PPACA Impact and Opportunities : Health Care Lawyer & Attorney : Epstein Becker Green Law Firm : Insurance & Costs : Health Reform Musings Blog

by René Y. Quashie and Lynn Shapiro Snyder

As the health care industry analyzes the recently released final rule and related guidance regarding the Medicare Shared Savings Program (“MSSP”) for accountable care organizations (“ACOs”), it is important for the industry to also pay attention to key deadlines related to initiatives being implemented by the Center for Medicare and Medicare Innovation (“CMMI” or “Innovation Center”) within the Centers for Medicare & Medicaid Services (“CMS”).

While the MSSP ACO initiative is a permanent Medicare program, CMMI is developing and promoting other initiatives—some related to the MSSP, others not—which should be part of any provider’s considerations related to the “Medicare Menu” of options now available to customize an entity’s Medicare payment methodologies. This alert will address a number of key Medicare initiatives currently under way at the Innovation Center and another to be implemented by the Center for Medicare within CMS.

To explore the MSSP and other value-based initiatives further, Epstein Becker Green will cohost the following webcast:

Healthcare Transformation Accelerates:
What Could the MSSP and Other Value-Based Purchasing
Initiatives Mean for Your Organization?
Webcast: Nov. 9, 2011, 1 pm ET

Epstein Becker Green, KPMG Healthcare, and the JHD Group invite you to join the fourth webcast in a series that will explore the new regulations and the broader implications of moving toward payment systems that reward enhancements to quality, cost, and access.

The 120-minute session, which will dedicate 30 minutes to Q&A, will focus on how organizations can begin to connect the dots from the final MSSP rule to accountable care organizations, the increasing movement across the industry to new quality and cost-based payment models, and the regulations' strategic and operational implications for care delivery systems.

Read the full alert here         Register for the webinar here 

by Patricia M. Wagner and Ross K. Friedberg

Among the criteria that the “Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program” (“Proposed Statement”) uses to evaluate an accountable care organization’s (“ACO’s”) risk of an antitrust challenge is the ACO applicant’s “market share” within each of its service lines. The market share is a measure of the share of services an ACO participant provides in its Primary Service Area (“PSA”) relative to other providers. The share of services that each ACO participant provides in its PSA is the key factor that the agencies are proposing to use for determining whether an ACO will receive “Safety Zone” protection from the antitrust laws or be subject to mandatory expedited review from the agencies in order to participate in the Medicare Shared Savings Program. To assist with the PSA analysis, we have provided in this alert a step-by-step description of the proposed method for calculating PSA shares as well as an illustration of the steps involved in calculating PSA shares.

Read the full alert online

by Patricia M. Wagner and Ross K. Friedberg

On April 19, 2011, the “Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program” (“Proposed Statement”) was published in the Federal Register. As noted in the Proposed Statement, the antitrust enforcement agencies (the Department of Justice Antitrust Division and the Federal Trade Commission issued the Proposed Statement in response to a perceived preference by potential accountable care organization (“ACO”) participants to operate in both the Medicare and commercial markets. In order to “maximize and foster opportunities for ACO innovation, the Agencies wish both to clarify the antitrust analysis of newly formed collaborations among independent providers that seek to become ACOs in the Shared Savings Program and to coordinate the antitrust analysis with CMS review of those ACO applications.” This alert provides an overview of the Proposed Statement.

Read the full alert online

by Shawn M. Gilman, Douglas A. Hastings, Mark E. Lutes, David E. Matyas, Lynn Shapiro Snyder, Carrie Valiant, Dale C. Van Demark, Patricia M. Wagner, and Lesley R. Yeung

On March 31, 2011, the Centers for Medicare & Medicaid Services ("CMS") released for public comment a much-anticipated Notice of Proposed Rulemaking implementing the voluntary Medicare Shared Savings Program ("Program") for accountable care organizations ("ACOs"). Also on March 31, the Office of Inspector General, along with CMS, released a Notice with Comment Period to solicit comments regarding proposed waivers from the federal health care program fraud and abuse laws for provider payments made in connection with the Program. On the same day, the Federal Trade Commission and the Department of Justice issued a Notice with Comment Period soliciting comments regarding a "Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program," and the Internal Revenue Service issued a notice outlining its analysis of tax-exempt organization participation in Medicare ACOs.  

Below, we link to the first alert in a series that will examine these regulatory issuances as well as future government pronouncements, including those currently being formulated by the Center for Medicare and Medicaid Innovation, which was established under the Patient Protection and Affordable Care Act to test innovative payment and service delivery models to reduce federal program expenditures.

