aco – Duane Morris Health Law

December 4, 2019 by Neville M. Bilimoria

Skilled Nursing Facilities, Beware of ACOs

Providers in the long term care industry often ask me whether they should sign on with their local accountable care organization (“ACO”). My answer has always been, for years now, absolutely! After all, ACOs can be a good source of referrals for skilled nursing. Plus, a team-oriented ACO can foster better patient care, quality care and wellness in the ACO setting in the community. However, more of our skilled nursing facility clients have been experiencing problems with certain ACOs operating as dictatorships. Perhaps this is because more and more skilled nursing facilities are finally entering the realm of ACO involvement.

While it is good for a skilled nursing facility to be on the ACO’s “A List” of skilled nursing home providers, skilled nursing facilities need to carefully review their contracts with ACOs to make sure they are not taken advantage of or subject to increased liability. For example, recently one skilled nursing facility relationship with its ACO was so strained that it fired its ACO due to problems with patient care. See Alex Spanko, “How One Skilled Nursing Operator Navigates The Occasional Single ‘Dictatorship’ of ACOs,” Skilled Nursing News, October 16, 2019. In some cases, there were reports that ACOs are placing too much pressure on skilled nursing facilities to discharge residents earlier than indicated, or forcing facilities to provide less care in order to reduce ACO costs, often times to the detriment of residents. Continue reading “Skilled Nursing Facilities, Beware of ACOs”

December 2, 2015 by Amy E. McCracken

Final AKS and Stark Waivers in Connection With the Shared Savings Program

The Centers for Medicare and Medicaid Services (CMS) and Office of Inspector General (OIG) issued the final rule regarding waivers of the application of the physician self-referral law, the Federal anti-kickback statute, and the civil monetary penalties (CMP) law provision relating to beneficiary inducements to specified arrangements involving accountable care organizations (ACOs) under section 1899 of the Social Security Act (the Act) (the “Shared Savings Program”). For purposes of the Shared Savings Program, providers must integrate in ways that potentially implicate fraud and abuse laws addressing financial arrangements between sources of Federal health care program referrals and those seeking such referrals. The Shared Savings Program focuses on coordinating care between and among providers, including those who are potential referral sources for one another—potentially in violation of the fraud and abuse laws.

In order to provide flexibility for ACOs and their constituent parts, the following five waivers have been created:

ACO pre-participation waiver – waives the physician self-referral law and the Federal anti-kickback statute that applies to ACO-related start-up arrangements in anticipation of participating in the Shared Savings Program, subject to certain limitations, including limits on the duration of the waiver and the types of parties covered.
ACO participation waiver – waives the physician self-referral law and the Federal anti-kickback statute that applies broadly to ACO-related arrangements during the term of the ACO’s participation agreement under the Shared Savings Program and for a specified time thereafter.
Shared savings distributions waiver – waives the physician self-referral law and the Federal anti-kickback statute that applies to distributions and uses of shared savings payments earned under the Shared Savings Program.
Compliance with the physician self-referral law waiver – waives the Federal anti-kickback statute for ACO arrangements that implicate the physician self-referral law and satisfy the requirements of an existing exception.
Patient incentive waiver – waives the Beneficiary Inducements CMP and the Federal anti-kickback statute for medically related incentives offered by ACOs, ACO participants, or ACO providers/suppliers under the Shared Savings Program to beneficiaries to encourage preventive care and compliance with treatment regimes.

The waivers apply uniformly to each ACO, ACO participant, and ACO provider/supplier participating in the Shared Savings Program. The waivers are self-implementing; parties need not apply for a waiver. Rather, parties that meet the applicable waiver conditions are covered by the waiver.

January 27, 2015 by Amy E. McCracken

ACOs are More Important Than Ever for LTC Facilities

On January 26, 2015, the United States Department of Health & Human Services (HHS) announced its timeline for shifting Medicare reimbursements from volume-based criteria to value-based criteria. HHS has adopted a framework that categorizes health care payments according to how providers receive payment to provide care:

• Category 1—fee-for-service with no link of payment to quality
• Category 2—fee-for-service with a link of payment to quality
• Category 3—alternative payment models built on fee-for-service architecture
• Category 4—population-based payment

In Monday’s announcement, HHS disclosed its initiative to drive more of the Medicare payments to categories 3 and 4. This is the first time in history that HHS has set explicit goals for alternative payment models and value-based payments. HHS declared: “Improving the quality and affordability of care for all Americans has always been a pillar of the Affordable Care Act, alongside expanding access to such care. The law gives us the opportunity to shape the way health care is delivered to patients and to improve the quality of care system-wide while helping to reduce the growth of health care costs.”

By the end of 2016, HHS has set a goal of tying 30 percent of traditional, fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements. By the end of 2018, the goal is 50 percent of these payments.

An ACO is an organization of health care providers that agree to be accountable for the quality, cost, and overall care of a group of Medicare beneficiaries. Reimbursement is tied to quality metrics to reduce the total cost of care for the assigned population of patients. Hospitals and physicians have been forming ACOs, and HHS’s most recent initiative should drive even more dollars in this direction.

However, in our experience, long-term care facilities (LTC Facilities) have been slow to adopt the ACO model. Refusal to join an ACO could result in fewer referrals from hospitals and other providers, since ACO members will refer to the facility (or facilities) within the ACO. LTC Facilities with high ratings for their Quality Measures (on Nursing Home Compare) and low re-hospitalization rates will be more attractive to ACOs. Now is the time to join an ACO, before it is too late.

March 31, 2011September 10, 2014 by Duane Morris

CMS Releases Long-Awaited Proposed Rule on Accountable Care Organizations

On March 31, 2011, the Centers for Medicare & Medicaid Services (CMS) and Health and Human Services (HHS) unveiled the long-awaited federal rule on accountable care organizations. This proposed rule would implement section 3022 of the Affordable Care Act, which allows service providers and suppliers to continue receiving traditional Medicare fee-for-service payments under Parts A and B, and to be eligible for additional payments based on meeting specified quality and savings requirements.

To view the proposed rule, please visit the Office of the Federal Register website.

March 30, 2011September 10, 2014 by Duane Morris

A Summary of Medicare Shared Savings Program and ACO Proposed Regulations

On March 30, 2011, the Centers for Medicare and Medicaid issued the long-awaited, proposed regulations for the Medicare Shared Savings Program, including details of the requirements for qualifying as an accountable care organization (ACO), such as:

Eligible legal entities
Criteria for shared governance
Assignment of beneficiaries to ACOs
Different types of risk contracts
Benchmarks and calculations of savings
Shared savings, antitrust issues and policies, Medicare anti-kickback, and other regulatory requirements as applied to ACOs

The full text of the summary is available as a Duane Morris Alert.