Accountable Care Organizations
Regulations and Guidance
Ober|Kaler's Comprehensive Team Approach to Integration of Care and Shared Savings under the Patient Protection and Affordable Care Act
The Patient Protection and Affordable Care Act (PPACA), signed into law on March 23, 2010, includes incentives for the creation of accountable care organizations (ACOs). PPACA’s ACO program requires the Secretary to establish a shared saving program that promotes accountability of providers to patient populations and coordination of services under Medicare and encourages investment in infrastructure and design care process for high-quality, efficient service delivery. Eligible providers and suppliers include group practice arrangements, networks of individual practices, joint ventures between physicians and hospitals and physician employment models. On October 20, 2011, several agencies simultaneously announced final guidance for ACOs. The announcements included: (1) the final rule for the Shared Savings Program from the Centers for Medicare & Medicaid Services (CMS); (2) an interim final rule released jointly by CMS and the Department of Health and Human Service’s Office of Inspector General (OIG) regarding the fraud and abuse waiver authorities; (3) a final policy statement from the Department of Justice (DOJ) and Federal Trade Commission (FTC) on related antitrust issues and; (4) a notice from the Internal Revenue Service (IRS) related to tax-exempt organizations. CMS will begin accepting applications on January 3, 2012. These final rules provide the standards and measurements for quality and shared payment requirements, as well as the corporate and governance structures.
The era of the fee-for-service productivity model is coming to an end. A new era with incentives for efficient and high-quality outcomes will take its place. Providers must position themselves in the market to meet these changes. Only those who address the full gambit of legal, financial and operational issues will succeed, not only in improving the outcomes of their patients, but also in maintaining and growing their market share. Ober|Kaler has formed an interdisciplinary team of experienced health attorneys to provide comprehensive advice on the wide-reaching issues facing health care providers looking to navigate the ACO framework.
Ober|Kaler's ABCs of ACOs
ACO development and operation can raise significant legal issues under the antitrust laws. ACOs will require integration and consolidation among competing providers as they contract with payors, raising possible price-fixing, market power, merger and market exclusion issues. The FTC/DOJ Antitrust Policy Statement regarding ACOs participating in the Shared Savings Program explains how those agencies will assess the antitrust ramifications of ACOs.
The Ober|Kaler ACO Team antitrust attorneys have advised health care clients on these and other complex antitrust matters for years. Ober|Kaler is the only law firm in the country to obtain favorable FTC Staff Advisory Opinions on behalf of clinically integrated physician networks. In addition, Ober|Kaler attorneys have represented numerous provider contracting networks -- IPAs, PPOs, and PHOs -- before the FTC, DOJ and State Attorney General Offices.
Fraud and Abuse
In the interim waiver rules published by CMS and OIG, CMS and OIG have provided five broad waivers to encourage the development of ACOs while ensuring protection of Medicare patients and program funds. The waivers cover the Stark Law, Antikickback Statute, the civil money penalty prohibition against payments from hospitals to physicians to reduce or limit care (commonly referred to as the “gainsharing” law) and the CMP for beneficiary inducements. While the waivers are effective upon publication in the Federal Register, CMS and OIG have asked for comments in a number of sections. The Ober|Kaler ACO Team is well versed in these rules and can assist in compliance with the waiver requirements.
Governance and Corporate Structure
The Ober|Kaler ACO Team includes attorneys with extensive experience in corporate transactions and physician and provider contracting. Their experience includes not only matters relevant to the formation of the appropriate legal entity, but also the transactional and business aspects of physician and provider contracting. The ACO Team understands the breadth of potential models for ACOs and alternative models to assist in determining the best structure for each provider. Regardless of the structure, ACOs must establish shared governance to meet the requirement of true care integration.
Information Technology, EHR and Privacy
An ACO’s level of investment in electronic health records will determine its success and its ability to capture and share information for care coordination, quality and revenue cycle purposes. This reliance on electronic medical information gives rise to a host of privacy and information technology challenges. In the future, data driven dashboards will address quality issues at the point of care, care will be provided through virtual visits with physicians, and patients will access their records through patient portals. The sharing of patient information will need to comply with privacy requirements, including opt-out provisions.
