Category — Physicians

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 →]

On March 31, 2011, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule establishing accountable care organizations (ACOs) under the Medicare Shared Savings Program pursuant to provisions of the Patient Protection and Affordable Care Act (PPACA). CMS and the Department of Health and Human Services (HHS) Office of Inspector General (OIG) also jointly released a notice and solicitation of public comments (the Notice) regarding the waiver of certain federal fraud and abuse laws in connection with the Medicare Shared Savings Program.

Anticipating that the Medicare Shared Savings Program would potentially implicate fraud and abuse laws, Congress included a provision in the PPACA that grants the Secretary of HHS the authority to waive the application of certain fraud and abuse laws “as may be necessary” to implement the program. [1]   The fraud and abuse laws addressed by the proposed waivers are the Physician Self-Referral Law (the “Stark Law”),[2] the federal Anti-Kickback Statute,[3] and a provision of the Civil Monetary Penalties law (CMP Law), the so-called Gainsharing CMP, that prohibits a hospital from making a payment directly or indirectly to induce a physician to reduce or limit services to Medicare and Medicaid beneficiaries.[4] Industry stakeholders have expressed concerns that without such waivers the establishment and operation of ACOs would necessarily involve the creation of financial relationships between physicians and hospitals and other individuals and entities that would otherwise be restricted or prohibited by these laws.

The Notice sets forth three proposed waivers and solicits comments on a number of related issues. To be eligible for waivers from the fraud and abuse laws, an ACO must enter into a formal agreement with CMS to participate in the Medicare Shared Savings Program and the ACO, ACO participants and ACO providers/suppliers would be required to comply with the various ACO requirements found in Section 1899 of the Social Security Act[5] (as promulgated by the PPACA) and the ACO implementing regulations, including the requirements regarding transparency, reporting and monitoring.

The requirements for the proposed waivers are set forth below—

Consistent with its annual regulatory cycle, CMS issued the 2011 final  Medicare Physician Fee Schedule (PFS) and Outpatient Prospective Payment System (OPPS) rules on November 2, 2010.  The rules will be published in the Federal Register on November 29, 2010.  The final rules implement key elements of health care reform legislation, as well as other changes to physician and OPPS payment for the coming year.

Two key issues dominate discussions of the 2011 final PFS: 1) the implementation of certain health care reform provisions; and 2) the impact of the Sustainable Growth Rate (SGR) payment adjustment.  Additionally, the 2011 final PFS rule addresses the following important areas:

• codes and reimbursement rates for all Medicare Part B physician services;
• changes to the Medicare Economic Index (MEI) and Geographic Practice Cost Index (GPCI) methodology;
• Medicare Part B payments for drugs and drug administration services;
• the Physician Quality Reporting System (PQRS), formerly called the Physician Quality Reporting Initiative (PQRI); and
• the Electronic Prescribing (E-Prescribing) Incentive Program.

The final OPPS rule implements the following key health care reform provisions:

• Provides reductions to the OPPS market basket update
• Establishes the following conditions for Medicare reimbursement:
  • Community mental health centers (CMHCs) must have a minimum percentage (40%) of non-Medicare patients, and
  • CMHCs and hospitals cannot provide home care services through partial hospitalization programs
  • Eliminates beneficiary cost-sharing for certain Medicare-covered preventive services
  • Establishes a floor on the wage index adjustment to payments for hospital outpatient services furnished in certain designated states (Montana, Nevada, North Dakota, South Dakota and Wyoming)
  • Authorizes the redistribution of unused medical residency positions for purposes of determining Medicare payment and permits time spent in non-patient activities to count toward the determination of full-time equivalency (FTE) for graduate medical education (GME) and indirect medical education (IME) payment purposes
  • Limits physician referrals to a hospital where the physician has an ownership or investment interest

On November 10, 2010, the Centers for Medicare & Medicaid Services published a Notice in the Federal Register soliciting comments on Accountable Care Organizations.  The Notice specifically requests that interested parties comment on various areas including the following:

• Policies to ensure that solo and small practice providers may participate in ACOs;
• Beneficiary attribution to the ACO;
• Methods to assess beneficiary experience within the ACO;
• Patient-centeredness criteria for assessment of ACOs;
• Quality measures that should be used in the ACO program; and
• Other payment methodologies should be tested through the Centers for Medicare & Medicaid Innovation

Comments must be submitted to the agency by December 3, 2010.

