ACOs: OIG Guidance, CMS regulations, and Interpretive Tasks
Tim Greaney has already posted on the FTC/DOJ Joint Policy Statement on antitrust scrutiny of ACO applicants, and Jordan Cohen posted on the CMS’s draft regulations on the Medicare Shared Savings Program (”MSSP”) for ACOs. In this post, I’ll describe some interesting structural issues presented by the OIG’s notice on proposed waivers, which cross-references the CMS MSSP draft regulations. The fundamental issue for the OIG is how “virtual organizations” — those not fully integrated in a corporate or financial sense — can serve the integrative goals of the Affordable Care Act while staying on the right side of the web of federal laws prohibiting physician self-referral, kickbacks, and payments to reduce care to Medicare beneficiaries. The OIG notice proposes to square this circle in two steps.
The OIG two-step; Step One
The Fraud & Abuse problem with ACOs is that they are intended to achieve the efficiency and quality gains of formally integrated delivery systems (Geisinger, Mayo Clinic) through contract-based aggregation of providers. This less formal integration, of course, implicates the dealings generally prohibited by the Physician Self-Referral Law (”Stark”), Anti Kickback Statute (”AKS”), and the Prohibition on Hospital Payments to Physicians to Induce Reduction in Services law (which provides for civil money penalties for violations) (”CMP”). The OIG notice proceeds very incrementally. In large part, the OIG proposes to affirm that a CMS determination that an ACO qualifies for participation in the MSSP signifies the adoption of quality and fiscal protections sufficient to allow a waiver of Stark, AKS, and CMP enforcement for purposes of the distribution of shared savings. In addition, and to the extent “necessary for and directly related to” the ACOS’s participation in the shared savings plan, the OIG proposes to waive enforcement under the AKS and CMP provisions with respect to conduct that falls within a Stark exception. In outline form, then, the OIG proposes as its initial waiver guidance:
- Stark. The OIG proposes to waive enforcement of Stark for
- The actual distribution of MSSP to and among ACO participants, and ACO providers/suppliers for conduct during a year in which shared savings were earned; and
- “activities necessary for and directly related to the ACO’s participation in and operations under the” MSSP.
- AKS. The OIG proposes to waive enforcement of AKS under two scenarios:
- The distribution of shared savings under the MSSP
- to and among ACO participants, and ACO providers/suppliers for conduct during a year in which shared savings were earned; and
- for any financial relationships between ACO participants and ACO providers/suppliers necessary for and directly related to the ACO’s MSSP participation that implicate Stark, but fall within a Stark exception.
- The distribution of shared savings under the MSSP
- CMP. The OIG proposes to waive enforcement of the CMP provisions under two scenarios:
- Distribution of shared savings from a hospital to a physician so long as
- “the payments are not made knowingly to induce the physician to reduce or limit medically necessary items or services”; and
- the hospital and physicians were ACO participants or providers/suppliers during the year in which the shared savings were earned.
- In the context of financial relationships among ACO participants and/or providers/suppliers necessary for and directly related to the ACO’s MSSP operations, that implicate Stark but that fall within a Stark exception.
- Distribution of shared savings from a hospital to a physician so long as
The OIG two-step; Step Two
In Step One, the OIG proposes waivers for arrangements that are central to the MSSP gain distributions, or that are central to the ACO enterprise and are structurally within Stark exceptions. The OIG goes on to solicit input on the need for additional waiver guidance, for conduct that is “beneficial” to ACO participation in the MSSP, but that also protects “patients and programs from harms caused by fraud and abuse.” The OIG solicits input on:
- Arrangements related to establishing the ACO;
- Arrangements between or among ACO participants or providers/suppliers related to ongoing operations of the ACO and achieving ACO goals;
- Arrangements between the ACO, its ACO participants and/or providers/suppliers and outside individuals or entities;
- Distributions of shared savings or similar payments from private payers;
- Other financial arrangements for which a waiver would be necessary;
- Miscellaneous: duration of waivers, scope of the waivers listed above in “Step One,” and additional safeguards; and
- Arrangements in which providers are subjected to risk, particularly in the “two-sided risk model” in the CMS draft regulations on the MSSP.
“Necessary for and directly related to”
It is pretty clear that the lion’s share of the OIG’s waiver work will be done by determining whether or not an ACO has been qualified by CMS for the MSSP. There will be waivers, however, even under Step One, that will require the OIG to evaluate the proposed arrangements. Stark enforcement regarding the actual distribution of shared gains, for example, will be waived under the proposal for CMS-qualified ACOs. But Step One proposes additional waivers “for activities necessary for and directly related to the ACO’s participation in and operations under the” MSSP. Similarly, AKS and CMP waivers are proposed for dealings between ACO participants that are within Stark exceptions so long as they are “necessary for and directly related to the ACO’s MSSP participation.” A standard based on what is “necessary for and directly related to” an ACO’s MSSP participation will, then, do a lot of the waiver work. It is not a self-defining standard, and further elaboration from the OIG (by providing examples, perhaps) will lend clarity to the OIG’s waiver guidance.
Attribution, assignment, and patient notice
ACO commentators (here (subscription required) and here) have observed that the method by which patients are “attributed” to ACOs is central to ACOs’ financial and structural planning. Attribution was the term used in the literature to refer to the formal determination that a particular Medicare patient should “count” for assessing the gain (and possibly the loss) experienced by the ACO. The CMS draft regulations on the MSSP, consistent with the terms of the Affordable Care Act, use the term “assignment” rather than attribution. The CMS proposal’s treatment of assignment, or attribution, will engender much discussion here and elsewhere in the coming weeks.
One important issue, however, seems to have been resolved. In the literature on ACOs, it has not been clear whether Medicare beneficiaries would know whether or not they had been assigned or attributed to an ACO; consistent with continuing commitment to beneficiaries’ right to choose providers within the Medicare fee for service system, the discussion contemplated the possibility that ACOs would organize a beneficiary’s care, gain payments as a result of efficiencies, but never inform the beneficiary of his “attribution” to an ACO.
Donald Berwick highlighted the requirement of patient notice in his Perspective published in the New England Journal of Medicine on the day of the regulations’ release. The CMS draft regulations on the MSSP explain the requirement of patient notice in the following terms:
[W]hile the statute refers to the assignment of beneficiaries to an ACO, we would characterize the process more as an “alignment” of beneficiaries with an ACO as the exercise of free choice by beneficiaries in the physicians and other health care providers and suppliers from whom they receive their services. . . . Therefore, an important component of the Shared Savings Program will be timely and effective communication with beneficiaries concerning the Shared Savings Program, their possible assignment to an ACO, and their retention of freedom of choice under the Medicare FFS program.
That piece of consumer protection regulation was absolutely essential. It would be odd indeed, after decades of struggle with patient protection in managed care systems, were patients to be engaged without their knowledge in a system built on economic incentives to providers directed to care management. We’ll post more about assignment and other ACO issues in the coming weeks.
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I read article after article but have been unable to decide how the aco’s will impact hospice services under the medicare benefit. Can anyone refer to publications about hospice and aco’s? thank you