OIG Official Says Fraud, Abuse Law Waivers Likely to Be Applied Consistently to All ACOs

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Proposed waivers of the physician self-referral law, federal anti-kickback statute, and civil monetary penalties law for qualified accountable care organizations most likely would be applied consistently across all entities, a senior adviser with the Department of Health and Human Services Office of Inspector General said during an April 28 web conference.

“We are not envisioning a case-by-case or advisory opinion approach for introducing the waivers; they would be consistent for everyone,” Vicki L. Robinson said during a Health Care Compliance Association webinar, Proposed ACO Rule: Risks & Challenges for Compliance Officers.

The Centers for Medicare & Medicaid Services and OIG in the April 7 Federal Register published a notice with comment period pertaining to proposals for waivers of fraud and abuse laws for ACOs. Comments are due June 6.

An ACO is a group of medical care providers that accepts responsibility for providing or arranging all care for a group of patients under a payment arrangement that allows it to profit by reducing costs and improving quality. CMS issued a proposed rule March 31 for implementing ACOs.

Providers have expressed concerns that without fraud and abuse law waivers, the creation of ACOs would create financial relationships that could run afoul of existing laws.

Robinson said any waivers to fraud and abuse laws would “supplement, not supplant, existing safe harbors and exceptions.”

Under the OIG/CMS notice, the Stark, anti-kickback, and CMP laws would be waived with respect to the distribution of shared savings payments to ACOs, Robinson said.

In addition, the anti-kickback and CMP laws would be waived for Stark-compliant relationships within the ACO, she said.

The Stark law prohibits referrals of Medicare and Medicaid patients to entities with which physicians or their immediate family members have a financial relationship if the referral is for the furnishing of designated health services.

“Usually, arrangements that comply with the Stark law are still subject to the [anti-kickback] and CMP laws, so this would be a departure from the norm,” Robinson said. “Our goal is to use the waiver to support ACOs while at the same time protecting patients. We want to ensure that the fraud and abuse laws do not impede beneficial ACOs.”

Compliance Challenges.

Robinson was joined on the web conference by Max Reynolds, deputy general counsel of health law for the University of California Office of General Counsel. Reynolds said that compliance officers will face numerous challenges associated with implementing ACOs.

For example, he said, ACO compliance officers must monitor their clinical operations to ensure that high-risk beneficiaries are not being denied service.

“It's very significant that you monitor whether you're avoiding high-risk beneficiaries and steering healthy beneficiaries into your network,” Reynolds said. “Make sure that you're not doing anything to deter the high-risk beneficiaries from getting care.”

A greater number of high-risk beneficiaries could reduce the shared savings payments for ACOs, Reynolds said.

ACOs also will need to implement and maintain a compliance plan and designate a compliance officer who is not the legal counsel, he said.

The compliance officer must have direct communication with the ACO's governing board.

Other compliance requirements include:

• ensuring that the ACO adheres to the governing board structure in the original application to CMS;

• ensuring that state licensing requirements are met;

• validating the ongoing implementation of a quality assurance and improvement process, led by a physician;

• allowing CMS to approve marketing materials before their use; and

• notifying the Federal Trade Commission if there is a material change to the ACO network that gives it a market share of more than 50 percent.

By James Swann  


The ACO notice on fraud waiver proposals is at http://edocket.access.gpo.gov/2011/pdf/2011-7884.pdf.

The CMS proposed rule on ACOs is at http://edocket.access.gpo.gov/2011/pdf/2011-7880.pdf.