The Congressional Research Service has released another report, dated November 3, 2010, focusing on the Medicare provisions in the health care reform laws.  This new report, which is entitled Medicare Provisions in the Patient Protection and Affordable Care Act (PPACA): Summary and Timeline, outlines the numerous reform provisions impacting the Medicare program and provides a detailed chart listing the effective dates of such provisions.  Notably, the CRS report highlights the growing tension regarding the treatment of any Medicare savings under the reform law – should the savings be considered to be funding sources for the expansion of health care or should such savings be directed towards shoring up the Medicare program’s trust fund.  Finally, the report addresses findings made by both the Congressional Budget Office and the CMS, Office of the Actuary that some of the Medicare payment reductions are likely not sustainable in the long terms and could actually result in reduced quality of care and access to services.  The 143-page report can be found here.

On Thursday, September 23, 2010, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule outlining how it intends to implement several of the new anti-fraud measures called for under PPACA.  According to CMS Administrator Donald Berwick, these measures are part of the government’s efforts to take a proactive approach to fraud prevention, by preventing improper payments before they are made as opposed to seeking to recoup monies improperly paid.  The proposed rule addresses the following measures:

• Screening for new providers and suppliers, including licensure checks, database checks, unannounced site visits, and, for “high risk” entities such as certain home health providers and durable medical equipment suppliers, criminal background checks;
• $500 application fee for institutional providers;
• Six-month moratorium on enrollment where necessary; and
• Suspension of payments pending “credible” allegations of fraud, which could include complaints to CMS, the Department of Health and Human Services Office of Inspector General, or other law enforcement.

Under PPACA, these new measures are scheduled to take effect March 23, 2011, and will apply to new provider and supplier applicants, as well as renewal applicants.  CMS is accepting comments on the proposed rule through November 16, 2010.

On October 5, 2010, the Centers for Medicare & Medicaid Services, the HHS Office of the Inspector General and the Federal Trade Commission (FTC) will co-host a workshop on issues related to Accountable Care Organizations (ACOs). The workshop will address the legal issues presented by various ACO models.

The deadline for comments to be submitted for inclusion in the workshop is September 27, 2010. Instructions on how to submit comments and how to register for the event are provided in the Federal Register Notice.

On July 2, 2010, CMS issued for display its Proposed Rule entitled “Medicare Program; Proposed Changes to the Hospital Outpatient Prospective Payment System and CY 2011 Payment Rates.”  This Proposed Rule, which is expected to be published in the Federal Register on August 3, 2010, would implement key provisions of the health reform legislation that waive Medicare beneficiary cost-sharing for preventive services, reduce the 2011 hospital fee schedule update payment by 0.25 percentage points, and revise certain physician self-referral and graduate medical education program policies as well as proposing updates to payments and policies for certain outpatient department services.  Comments will be accepted by CMS through August 31st, with the Final Rule expected out on November 1st.  The policies contained in the rules are applicable for services furnished on or after January 1, 2011.

The rule can be found here.

The Centers for Medicare & Medicaid Services (CMS) will delay its requirement that Medicare contractors automatically reject claims for health services, durable medical equipment, prosthetics, orthotics, and supplies, and certain other items and services based on orders or certifications from physicians and other eligible professionals who are not enrolled in the Medicare Provider Enrollment, Chain and Ownership System (PECOS).  The Patient Protection and Affordable Care Act  permits only Medicare-enrolled providers to certify or order such items and services under Medicare Part B.  CMS issued an Interim Final Rule in May 2010 that would have allowed Medicare contractors to automatically reject, starting on July 6, 2010, claims based on orders from providers not enrolled in PECOS.  Due to providers’ reports of problems with enrollment, however, CMS will delay the automatic rejection procedures.  Other provisions of the regulations will go into effect on July 6, 2010.  Providers should not see any change in the processing of submitted claims until the automatic rejection procedures are operational.

Click here for the CMS Press Release.