Category — Physicians

On November 14, 2011, the Supreme Court announced that it will hear challenges related to the Affordable Care Act (ACA) during its spring term. The Court has chosen to address four specific issues with respect to legal challenges of the health reform law:

(1) the constitutionality of the law’s requirement that all individuals purchase insurance (i.e., the Minimum Essential Coverage provision, also referred to as the individual mandate);

(2) whether the Anti-Injunction Act, a law which requires individuals to refrain from suing the federal government for the imposition of a tax until after the tax has been paid, bars a pre-enforcement challenge to the individual mandate until 2014 when the provision goes into effect;

(3) the constitutionality of the law’s Medicaid expansion requiring states to provide coverage to all adults under 65 with household incomes below 133 percent of the poverty level; and

(4) the issue of severability, as the Court must determine whether the law must be struck down in its entirety if one of the provisions is found unconstitutional, or whether that provision may be removed while the remainder of the ACA remains intact.

An extraordinary five-and-a-half hours for oral arguments have been granted: two hours on the constitutionality of the individual mandate, 90 minutes on the issue of severability, one hour on whether the Anti-Injunction Act bars some or all of the challenges to the insurance mandate, and one hour on the constitutionality of the Medicaid expansion.  Observers speculate that the arguments will be held in March and a decision may be issued by the Court by late June, well in advance of the 2012 Presidential election.

The Centers for Medicare & Medicaid Services (CMS) published the Accountable Care Organization (ACO) final rule in the Federal Register on Wednesday, November 2.  CMS also published the notice regarding the ACO “Advance Payment Model” and the interim final rule with comment period regarding fraud and abuse waivers applicable to certain arrangements involving ACOs.  The deadline for submitting comments to CMS on the fraud and abuse waiver interim final rule is 5:00 pm on January 3, 2012.

Click here to see Akin Gump’s updated analysis of the ACO final rule, which includes new discussions of the Statement of Antitrust Enforcement Policy jointly issued by the Federal Trade Commission and Antitrust Division of the Department of Justice and the guidance for tax-exempt ACO participants issued by the Internal Revenue Service.

Click here to see Akin Gump’s preliminary analysis of the Medicare Shared Savings Program final rule. We anticipate that the final rule will be published in the Federal Register on November 2nd. In addition, the final rule indicates multiple areas where the Centers for Medicare & Medicaid Services (CMS) anticipates releasing subregulatory guidance. We will provide additional information as it becomes available.

On October 20, 2011, the Centers for Medicare & Medicaid Services (CMS) released a final rule on the creation of Accountable Care Organizations (ACOs).  The final rule implements provisions of the Affordable Care Act that require the Secretary of Health and Human Services (HHS) to establish a Medicare Shared Savings Program, and follows from a proposed rule issued by CMS on April 7, 2011.  CMS received approximately 1,320 public comments on the ACO proposed rule.  According to the agency, the final rule includes “significant modifications” from the proposed rule that are intended “to reduce the burden and cost for participating ACOs.”  These modifications include: 

• greater flexibility in eligibility to participate in the Shared Savings Program;
• multiple start dates in 2012;
• establishment of a longer agreement period for those starting in 2012;
• greater flexibility in the governance and legal structure of an ACO;
• simpler and more streamlined quality performance standards;
• adjustments to the financial model to increase financial incentives to participate;
• increased sharing caps;
• no down-side risk and first-dollar sharing in “Track 1”;
• removal of the 25 percent withhold of shared savings;
• greater flexibility in timing for the evaluation of sharing savings (claims run-out reduced to 3 months);
• greater flexibility in antitrust review;
• greater flexibility in timing for repayment of losses; and
• additional options for participation of Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs).

In connection with the ACO final rule, CMS and the HHS Office of Inspector General released an interim final rule with comment period establishing waivers of the Physician Self-Referral Law (“Stark law ”), the Anti-Kickback Statute, and certain civil monetary penalty law provisions to specified arrangements involving ACOs.  The Federal Trade Commission and Antitrust Division of the Department of Justice also issued a “Statement of Antitrust Enforcement Policy” regarding ACOs and the Internal Revenue Service issued a notice concerning tax-exempt organizations.    

