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H H S Department of Health and Human Services
U.S. Department of Health and Human Services
Health Information Technology and Quality

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What are the different types of Health Center Controlled Networks?

A health center controlled (HCCN) can be categorized in many different ways, including by integration structure or by legal organization. In terms of integration structure, a HCCN may be described as being either horizontal or vertical. Horizontal networks consist of similar types of organizations that serve similar markets, such as an all-hospital network or an all-community center network. Vertical networks are comprised of organizations from different classes or with purposes that may or may not serve the same geographical area. For example, members of a given vertical health network may include a hospital, an ambulatory care provider, a public health unit, ambulance system, and a nursing home. 

HCCNs may also be organized formally (legal incorporation) or informally (governance by written agreement). An informal arrangement may be preferred when the majority of responsibilities are performed using in-kind resources and the activities of the collaboration are not complex. Incorporation should be considered by networks that need formalized governance structure and/or engage in projects that have potential medical or financial liabilities. The appropriate business form (i.e., limited liability corporation v. limited liability partnership) and tax status (for-profit v. not-for-profit), should be determined in consultation with an attorney. Incorporated entities must meet legal requirements, such as having articles of organization/incorporation and operating agreements/bylaws. In addition, they must also meet submit documents regularly to meet statutory and regulatory reporting requirements.

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