In conjunction with the issuance of the final rules related for Accountable Care Organizations (“ACOs”) under the Medicare Shared Savings Program, the OIG published an interim final rule establishing waivers to fraud and abuse laws in connection with the Shared Savings Program.
The waivers were created to address industry concerns that restrictions in certain laws aimed at preventing fraud and abuse of federal health care programs, i.e., the Physician Self-Referral law (commonly known as the “Stark Law”), the federal anti-kickback statute (“AKS”), and the federal civil monetary penalties (“CMP”) law, would limit or otherwise impede development of innovative integrated care models envisioned by the Shared Savings Program. The goal of the waivers is to effectively balance the need for ACO innovation and flexibility in the Shared Savings Program while protecting beneficiaries and the Medicare program.
The interim final rule establishes five waivers to the fraud and abuse laws which CMS and the OIG deemed necessary to carry out provisions of the Shared Savings Program. Parties seeking to ensure that an arrangement is covered by a waiver for a particular law may look to any waiver that applies to that law. An arrangement may meet the criteria of more than one waiver.
Key Points/General Overview:
- To qualify for a waiver, the arrangement must meet all of the conditions set forth in the waiver.
- A waiver of a specific fraud and abuse law is not needed for an arrangement to the extent that the arrangement: (1) does not implicate the specific fraud and abuse law, or (2) implicates the law, but either fits within an existing exception or safe harbor, as applicable, or does not otherwise violate the law. Arrangements that do not fit a waiver have no special protection and must be evaluated on a case-by-case basis for compliance. Failure to fit in a wavier is not, in and of itself, a violation of the fraud and abuse laws.
- For purposes of the waivers, “reasonably related to the purposes of the Shared Savings Program” means the purposes of promoting accountability for the quality, cost, and overall care for a Medicare population; managing and coordinating care for Medicare fee-for-service beneficiaries through an ACO; and encouraging investment in infrastructure and redesigned care processes for high quality and efficient service delivery for patients, including Medicare beneficiaries.
- CMS, OIG, and HHS will closely monitor ACOs entering into the program in 2012 through June 2013, and plan to narrow the waivers if they result in the unintended effect of shielding abusive arrangements. The waivers could be narrowed by modifying the waivers to add or substitute conditions to the waivers; limiting ACO arrangements involving referral sources to those that are fair market value or commercially reasonably or involve services performed by the referral sources; preclude waiver protections for arrangements that involve individuals or entities that are not part of the ACO; or include a requirement that ACOs submit reports regarding their arrangement. CMS and the OIG seek comments on these approaches to narrow the waivers.
Detailed summaries of the five waivers are provided below:
“ACO Pre-Participation” Waiver. This waiver of the Stark Law, the AKS, and the gainsharing CMP applies to ACO-related start-up arrangements in anticipation of participation in the Shared Savings Program, but which pre-date an ACO’s participation agreement.
- The parties must act with the good faith intent to develop an ACO that will participate in the Shared Savings Program starting in a particular year, must submit a completed application to participate in a Shared Savings Program for that year, and must be taking diligent steps to develop an ACO.
- The ACO’s governing body must make a bona fide determination that the arrangement is reasonably related to the purposes of the Shared Savings Program.
- Certain documentation of the arrangement must be maintained for at least 10 years following completion of the arrangement and made available to HHS upon request.
- An ACO may use the pre-participation waiver (including any extensions granted) only one time.
- As used in the waiver, “start-up arrangement” means any items, services, facilities, or goods (including non-medical items, services, facilities, or goods) used to create or develop an ACO that are provided by such ACO, ACO participants, or ACO providers/suppliers. Commentary on the waiver provides a non-exhaustive list of examples of items, services, facilities and goods considered as start-up arrangements.
- The start and end dates for when the waiver applies varies based on the ACO’s target year, whether an ACO’s participation application is accepted or denied, whether the ACO failed to submit an application for the target year, and whether the ACO was granted an extension of the waiver.
- This pre-participation wavier does not cover arrangements involving drug and device manufacturers, distributors, DME suppliers, or home health suppliers.
“ACO Participation” Waiver. This waiver of the Stark Law, the AKS, and the gainsharing CMP applies to ACO-related arrangements during the term of the ACO’s participation agreement under the Shared Savings Program and for a limited time thereafter.