Simultaneously, the Center for Medicare & Medicaid Innovation announced an ACO advanced payment model.  This model is intended for organizations, including rural and physician-led ACOs, in need of capital to make the necessary investments to coordinate care.  Additional information is available at http://www.innovations.cms.gov/documents/payment-care/APACO_Solicitation_10_20_11_Compliant1.pdf.

We will provide additional updates on the contents of the ACO final rule and related documents shortly.

On October 17^th, the Innovation Center announced a new initiative – the Innovation Advisors Program.  Innovation Advisors will support the Innovation Center in testing new models of care delivery, use their knowledge and skills in their organization in pursuing the three-part aim, work with local organizations and groups to drive delivery system reforms, and gather new ideas for possible testing or diffusion by the Innovation Center.  The Innovation Advisors Program consists of face-to-face national and regional meetings, training sessions, seminars, presentations by subject matter experts and individual coaching.  Innovation Advisors will partake in a dialogue between their home organization and the Innovation Center.  A fellowship stipend of up to $20,000 is available to support the activities of individuals selected for the program.  The Applications are due November 15th.  Additional information, including the application, is available at http://www.orise.orau.gov/IAP/index.html.  It is anticipated that CMS will select approximately 200 individuals to participate in this program.

Today, the Office of Management and Budget (OMB) received the long-awaited Medicare Shared Savings Program: Accountable Care Organization (ACO) final rule.  Observers speculate that this means that the rule could be made publicly available very soon.  The Affordable Care Act requires that the ACO program be established no later than January 1, 2012.

On September 28, 2011, the Center for Medicare & Medicaid Innovation announced a request for applications for the Comprehensive Primacy Care initiative, a program focusing on improving collaboration between public and private health payers in the primary care arena.  The initiative will test two models: 1) a service delivery model that promotes care coordination and 2) a payment model that would pay selected primary care practices monthly care management fees for their Medicare fee-for-service beneficiaries; providers may then share in any Medicare savings generated by the model while still receiving compensation from private insurers.   CMS anticipates that five to seven models will be tested across the country.  The Innovation Center is accepting letters of intent from public and private payers through November 15, 2011.  All final application must be received before January 17, 2012. 

 Solicitation – http://innovations.cms.gov/documents/pdf/cpc_initiative_solicitation.pdf

On August 23, 2011, the Center for Medicare & Medicaid Innovation (Innovation Center) announced a new initiative regarding bundled payments for care improvement.  The new bundled payment models combine payments for physician, hospital, and other provider services into a single, predetermined payment amount for all services furnished to a beneficiary during a defined episode of care.  The Innovation Center offers four different payment models for interested applicants.  Akin Gump has put together a Comparison of Bundled Payment Models Chart comparing some of the features of each of these models.  Further detail is available in the full request for applications (RFA), available at the Innovation Center website: http://innovations.cms.gov/documents/payment-care/Request_for_Applications.pdf.

Important Dates

Entities interested in applying for any of these models should note the following program deadlines:

Model 1

• Interested organizations must submit a non-binding letter of intent by September 22, 2011
• Applications must be submitted to the Innovation Center by October 21

Models 2-4

• Interested organizations must submit a non-binding letter of intent by November 4, 2011
• Organizations who want to be considered for receipt of data must submit a Research Request Packet containing specific information about their study design (including how they will use data to construct an episode definition and develop care episode redesign protocols) by November 4, 2011
• Potential applicants must also submit a Data Use Agreement by November 4, 2011
• Applications must be submitted by March 15, 2012

