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From Health Law Daily, October 29, 2015

CMS extends a favor to ACOs who savor fraud waivers

By Bryant Storm, J.D.

CMS finalized Medicare Shared Savings Program (MSSP) waivers for accountable care organization (ACO) arrangements that, without a waiver, might violate the physician self-referral law, the federal anti-kickback statute, or the civil monetary penalties (CMP) law. The waivers are designed to address concerns that certain restrictions on referrals in the Medicare program run the risk of hindering the development of innovative care arrangements under the MSSP (Final rule, 80 FR 66726, October 29, 2015).

MSSP.  Section 1899 of the Social Security Act (SSA), as added by section 3022 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111–148), developed the MSSP to “promote accountability for a Medicare patient population, coordinate items and services under Parts A and B, and encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery.” A key component of the program is ACOs—organizations designed to reduce the frequency of fragmented or unnecessary care.

Fraud. The physician self-referral law or Stark law, under section 1877 of the SSA, and the federal anti-kickback statute, at section 1128B(b) of the SSA, reduce fraud in the Medicare program by restricting referrals and inducements. The Civil Monetary Penalties (CMP) provisions, at sections 1128A(b)(1) of the SSA, provide sanctions for fraud, improper referral payments, unnecessary utilization, underutilization, and other harms.

Waiver. Due to the way that the MSSP requires providers to coordinate care through combinations like ACOs, some stakeholders expressed concerns that the fraud and abuse laws “impede some of the innovative integrated-care models” envisioned by the MSSP. However, section 1899(f) of the SSA authorizes HHS to waive the fraud statutes as necessary to carry out the MSSP. A 2011 Final rule (76 FR 19655) established waivers of the application of certain provisions of the physician self-referral law, the federal anti-kickback statute, the Gainsharing CMP, and the Beneficiary Inducements CMP (see Fraud and abuse laws waived for ACO-related arrangements, November 4, 2011). Those waivers were set to expire on November 2, 2014. In an October 17, 2014, Final rule (79 FR 62356), CMS extended the effectiveness of those waivers through November 2, 2015 (see ACO waivers get one year extension, October 17, 2014).

Continuation. Following stakeholder input and CMS’ experience with administration of the MSSP, as the expiration of the waivers approaches, CMS deemed it “necessary to continue to waive the physician self-referral law, the federal anti-kickback statute, and the Beneficiary Inducements CMP in certain circumstances” in order to carry out the MSSP. However, CMS decided that it is no longer necessary to waive the Gainsharing CMP.

Gainsharing. Section 512(a) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114–10) made changes to the Gainsharing CMP “so that it prohibits hospitals from knowingly making payments, directly or indirectly, to induce physicians to reduce or limit ‘medically necessary’ services provided to Medicare or state health care program beneficiaries under the physician’s direct care.” After the statutory change, arrangements between hospitals and physicians to incentivize greater efficiency and reduce waste, which previously would have violated the gainsharing CMP, now do not implicate that provision so long as the arrangement does not limit medically necessary care. Accordingly, CMS determined that a waiver of the Gainsharing CMP is no longer necessary to carry out the MSSP.

MainStory: TopStory FinalRules ACONews CMSNews AntikickbackNews EmploymentNews HealthReformNews PaymentNews PartANews PartBNews ProgramIntegrityNews ProviderNews StarkNews FraudNews

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