Download the full alert (PDF)    Read the full alert online
 

by Douglas A. Hastings 

According to the Administrator of the Centers for Medicare & Medicaid Services (“CMS”), Dr. Donald M. Berwick, the long-awaited proposed regulations implementing the Medicare Shared Savings Program should be out soon. Given the incredible proliferation of policy, business, and legal thinking about accountable care organizations (“ACOs”) that has taken place since the passage of the Affordable Care Act (“ACA”) less than a year ago, CMS’s initial effort to describe a program of payment and delivery reform built around the ACO “model” will contribute importantly to the national dialogue on accountable care and will give providers a first look at CMS’s detailed requirements for the Medicare Shared Savings Program.

What, then, are some of the key issues that the regulations are likely to address by which we can evaluate the Medicare Shared Savings Program’s potential progress on the road to accountable care? The way CMS further defines ACOs and structures the Medicare Shared Savings Program, including possible risk sharing features, will not only ultimately determine the success of the Medicare ACO program but will also no doubt affect the shape of burgeoning ACO efforts at the state level for Medicaid programs and in the commercial market.

Download the full alert (PDF)    Read the full alert online
 

As the health care world awaits the Medicare Shared Savings Program regulations expected to be issued soon by CMS, below is a wish list for key attributes that I hope the regulations evidence:

1. Flexibility. 

 "Transforming health care everywhere starts with transforming it somewhere." I hope that CMS takes Atul Gawande's advice and avoids being too proscriptive in launching the Share Savings Program. To me, the biggest risk to the program is being deemed a failure for having gone down too narrow a path that turns out to be unsuccessful.

Useful approaches have been suggested for tiering ACOs and providing for related payment methodologies based on levels of ACO capability. If some form of risk sharing model is going to be included along with simple share savings, let's not at the outset go so far along the risk axis that many start-up but promising ACOs would be excluded. Flexibility will encourage positive experimentation and inclusiveness in the interest of learning over time.

2. Discipline.

 At the same time, the ACO regulations need to have teeth. Despite the ongoing policy debates about how to measure quality and value, we know enough now for CMS to provide strong minimum requirements that will separate ACOs that show real promise from those that do not. In order to qualify for bonus or risk-based payments, ACOs will need to demonstrate both the current capability and the future capacity to further the triple aim goals of accountable care--improved patient outcomes, patient satisfaction and cost efficiency.

Such evidence will then justify appropriate recognition and protection under the fraud and abuse laws and antitrust laws, among others. And the discipline must be ongoing and progressive--continued qualification and continued improvement. Failure to maintain such qualification must have consequences--both financial and legal.

3. Simplicity.

One of the risk factors in the success of the Medicare Shared Savings Program is that it will be too complicated to implement effectively. There are a million ideas out there about ACOs--regarding structure and governance, assigning beneficiaries, what measures to use, how to allocate savings, etc.

Failure to construct a manageable pathway and an understandable set of rules at the outset--for diverse providers to follow and for consumers to understand and embrace--will severely threaten the ultimate success of the program. It would be easy to try to do too much too fast due to the pressure to "bend the cost curve," among others. I hope that CMS keeps it simple, straightforward and understandable with achievable program goals.

4. Patience.

Even if the regulations evidence flexibility, discipline and simplicity, we will need to be patient. "We" means CMS, Congress, private payers, providers and consumers. This program is one component of a broader set of ideas relating to health care payment and delivery reform in both public and commercial settings. The overall goal is to achieve the triple aim stated above--or as CMS Administrator Berwick often puts it, "better care, better health and lower costs"--through a variety of means and over time.

The Affordable Care Act in its entirety encompasses new quality reporting requirements, value-based purchasing programs, bundling pilots, gainsharing demonstrations, readmissions penalties and other methods of "testing, testing." Not to mention the efforts of the new Center for Medicare and Medicaid Innovation. If the Medicare Shared Savings Program tries to do too much too quickly on its own and the goals are not measured and paced, it inevitably will be judged unfairly and will not make as helpful a contribution as it otherwise might.

5. Harmony.

Another word I might have chosen here is coordination, but coordination is a means to harmonizing the activities and impact of the relevant federal agencies involved in ACO implementation, the various payment and delivery reform components of the Affordable Care Act and the public and private sector initiatives in this arena. Is such harmony too much to hope for? Perhaps, but it should be a goal and it should be achievable over time.

