The Patient Protection and Affordable Care Act ("PPACA"), enacted in March 2010, requires that the Secretary ("Secretary") of the Department of Health & Human Services ("HHS") establish a Medicare "Shared Savings Program" by January 1, 2012. The Shared Savings Program is intended to encourage physicians, hospitals, and certain other types of providers and suppliers to form accountable care organizations ("ACOs") to provide cost-effective, coordinated care to Medicare beneficiaries. At a basic level, an ACO is a network of physicians, hospitals, and other health providers that work together to improve the quality of health care services and reduce costs. The PPACA constructed the foundation of the ACO program under Medicare, but instead of establishing the details of the program in the statute, Congress authorized the Secretary to determine the parameters of the Shared Savings Program through rulemaking. Physicians, hospitals, physician groups, other providers, policymakers, and many other stakeholders in the health care industry have eagerly anticipated the issuance of the ACO proposed rule. On March 31, 2011, under the authority of the Secretary, the Centers for Medicare & Medicaid Services ("CMS") issued the proposed rule.
The proposed rule addresses numerous policy and operational issues associated with the formation of an ACO, beneficiary assignment to an ACO, the establishment of quality standards, the calculation of incentive payments, and the monitoring of ACOs, among many other issues. However, because CMS requests comment on almost every aspect of the proposed rule, it is clear that the proposed rule is very much a proposal that is subject to change in the final rule. In addition to the CMS proposed rule, the federal government released several other documents related to ACOs, including:
- CMS and the Office of Inspector General ("OIG") jointly issued a notice with comment period discussing the waiver of the physician self-referral law, the anti-kickback statute, and certain provisions of the civil monetary penalty law in connection with the Medicare Shared Savings Program (see http://www.gpo.gov/fdsys/pkg/FR-2011-04-07/pdf/2011-7884.pdf).
- The Federal Trade Commission ("FTC") and the Department of Justice ("DOJ") jointly issued an Antitrust Policy Statement titled, "Proposed Statement of Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program" (see http://www.ftc.gov/os/fedreg/2011/03/110331acofrn.pdf).
- The Internal Revenue Service ("IRS") issued a notice requesting comments regarding the need for guidance on participation by tax-exempt organizations in ACOs (see http://www.irs.gov/pub/irs-drop/n-11-20.pdf).
The CMS proposed rule was published in the April 7, 2011 issue of the Federal Register. The jointly issued CMS/OIG notice with comment period discussing the waiver of the physician self-referral law, the anti-kickback statute, and certain provisions of the civil monetary penalty law in connection with the Medicare Shared Savings Program was also published in the April 7, 2011 issue of the Federal Register. CMS will accept comments on the proposed rule and the notice with comment period discussing the proposed waiver until June 6, 2011, and will respond to comments and issue a final rule and a final waiver later this year. CMS anticipates that the Shared Savings Program will begin operating January 1, 2012, as mandated by the PPACA.
This Client Alert first provides a brief overview of the ACO model, then summarizes the proposed rule, listing areas of comment solicited by CMS and identifying the practical impact of the proposed rule, as well as questions and concerns that may emerge. Finally, this Client Alert summarizes the jointly issued CMS and OIG notice with comment period discussing the waiver of the physician self-referral law, the anti-kickback statute, and certain provisions of the civil monetary penalty law in connection with the Medicare Shared Savings Program.
This Client Alert provides a summary and analysis of those provisions of the proposed rule and the proposed waiver that we believe are of greatest interest to health care providers, and medical device and pharmaceutical manufacturers. We would be pleased to provide further analyses for individuals or organizations considering participation in the Medicare Shared Savings Program, or to assist in developing comments to the proposed rule and/or the proposed waiver.
Download the .PDF to read the full Alert.
Client Alert 2011-095