Long Term Care
A key part of ACO operations is the effective discharge of patients from an acute care setting and initiatives to reduce readmissions. The Ober|Kaler ACO Team includes long term care attorneys with an in-depth understanding of the operations of rehabilitation facilities, skilled nursing facilities and other residential long-term care settings as well as home health agencies and home- and community-based services. The ACO Team understands the interaction among such long-term care entities and acute care hospitals and community physicians. Their knowledge extends beyond avoiding “never events” and other adverse events to the broader consideration of care transitions. The long-term care attorneys on the ACO Team advise the full spectrum of post acute care providers and include attorneys with government experience in the regulatory environment, reimbursement and compliance issues as well as attorneys with clinical backgrounds. The Ober|Kaler ACO Team can guide the integration of long-term care organizations into ACO structures and other related programs.
Medical Staff Bylaws and Credentialing
Medical staff bylaws and the credentialing process will need to address the consequences for under-performers in an ACO. The Ober|Kaler ACO Team can assist with shared credentialing issues, revision of the medical staff bylaws and due process hearings, among other issues that may arise when ACOs work within and outside an employment model.
The Ober|Kaler ACO Team includes former in-house counsel and experienced health care transactional attorneys with a wealth of knowledge of the business and operational issues of health care entities. The ACO Team understands and can assist with the operational issues that will face ACOs as they attempt to integrate often separate facilities, infrastructure and ancillary services into the new ACO structure. These members can assist with strategic planning as providers wrestle with new opportunities to participate in incentive programs and position themselves in the market.
Hospitals and physicians currently collaborate through a variety of methods: employment, committees, co-management, medical director arrangements and joint ventures. Under PPACA, physicians and hospitals are eagerly coming to the table to determine how best to partner in this new age of health care. Primary care physicians will be at the forefront of providing care management and medical home for patients. The use of nurse practitioners and physician assistants will likely increase, as the need for providers to coordinate care of patients will be critical to the success of ACOs. The Ober|Kaler ACO Team can review the potential ACO structures and determine the best model for each ACO based on the particular relationship among the providers and other entities seeking to form and operate an ACO.
Quality, Peer Review and Evidenced-Based Medicine
The main goal of PPACA is to “improve the coordination, quality and efficiency of health care” as well as health outcomes. PPACA incentivizes providers to improve quality and to find new ways to change patient outcomes based on evidenced-based protocols. ACOs must be structured to monitor quality matrix and measurements and effectively address concerns as they arise. Public quality report cards now are a part of hospitals’ everyday operations. Under the ACO program, the focus again will be on indicators and transparency. Freedom of choice is a key theme in ACOs and programs adopted by the CMS Innovation Center. ACOs must improve the health of their patients and will need to adapt to more stringent quality standards or they will leave money on the table. At the same time, the sharing of quality information within ACOs will be critical to their success. ACOs must balance the need to share information and improve quality with the peer review laws that encourage open discussion of clinical outcomes of particular physicians and providers in a privileged setting. The Ober|Kaler ACO Team includes attorneys who are well-versed in peer review issues and experienced in advising providers and other health care entities on quality initiatives.
ACOs must understand the shared savings model as well as other payment models permitted by the ACO regulations. To receive a shared savings payment in a given year, an ACO’s estimated average per capita Medicare expenditures must fall below a benchmark and by a percentage amount established by the Secretary in the ACO regulations. Providers must apply to one of two reimbursement tracks. One track is at risk for part of program period with greater reimbursement opportunities, while the other contains no at risk component. The Ober|Kaler ACO Team can assist ACOs in analyzing and assessing the different shared savings options.
Ober|Kaler’s ACO Team includes attorneys formerly with the Internal Revenue Service and attorneys who worked in-house for tax-exempt health care entities. The ACO Team understands the formation and operation of tax-exempt entities and the requirements for obtaining and maintaining tax-exempt status. The ACO Team provides advice to ACOs in determining the best structure between for-profit and tax-exempt entities, with a particular focus on the impact such relationships might have on tax-exempt status. As with most transactions between for-profit and tax-exempt providers and other entities, ACOs must be structured in a way to avoid challenges to their tax-exempt status.
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