A New Jersey organized delivery system (ODS) is "a legal entity that contracts with a carrier for the purpose of providing or arranging for the provision of health care services to those persons covered under a carrier's health benefits plan, but which is not a licensed health care facility or other health care provider," and it must be certified or licensed by the Department of Banking and Insurance (DOBI) before it contracts with a carrier (DOBI). This page is for IPAs, physician hospital organizations, PPOs and other organizations taking on delegated health plan functions or financial risk in New Jersey. Integral Healthcare Solutions (IHS) assembles your ODS application packet and drafts the oversight and reporting procedures; your counsel and actuaries own classification and solvency.

Last reviewed: October 2026.

What is New Jersey ODS certification?

ODS certification and licensure are DOBI's two approval routes for organizations that contract with carriers. DOBI gives the examples: "Examples of the types of entities that are an ODS include preferred provider organizations (PPOs), Physician Hospital Organizations (PHOs) and Independent Practice Associations (IPAs). In order to contract with a carrier, an ODS must become licensed or certified" (DOBI, Organized Delivery Systems).

The governing text, as DOBI cites it, is the Organized Delivery System Act (N.J.S.A. 17:48H; DOBI cites N.J.S.A. 17:48H-33), the Health Care Quality Act (N.J.S.A. 26:2S-1 et seq.), N.J.A.C. 11:24B for certification (DOBI's certification application checklist cites N.J.A.C. 11:24B-2.2, 2.3 and 2.4) and N.J.A.C. 11:22-4 for financial risk and licensure (DOBI cites 11:22-4.2 and 11:22-4.3(b)). The DOBI forms are the "Application Package for Certification as an Organized Delivery System (ODS)" and a separate application for a license. This page quotes DOBI's own pages and the certification application package, read October 2026; it does not quote the regulation text itself.

DOBI's ODS page also lists "Pharmacy Benefits Managers and ODS Compliance (pending rulemaking)." IHS has not reviewed that item; check it with counsel before filing.

The standards follow the carrier's. DOBI states that ODS standards "are substantially similar to those that carriers would have to comply with if they were performing the specific functions themselves in accordance with the Health Care Quality Act," and that "when the delegate is an ODS, the ODS also becomes legally responsible to assure compliance with the Health Care Quality Act and appropriate rules" (DOBI, ODS regulatory requirements).

DOBI lists nine delegated function categories: "1. Performing or arranging for the performance of one or more types of health care services; 2. Network management, including recruitment and retention; 3. Credentialing and recredentialing; 4. Utilization management development; 5. Utilization management application; 6. Utilization management appeals; 7. Member complaints; 8. Provider complaints; 9. Continuous quality improvement" (DOBI).

Who needs it and what triggers it

An organization needs ODS certification or licensure when it wants to contract with a carrier to provide or arrange care for the carrier's members and is not itself a licensed facility or provider. The common triggers:

• A first carrier contract for an IPA, PHO, PPO or similar entity: "In order to contract with a carrier, an ODS must become licensed or certified" (DOBI).
• Taking on delegated functions from a carrier, such as credentialing, utilization management or complaints, from the nine categories DOBI lists.
• Taking on financial risk. "An ODS that assumes financial risk must become licensed, unless the Department determines the financial risk is de minimus, as set forth in regulation" (DOBI).

Some entities are carved out: "by law, an entity that only contracts to provide pharmaceutical services, or case management services, or employee assistance plan services does not have to become licensed or certified" (DOBI).

How IHS helps

IHS prepares the application and the procedures behind it. The process:

1. Gap assessment. IHS assesses your delegated activities against DOBI's ODS requirements and the delegated function categories you will perform.
2. Questionnaires. IHS sends questionnaires on your carrier contracts, governance and delegated functions.
3. Document and evidence mapping. Each application item is crosswalked to the exhibit that answers it.
4. Drafting. IHS drafts the oversight, carrier reporting, member and provider complaint, and delegated-function procedures (utilization management, credentialing, quality improvement), and the business plan sections the package asks for. Your clinical and operations leaders review and approve the clinical and program content.
5. Packet review. IHS reviews the assembled packet against the crosswalk, the way a reviewer would read it.
6. Filing support. IHS drafts the application and cover text for your organization to file with DOBI.

What you supply: carrier contracts, governance documents, financial statements, your counsel, and actuarial or finance specialists.

The limit: whether you assume financial risk, whether a de minimis exemption applies, and whether your finances are adequate are determinations for your counsel and actuary. IHS does not file.

What to have ready

Each item ties to DOBI's ODS pages or the certification application package (read October 2026).

