conditions for fair com-
petition in the ambulatory care market, particularly among institutional
providers and independent professional practices. In cases of market fail-
ure, particularly in underserved areas, other regulatory considerations
may predominate in order to develop highly integrated “utility-style”
models of care.
Sixth, regulatory recommendations are a work in progress, and addi-
tional changes will depend on the evolution of ambulatory care.
Finally, despite the broad penetration of novel ambulatory care op-
tions across the United States, few policy precedents pertain to compre-
hensive ambulatory care oversight. Massachusetts created a state-level
health planning council to identify health care service needs, determine
priorities for addressing those needs, and make recommendations for
the appropriate supply and distribution of services. In its first phase,
the council is addressing 6 areas: behavioral and mental health services,
primary care resources, postacute care, ambulatory surgery, percutaneous
coronary intervention, and trauma.36 Only a few other states have em-
barked on a wide-ranging assessment of regulation of ambulatory care
services. Therefore, by building on the foundation described in this ar-
ticle, New York aspires to become a trailblazer in sound oversight while
encouraging innovation in health care delivery.

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Funding/Support: None.
Conflict of Interest Disclosures: All authors have completed and submitted the
ICMJE Form for Disclosure of Potential Conflicts of Interest. No disclosures
were reported.
Acknowledgments: The authors wish to thank the New York Public Health and
Health Planning Council for their fundamental contribution to this work. The
views expressed in this article are those of the authors and do not necessarily
represent the views of the institutions with which they are affiliated.

Address correspondence to: Dave A. Chokshi, 125 Worth St, Rm 410, New York,
NY 10013 (email: dave.chokshi@nyumc.org).