The Department of Justice (DOJ) and the Federal Trade Commission (FTC) (together, “the antitrust agencies”) have raised as many antitrust questions as they have answered with their March 31, 2011, Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program (“Policy Statement”).  Although the Policy Statement is styled as a mere statement of antitrust enforcement policy for accountable care organizations (ACOs), similar to earlier enforcement statements, in fact it is issued in support of a proposed regulation from the Centers for Medicare & Medicaid Services (CMS), regarding the Medicare Shared Savings Program and ACO provisions of the Patient Protection and Affordable Care Act (PPACA).  As such, the antitrust agencies clearly have taken on a much more significant role in the regulatory review process of a sister agency than previously.  That regulatory entanglement can be seen in provisions of the Policy Statement that attempt to reconcile the contradictory goals of reducing antitrust uncertainty for ACOs in order to facilitate participation in the Medicare Shared Savings Program, while sending a strong enforcement message that the antitrust agencies will not tolerate ACOs that acquire the ability to exercise market power in commercial markets.  The results are highly technical rules intended to allow ease of application, but which, as discussed below, raise many questions as to their meaning and likely application.  Comments on the proposed Policy Statement are due on or before May 31, 2011, which is within 60 days of publication in the Federal Register.

Purpose of Antitrust Review of ACOs

Although the antitrust agencies published their Policy Statement as a separate document for notice and comment, CMS provided its own explanation for the role of antitrust review in the Medicare Shared Savings Program.  In CMS’ proposed rule, it identified three reasons for its incorporation and reliance on the antitrust agencies’ Policy Statement:  (i) ACOs that do not face significant antitrust risk are likely to complete the three-year commitment that CMS requires without disruption of the program due to antitrust challenge, (ii) ACO-versus-ACO competition is likely to improve the clinical quality of care that Medicare beneficiaries receive and (iii) ACOs exercising market power in the private market are likely to prefer private pay patients over Medicare patients and, thus, to limit access by Medicare patients to their services.  The antitrust agencies, in turn, explained that they issued their Policy Statement “to maximize and foster opportunities for ACO innovation” and “both to clarify the antitrust analysis of newly formed collaborations among independent providers  . . . and to coordinate the antitrust analysis with the CMS.”  [Read more →]

On March 31, 2011, the Centers for Medicare & Medicaid Services (CMS or the “Agency”), along with several other federal agencies, released a long-awaited proposed rule and other notices that would implement the Medicare Shared Savings Program and Accountable Care Organization (ACO) provisions of the Patient Protection and Affordable Care Act (PPACA). The proposed ACO regulations and policies are contained in four separate documents: (1) a CMS proposed rule establishing ACOs; (2) a Department of Health and Human Services Office of Inspector General/CMS notice with comment period proposing waivers for the Anti-Kickback Statute, the Physician Self-Referral Law (the “Stark Law”) and certain provisions of the Civil Monetary Penalties law; (3) a Federal Trade Commission/Department of Justice proposed statement of antitrust enforcement policy for ACOs; and (4) an Internal Revenue Service request for comments addressing guidance for tax-exempt organizations participating in the program. This health reform update gives a preliminary analysis of CMS’s proposed rule. The other three publications are reviewed in separate updates prepared by members of Akin Gump’s ACO team.

Although the CMS proposed rule has only been issued in draft form, publication in the Federal Register is expected on or around April 7, 2011. Comments on the rulemaking must be submitted to CMS within 60 days of publication.

Health industry stakeholders highly anticipated the release of this rule and early CMS estimates indicate that 1.5 to 4 million beneficiaries would be assigned to ACOs in the first three years of the program (as compared to 45 million beneficiaries who have traditional fee-for-service (FFS) Medicare coverage). This estimate reflects only those enrolled in the Medicare Shared Savings Program; additional individuals are anticipated to be enrolled in commercial and Medicaid ACOs. In press conferences and releases surrounding the announcement of the proposed rule, CMS appears confident that the ACO Shared Savings Program will incent providers to furnish coordinated and efficient care and ultimately lower costs throughout the health care delivery system. Summarized below are some noteworthy takeaways from the ACO proposed rule.

[Read more →]