Recently, the Centers for Medicare & Medicaid Services (“CMS”) published the final rule in connection with the waivers of the Stark Law, the Anti-Kickback Statute, and the Civil Monetary Penalties relating to specific arrangements involving accountable care organizations (“ACOs”). Unfortunately, this final rule does not finalize waivers of the application of the Civil Monetary Penalties relating to gainsharing arrangements. Nevertheless, this final rule does offer organizations a more thorough and concrete understanding of the Shared Savings Program fraud and abuse waivers.
What is the Shared Savings Program?
The Shared Savings Program is a way to promote accountability for certain Medicare populations ultimately involving the coordination of care to promote high quality and efficient healthcare delivery. Specifically, ACOs were created to better the care of individuals, better health for populations, and lower the costs of healthcare. Nevertheless, this type of arrangement inherently includes integration of providers that could result in potential implication of various fraud and abuse laws. As CMS notes, “[t]hese fraud and abuse laws require financial separation between such parties or regulate relationships between them.” Luckily, there is statutory guidance allowing certain fraud and abuse laws to be waived to carry out the Shared Savings Program. This final rule discusses the specific requirements of those waivers.
Read more below for the 7 Things You Need to Know About the Shared Savings Waivers.
1. A Waiver of the Gainsharing CMP is Not Included and Not Necessary
Previously, CMS had issued a gainsharing CMP waiver to carry out the purposes of the Shared Savings Program. In short, the gainsharing CMP applied to certain payments between hospitals and physicians which may induce a physician to reduce or limit medically necessary services. Recently, the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) revised the gainsharing CMP so that it prohibits reducing “medically necessary” services. Previously the language of the law did not include “medically necessary” leaving much debate about the topic. Because of this revision, the waiver is no longer necessary as organizations can incentivize efficiency and reduction in waste so long as it does not involve reductions in medically necessary care.
2. Arrangements Must “Reasonably Relate” to One Purpose of the Shared Savings Program
Several of the waivers contained within the final rule require that an arrangement must be “reasonably related to the purposes of the Shared Savings Program.” It has further been clarified that arrangements need to only reasonably relate to one purpose. Purposes include promoting accountability for the quality, cost, and overall care for a Medicare population as described in the Shared Savings Program; managing and coordinating care for Medicare fee-for-service beneficiaries through an ACO; and encouraging investment in
infrastructure and redesigned care processes for high quality and efficient service delivery for patients, including Medicare beneficiaries.
CMS provided additional examples of activities that would be reasonably related to the purposes of the Shared Savings Program:
as through the use of telehealth, remote patient monitoring, and other enabling technologies; (4) establishing clinical and administrative systems for the ACO; (5) meeting the clinical integration requirements of the Shared Savings Program; (6) meeting the quality performance standards of the Shared Savings Program; (7)
evaluating health needs of the ACO’s assigned population; (8) communicating clinical knowledge and evidence-based medicine to beneficiaries; and (9) developing standards for beneficiary access and communication, including beneficiary access to medical records.” 76 FR 68002.
3. Home Health Suppliers May Use All Waivers Except the Pre-Participation Waiver
CMS previously issued concerns that home health suppliers posed a risk of abuse in the event the pre-participation waiver was utilized. This waiver protects start-up arrangements and good-faith efforts to form an ACO so long as the conditions are met. Further, “home health supplier” was not defined leaving many organizations not knowing whether it would be included within the definition. CMS stated that a “home health supplier” because of the risks posed cannot utilize the pre-participation waiver and that “home health supplier” would be defined as “a provider, supplier, or other entity that is primarily engaged in furnishing ‘home health services’ as that term is defined in section 1861(m) of the Act.”
4. Governing Boards Must Maintain Absolute Compliance with the Waiver Requirements
Continuing the focus on governing board accountability, CMS in the final rule continued to stress the importance of additional safeguards as it relates to meeting the requirements of the various waivers. Specifically, the pre-participating and participation waivers require the governing body of an ACO to make a bona fide determination that the arrangement is reasonably related to the purposed of the Shared Savings Program. CMS notes that this must be an actual process rather than “rubber stamping” an arrangement. Further, governing board must meet the requirements of 42 CFR 425.106 and 108, and must maintain a meaningful conflicts of interest policy. Above all, CMS notes that it “is essential that an ACO have sufficient documentation to identify clearly the arrangement its governing body is considering . . . “
5. Outside Party Arrangements Do Not Include Additional Requirements to Meet Certain Waivers
Within the scope of the pre-participation and participation waivers are outside part arrangements with an individual or entity that does not meet the definition of an ACO, an ACO participant, or an ACO provider or supplier but has a role in coordinating and managing care of the ACO patients. CMS recognizes that arrangements in which ACOs enter into agreements with outside individuals or entities to promote care coordination for their patients is should be covered by the waivers so long as all requirements are met. However, CMS rejected that fair market value or commercial reasonableness requirements be met so long as the waiver requirements are met for outside party arrangements.
6. Outside Party Payments Are Protected Under the Distribution Waiver
CMS has made it clear that payments to outside participants of the ACO are possible under the shared savings distribution waiver provided all applicable waiver conditions are met. Further, the payments must be used for activities that are reasonably related to the purposes of the Shared Savings Program. Further, such compensation used must actually be shared savings.
7. CMS is Concerned that Private Payor ACOs May Implicate the Stark Law
CMS explained that although waivers need not apply to private payor ACO models, CMS is “mindful of concerns that some private payer arrangements may be sensitive to the volume of business generated for downstream providers or suppliers and that this characteristic may have implications for the” Stark Law. CMS noted that the participation waiver does not turn on the source of the funds. This providers downstream protection of commercial plans. Further, most commercial arrangements can fit within the risk-sharing arrangements exception. Finally, some private payer arrangements may fit within the existing Anti-Kickback Statute safe harbors. Thus, although CMS is still concerned, commercial ACOs should be aware of this implication of the Stark Law.
For more information on the Shared Savings Waivers, please see the link here.