Proposed Rule on Shared Savings Program for ACOs Expected Soon

March 22, 2011

Industry reports and comments by regulators suggest that CMS’ proposed rule on the Shared Savings Program for ACOs is expected to be released in the very near future. The much-anticipated proposed rule was submitted to the Office of Management and Budget for review on Feb. 14, 2011, where it remains. Sources indicate the delay may be due to issues regarding application of federal antitrust laws by the Federal Trade Commission (FTC) and the Department of Justice (DOJ). CMS Administrator Dr. Donald Berwick has stated there may be simultaneous guidance from CMS, the FTC and DOJ regarding application of antitrust laws to ACOs under the Shared Savings Program and similar initiatives involving commercial health plans.

The Shared Savings Program was created by Section 3022 of the Patient Protection and Accountable Care Act (the Act). Under the Shared Savings Program – to take effect no later than Jan. 1, 2012 – ACOs meeting certain requirements established by the Secretary of Health and Human Services will be eligible to receive additional payments from Medicare where certain performance guidelines are met and cost-savings targets are achieved. The amount of the additional payment will be a percentage of the difference between the estimated per capita Medicare expenditures for patients assigned to the ACO and the cost-savings per capita Medicare expenditures threshold.

CMS has issued scant guidance on any specifics about participation in the Shared Savings Program aside from a brief Preliminary Questions & Answers document posted on its website (the Q&A). As a result, a number of unanswered questions about ACOs and the Shared Savings Program exist, and industry representatives are hopeful the proposed rule will include more concrete information to allow healthcare providers to proceed with the further development of ACOs.

It’s not clear now what information will be included in the proposed rule, but the CMS request for information included in the Nov. 17, 2010, edition of the Federal Register, 75 Fed. Reg. 70165-66, provides some insights into the issues that CMS may address, including:

  • What standards will be adopted to ensure that groups of solo and small practice providers have the opportunity to actively participate in the Shared Savings Program and other ACO models developed by CMS?
  • What payment models or financing mechanisms might be used to address limited access to capital or other resources for small practices to fund efforts from which shared savings may be generated?
  • What patient attribution model should be used – one that attributes patients in advance of the performance period, or one that attributes patients at the end of the performance period?
  • How should beneficiary and caregiver experience of care be assessed as part of ACO performance?
  • What patient-centered criteria should be included in assessing ACO performance?
  • What quality performance measures should be included in assessing ACO performance?
  • What additional payment models should CMS consider aside from the Shared Savings Program and other ACO pilot projects?

The proposed rule may also include discussion of how Stark physician self-referral laws are to be applied to ACOs. This could involve efforts to finalize the exception under Stark for incentive payment and shared savings programs included in the Medicare Physician Fee Schedule proposed rule for CY 2009. It could also involve a waiver of application of Stark laws for ACOs meeting certain requirements established by CMS, as this authority is included in the Act.

It’s also possible that the Department of Health and Human Services Office of Inspector General (OIG) could issue simultaneous guidance on application of the federal Anti-kickback Law prohibiting payment of remuneration for referrals and Civil Monetary Penalty Law prohibiting beneficiary inducements and payments made to reduce the type or amount of services provided to beneficiaries. This could likewise involve a waiver of application of these laws for ACOs meeting certain requirements established by the OIG, as this authority is also included in the Act.

We will monitor the release of the proposed rule and provide future updates on this news alert, as more information becomes available. If you would like to discuss the development of ACOs, specifics about the Shared Savings Program, or any other matter involved in healthcare reform, please contact one of the authors or another member of McGuireWoods’ Healthcare Department.

McGuireWoods LLP Healthcare Group

We offer an experienced team of more than 50 lawyers well-versed in serving the needs of the healthcare, pharmaceutical, life sciences and medical device sectors. We understand the daunting array of legal and business issues our clients face, and we work tirelessly to find effective solutions to their daily challenges.

Subscribe
Back to top