How do we develop ACOs that are designed to bring hospitals and physicians closer together while at the same time abide by laws designed to separate them?

Yesterday, the Centers for Medicare & Medicaid Services (CMS) presented an hour-long webinar on ACOs and Antitrust, Stark Law, Anti-Kickback Statute (AKS) and Civil Monetary Penalty Law (CMP), hosted by Troy Barsky, Director, Division of Technical Payment Policy and Michael Wroblewski, Performance-Based Policy Payment Staff for CMS.

Troy Barsky addressed Stark, AKS and CMP laws. First Mr. Barsky reviewed the types of payments and organizational structures that may implicate fraud and abuse concerns. Payments to providers or suppliers under existing Medicare and Medicaid parts A and B, the new Shared Savings Program and partial capitation or other models approved by the Secretary may create suspect financial relationships. Further, entities organized by ACO Professionals, networks of ACO Professionals, partnerships or joint ventures among hospitals and ACO Professionals or hospitals employing ACO Professionals may also create suspect financial relationships. Finally, new models developed by the CMS Innovation Center may create suspect financial relationships.

Mr. Barsky reported that existing Stark exceptions and AKS safe harbors should be applied and that the bona fide employment exception and safe harbor may be particularly useful. This, of course, suggests that the ACO Professionals would become employees of hospitals.

The “Notice of Waiver Designs in Connection With the Medicare Shared Savings Program and the Innovation Center” (76 Fed. Reg. 19,655 (April 7, 2011)) discusses general considerations in exercising waiver authority, proposes specific waivers for each of the fraud and abuse laws and solicits comments on numerous other considerations. The agencies are attempting to unify waiver design across applicable laws, and apply waivers uniformly to all eligible participants. Waivers would last as long as the arrangement with CMS is in place.

CMS intends to waive all Stark liability for distributions to or among an ACO’s current participants and provider/suppliers, and to other individuals or entities for activities necessary for and directly related to the ACO’s participation in and activities under the Shared Savings Program. CMS does not intend to protect other payments to physicians outside the Medicare Shared Savings Program. So, to the extent that an ACO has private payor arrangements, such payments may be scrutinized under AKS as the payments may relate to other ACO business.

AKS waivers would apply to distributions of shared savings, in the same manner as the Stark waivers.

CMP waivers would apply to distributions of shared savings where hospitals and physicians are each ACO participants or providers/suppliers, so long as payments are not made knowingly to induce limitation or reduction of medically necessary services.

CMS is soliciting comments on a number items falling into the following categories:

  • Funding “start up” costs,
  • Non-shared savings financial relationships,
  • Arrangements with private payers,
  • Scope, safeguards, and duration of waivers,
  • Special considerations for two-sided risk model,
  • Timing of waivers, and
  • Other Stark and kickback concerns in the ACO context.

Did you participate at the event or have further questions? We’d enjoy hearing from you.