CMS, OIG, FTC and DOJ already have evidenced coordination in the days before and following their October 5, 2010 public workshop on the antitrust issues and fraud and abuse issues related to ACOs. Coordinated guidance is reasonable to expect. The ACA explicitly allows for the coordination of ideas and best practices in accountable care efforts in connection with both governmental and commercial health care payment practices. It certainly is within the power of Secretary Sebelius and Administrator Berwick to harmonize the implementation of Sections 3021, 3022 and 3023 of the ACA, along with the many other provisions that relate to achieving accountable care.

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The ACO regulations should be out soon. They of course will constitute a start, not a finish. There will be much more work to be done. But my wish--and I am hopeful--is that they lay out a constructive and manageable pathway that fits with others in helping to advance the triple aim.

Doug Hastings

Now that we have sweeping new health care legislation, the Patient Protection and Affordable Care Act ("the Act"), let's look at the rollout of the accountable care provisions--i.e., those changes to the payment and delivery system that hold the most long-term promise of improving quality and cost-efficiency. They are discussed in my most recent article: "The Timeline for Accountable Care: The Rollout of the Payment and Delivery Reform Provisions in the Patient Protection and Affordable Care Act and the Implications for Accountable Care Organizations," published last week in the BNA's Health Law Reporter.  Click here to read the full article (PDF).

In my most recent article in the series I have been writing for the BNA's Health Law Reporter on payment and delivery system reform, accountable care organizations and bundled payments, I comment on where things are now that federal reform has stalled. The article, titled "Payment and Delivery System Reform: It's Only a Matter of Time," argues that changes in payment and delivery are on the horizon regardless of the pace of federal reform and that providers (and payers as well) should continue their efforts toward accountable care to meet the cost and quality challenges that are no less daunting today than they were a month ago. Please click here to view. I hope you find it of interest.

Although there are some big issues that remain unresolved, such as the "public plan" component, it appears that we will see reform legislation pass in 2009. Drafts of the legislation are being prepared now by various members of Congress and their staffs.

The focus on medical homes, physician hospital organizations and accountable care organizations is very real, as is the focus on payment reform, including bundled payments and other forms of capitation-like reimbursement. A key element of the debate relates to "how integrated" a provider organization will need to be to qualify for bundled payments. Can it be virtual? Can it be physician only or must a hospital be involved? What should be the role of private payors?

We wrestled with many of these questions in the 1990s, but there are new aspects now, greater data and organizational capabilities in both the purchaser and provider sectors and much more urgency to move forward with payment and delivery system reform to accompany legislation aimed at increasing access. 

One fear is that the access component will get done without payment and delivery system reform, causing costs to skyrocket and leading, potentially, to future cost controls. It is important that health care providers add their voices, individually and collectively, to this national debate. The making of major legislation is always messy, but there is real momentum right now. Whatever passes will inevitably be incomplete, and there will be unintended consequences.

For health care facilities, and those who invest in them or lend to them, the President’s budget underscored the emerging “shape of things to come” in the delivery system. In short, the Administration intends to compel delivery system modifications through aggressive payment policy changes.

What industry segments are immediately concerned? -- home health agencies, skilled nursing facilities, IRFs, LTCHs, and rehab facilities. In the name of “efficiency and accountability” the President proposes to bleed (Bleeding Edge redux?) $950M over 5 years and $17.8B over ten years from payments that would otherwise have gone to these facilities. We know this because the budget is echoing Director Orszag’s work at the CBO, finding savings from putting into the hands of hospitals financial responsibility, on an MS-DRG by MS-DRG basis, for the care Medicare otherwise would have paid these facilities for within 30 days after inpatient discharge.

In the CBO formulation, bundled payments would have been applied to 1/3 of discharges by 2013 and all discharges by 2015. The budget scores this proposal somewhat higher than CBO did so one might speculate that more rapid application is now on the Director’s mind. Somewhat comforting to investors in the affected facilities is that savings begin in 2013 and that over half of the ten year savings are not realized until 2018 and 2019.

Does this “reform” propel acquisitions of post-acute facilities by acute facilities? Alternatively, will acute facilities have the market power to negotiate favorable terms in purchasing post-acute services from such facilities? Does this require additional hospital and physician integration to produce the admission patterns that will allow hospitals not to lose their shirts in paying for the new care?

Will any state insurance departments want to see hospitals establish reserves against the possibility of the cost of their post-acute care payment responsibilities exceeding their financial wherewithal? The CBO write-up of this program also included take backs so that hospitals would only realize 20% of the savings that Medicare expects that they would produce. Of course there could be a big negative for acute care hospitals if Medicare’s take backs make the margins small and expected savings do not materialize because of case mix, physician ordering patterns, or a dozen other variables. What upheaval do you predict?