• Your carrier contracts, marked to show which of DOBI's nine delegated function categories you will perform (DOBI).
• Your counsel's analysis of whether your compensation "entails the assumption of financial risk, as defined at N.J.A.C. 11:22-4.2," and whether de minimis risk "as set forth at N.J.A.C. 11:22-4.3 (b)" could support "an exemption from licensure" (DOBI).
• A business plan that includes "a plan, in the event of insolvency of the ODS, for continuation of the health care services" (certification application package).
• "a description of the arrangement for the ODS reporting of data to the carriers and a description of the carrier's oversight responsibility" (certification application package).
• Credentialing and recredentialing procedures, if that function is delegated to you (category 3, DOBI).
• Utilization management development, application and appeals procedures, if delegated (categories 4 to 6, DOBI).
• Member and provider complaint procedures, if delegated (categories 7 and 8, DOBI).
• A continuous quality improvement program, if delegated (category 9, DOBI).
• Network management procedures, including recruitment and retention, if delegated (category 2, DOBI).
• The non-refundable certification application fee of $2,500.00, "payable to the Treasurer, State of New Jersey" (certification application package).

The introductory call is the place to go through this list against your current contracts and documents.

How it compares

DOBI's pages set out three positions an organization can be in.

• Certified ODS. DOBI's certification application is "To be completed by entities that will be compensated on a basis that entails no assumption of financial risk" (certification application package). IHS reads the de minimis route as leading here: DOBI says a de minimis entity "may be granted an exemption from licensure" (DOBI), and an ODS must still be licensed or certified to contract with a carrier.
• Licensed ODS. For an ODS "compensated on a basis that entails the assumption of financial risk, as defined at N.J.A.C. 11:22-4.2" (DOBI). "An ODS that assumes financial risk must become licensed" unless DOBI finds the risk de minimis (DOBI).
• Statutory carve-out. An entity that "only contracts to provide pharmaceutical services, or case management services, or employee assistance plan services" does not have to become licensed or certified (DOBI).

Which position fits is decided by your contracts and your counsel's reading of the financial-risk rules.

What it costs

An ODS application has two cost parts: DOBI's fee and your own staff, counsel and actuarial time. For certification, DOBI's application package states "a non-refundable application fee of $2,500.00, payable to the Treasurer, State of New Jersey" (DOBI certification application package, read October 2026). The licensure application fee is not stated on the pages we reviewed. Verify current fees with DOBI. IHS scopes each engagement after a free introductory call.

What this is not

• It is not legal or actuarial advice. Financial-risk classification and financial adequacy are your counsel's and actuary's determinations.
• It is not a guarantee of DOBI's decision. DOBI decides whether to certify or license.
• IHS does not file with or correspond with DOBI for you. IHS drafts; your organization files.

Frequently asked questions

What is an organized delivery system (ODS) in New Jersey?

DOBI defines it as "a legal entity that contracts with a carrier for the purpose of providing or arranging for the provision of health care services to those persons covered under a carrier's health benefits plan, but which is not a licensed health care facility or other health care provider" (DOBI).

Does our IPA, PHO or PPO need ODS certification or licensure?

DOBI names PPOs, PHOs and IPAs as examples of ODS types and states: "In order to contract with a carrier, an ODS must become licensed or certified" (DOBI). Whether it is certification or licensure depends on whether you assume financial risk.

What is the difference between a certified ODS and a licensed ODS?

Licensure is for an ODS that assumes financial risk: "An ODS that assumes financial risk must become licensed, unless the Department determines the financial risk is de minimus, as set forth in regulation" (DOBI). DOBI's certification application is "To be completed by entities that will be compensated on a basis that entails no assumption of financial risk."

What counts as financial risk, and what is the de minimis exemption?

DOBI points to the regulation: licensure applies to entities "compensated on a basis that entails the assumption of financial risk, as defined at N.J.A.C. 11:22-4.2," and an entity with de minimis risk "as set forth at N.J.A.C. 11:22-4.3 (b) may be granted an exemption from licensure" (DOBI). Applying those definitions to your contracts is your counsel's and actuary's call.

Which entities do not need New Jersey ODS certification or licensure?

DOBI states that "by law, an entity that only contracts to provide pharmaceutical services, or case management services, or employee assistance plan services does not have to become licensed or certified" (DOBI).

What documents go into an ODS certification application?

DOBI's certification package requires a business plan that includes "a plan, in the event of insolvency of the ODS, for continuation of the health care services" and "a description of the arrangement for the ODS reporting of data to the carriers and a description of the carrier's oversight responsibility" (DOBI). Its checklist cites N.J.A.C. 11:24B-2.2, 2.3 and 2.4. IHS builds a crosswalk from each checklist item to your exhibit.

How much does New Jersey ODS certification cost?

DOBI's certification package states "a non-refundable application fee of $2,500.00, payable to the Treasurer, State of New Jersey" (DOBI). The licensure fee is not on the pages we reviewed. Verify current fees with DOBI.

Which delegated functions does an ODS have to meet standards for?

DOBI lists nine categories, from performing or arranging health care services and network management through credentialing, utilization management, member and provider complaints and continuous quality improvement (DOBI). The standards are "substantially similar" to those a carrier would meet performing the function itself under the Health Care Quality Act.

Is an ODS responsible for compliance with the Health Care Quality Act?

Yes, for the functions delegated to it. DOBI states that "when the delegate is an ODS, the ODS also becomes legally responsible to assure compliance with the Health Care Quality Act and appropriate rules" (DOBI).