Firm News & Legal Alerts

Thursday, March 31, 2011

Proposed Regulations for the Medicare Shared Savings Program

On March 31, 2011, CMS issued the much anticipated proposed regulations for the Medicare Shared Savings Program: Accountable Care Organizations (“ACO”), in accordance with the requirements of the Affordable Care Act (“Health Reform”) (Proposed ACO Regs Fed Reg). The four-hundred plus page proposed regulations set forth the rules for implementation of ACO’s in the Medicare program. The purpose of the regulations is to encourage and set forth the framework for the creating of ACO’s for the stated purpose of “promoting accountability” for a set of Medicare patients in a population, while coordinating care and thereby decrease costs and increasing quality. Costs and quality would be monitored for a three-year period at the end of which if certain goals are met the provider would receive an incentive/bonus payment. What this all means is yet to be determined and it could be some time before the final regulations are issued as there are numerous interested parties who we expect will submit substantive comments; including the AHA, insurance payors, and the AMA to name a few. What we do know is that ACO’s have the potential to forever change the healthcare delivery and reimbursement models as we know them. The public comment period for the proposed regulations ends on June 6, 2011.

Also on March 31, 2011, CMS issued a request for public comment entitled, “Waiver Designs in Connection with the Medicare Shared Savings Program and the Innovation Center” (Proposed ACO Fraud & Abuse Waivers Fed Reg). This notice for comment deals with applications for waivers of the Stark Law and Anti-Kickback Statute regarding financial arrangements for ACOs.  The public comment period ends on June 6, 2011.

In light of CMS’ issuance of the proposed ACO regulations, also released on March 31, 2011, were the Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“DOJ”), “Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program” (“FTC/DOJ ACO Statements”).  Significantly, the FTC/DOJ ACO Statements provide that an ACO approved for the shared savings program with CMS would be reviewed for antitrust purposes under the rule of reason test. In addition, the FTC/DOJ ACO Statements set forth certain safety zones, which if an ACO falls into such zones they would not, absent extraordinary circumstances, be subject to antitrust enforcement proceedings by the agencies. The public comment period for the proposed policy ends on May 31, 2011.


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