Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.
By James Swann
Oct. 28 — Accountable care organizations won't be subject to certain fraud and abuse laws when they participate in the Medicare Shared Savings Program, according to a final rule released Oct. 28.
The final rule is designed to ease restrictions on ACOs by allowing them to enter into certain financial deals that otherwise would be prohibited under the physician self-referral law (known as the Stark law) and the anti-kickback statute.
The waivers have been effective since 2011 when the Centers for Medicare & Medicaid Services and the Department of Health and Human Services Office of Inspector General published in the interim final rule. Prior to the waivers, Stark and anti-kickback concerns restricted certain financial arrangements between hospitals and physicians, such as the distribution of shared savings from ACO activities, and stakeholders said the laws were an impediment to the development of integrated-care delivery systems.
The final rule will be published in the Oct. 29 Federal Register and will become effective the same day.
Section 1899(f) of the Affordable Care Act gives the HHS secretary the authority to waive certain fraud and abuse laws to further the goals of the ACA.
The interim final rule, which became effective upon publication, was originally set to expire on Nov. 2, 2014, but the CMS and the OIG extended it for one year.
• a waiver of the Stark law and the anti-kickback statute for ACOs that are planning to participate in the Medicare Shared Savings Program;
• a waiver of the Stark law and the anti-kickback statute for ACOs participating in the shared savings program;
• a waiver of the Stark law and the anti-kickback statute for ACOs engaged in shared savings distributions;
• a waiver of the anti-kickback statute for ACOs that implicate the Stark law; and
• a waiver of the beneficiary inducement civil monetary penalty for ACOs that offer patients medical incentives to encourage preventive treatments.
“These five waivers provide flexibility for ACOs and their constituent parts to pursue a wide array of activities, including start-up and operating activities that further the purposes of the Shared Savings Program,” the final rule said.
To qualify for the waivers, ACOs must document and describe their arrangements, including all parties to the arrangement, any items or services provided under the arrangement and the financial terms of the arrangement. Documentation on an arrangement must be kept by the ACO for at least 10 years, according to the final rule.
While the rule made final certain waivers for ACOs, it didn't include a waiver for gainsharing CMPs that was in the interim final rule because of a legislative change made in the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.
Prior to MACRA, the gainsharing CMP prohibited hospitals or health systems from knowingly making payments to physicians to induce them to reduce or limit services, even medically unnecessary services.
The gainsharing waiver was designed to allow physicians operating in an ACO to receive payments for reducing or limiting services that improved efficiency and didn't affect patient care.
However, MACRA revised the wording of the gainsharing CMP to prohibit only payments that would reduce or limit medically necessary services, omitting medically unnecessary services.
As a result, “arrangements between hospitals and physicians that incentivize greater efficiency and reduction of waste, which previously may have run afoul of the Gainsharing CMP, would no longer implicate the provision, provided those arrangements do not involve reductions or limitations in medically necessary care,” the final rule said.
Thomas S. Crane, an attorney with Mintz Levin Cohn Ferris Glovsky and Popeo PC in Boston, told Bloomberg BNA Oct. 28 that the statutory changes to the gainsharing CMP may cause physicians to pursue their own gainsharing arrangements, outside of ACOs.
“ACOs are basically gainsharing on steroids, and now that the gainsharing statute has been changed, physicians might just say, let's do gainsharing and not join an ACO,” Crane said.
Kevin McAnaney of the Law Offices of Kevin G. McAnaney in New York told Bloomberg BNA Oct. 28 that apart from the removing the gainsharing waiver, the final rule appeared virtually identical to the interim final rule.
“I don't think this will affect the marketplace one way or the other,” McAnaney said.
McAnaney said the gainsharing waiver was no longer necessary due to the revised language contained in MACRA.
“The prior law had applied to payments to reduce or limit any services, necessary or unnecessary,” McAnaney said.
To contact the reporter on this story: James Swann in Washington at email@example.com
To contact the editor responsible for this story: Brent Bierman at firstname.lastname@example.org
Notify me when updates are available (No standing order will be created).
Put me on standing order
Notify me when new releases are available (no standing order will be created)