- The ACO must have entered into a participation agreement and remain in good standing under its participation agreement.
- The ACO’s governing body must make a bona fide determination that the arrangement is reasonably related to the purposes of the Shared Savings Program.
- Certain documentation of the arrangement must be maintained for at least 10 years following completion of the arrangement and made available to HHS upon request.
- The waiver period starts on the start date of the participation agreement, and ends six (6) months following the earlier of the expiration of the participation agreement (including any renewals thereof) or the date on which the ACO has voluntarily terminated the participation agreement. If CMS terminates the participation agreement, the waiver period ends on the date of the termination notice.
“Shared Savings Distribution” Waiver. This waiver of the Stark Law, the AKS, and the gainsharing CMP applies to distributions and uses of shared savings payments earned under the Shared Savings Program. The waiver permits shared savings to be distributed or used with the ACO in any form or manner, including “downstream” distributions or uses of shared savings funds between or among the ACO, its ACO participants, and its ACO providers/suppliers.
- The ACO must have entered into a participation agreement and remain in good standing under its participation agreement.
- The waiver applies to distributions and uses of shared savings earned during the term of the ACO’s participation agreement, even if the actual distribution or use of the shared savings occurs after expiration of the agreement. The waiver also applies to individuals or entities that were ACO participants and ACO providers/suppliers at the time the shared savings were earned, even if they are not part of the ACO at the time of the actual distribution.
- The waiver does not protect distributions of shared savings to referring physicians outside the ACO, unless those referring physicians are being compensation (using shared savings) for activities that are reasonably related to the purposes of the Shared Savings Program or were ACO participants or ACO providers/suppliers during the year in which the shared savings were earned by the ACO.
- Under this waiver, payments of shared savings distributions made directly or indirectly from a hospital to a physician are not made knowingly to induce the physician to reduce or limit medically necessary items or services to patients to patients under the physician’s direct care.
“Compliance with the Physician Self-Referral Law” Waiver. This waiver of the AKS and the gainsharing CMP applies to ACO arrangements that implicate the Stark Law but which meet an existing exception under the Stark Law.
- The ACO must have entered into a participation agreement and remain in good standing under its participation agreement.
- The financial relationship must be reasonably related to the purposes of the Shared Savings Program.
- The financial relationship must fully comply with an exception under the Stark Law, as set forth at 42 CFR §411.255 through 411.357.
- The waiver period begins on the start date of the participation agreement, and ends on the earlier of the expiration of the term of the participation agreement (including any renewals thereof) or the date on which the participation agreement has been terminated.
“Patient Incentive” Waiver. This waiver of the beneficiary inducement CMP and the AKS applies to medically related incentives offered by ACOs under the Shared Savings Program to beneficiaries to encourage preventive care and compliance with treatment regimes. More specifically, those fraud and abuse laws are waived with respect to items or services provided by an ACO, its ACO participants, or its ACO providers/suppliers to beneficiaries for free or below fair market value.
- The ACO must have entered into a participation agreement and remain in good standing under its participation agreement.
- There must be a reasonable connection between the items or services and the medical care of the beneficiary.
- The items or services must be in-kind, and must be either preventive care items or services, or advance certain clinical goals (i.e., adherence to a treatment regime, drug regime or follow-up care plan, or management of a chronic disease or condition).
- The waiver does not protect financial incentives to beneficiaries, such as waiving or reducing patient cost sharing amounts (i.e., co-payments or deductibles). (Note that the Shared Savings Program itself prohibits ACO, ACO participants, and ACO providers/suppliers from providing gifts or other remuneration to beneficiaries as inducement from receiving items or services from, or remaining in, an ACO.)
- The waiver also does not protect or the provision of free or below fair market value items or services by manufacturers or other vendors to beneficiaries, the ACO, ACO participants, or ACO providers/suppliers, including any discount arrangements between a manufacturer and an ACO.
- The waiver period begins on the start date of the participation agreement, and ends on the earlier of the expiration of the term of the participation agreement (including any renewals thereof) or the date on which the participation agreement has been terminated. However, a beneficiary may keep items received before the participation agreement expired or was terminated, and may receive the remainder of any service initiated before the participation agreement expired or was terminated.
For more information regarding the OIG’s fraud and abuse waiversor ACO’s in general contact Lee Kuo.
