Berkley Law's Chief Justice Earl Warren Institute on Law and Social Policy has issued a policy brief (pdf) that discusses the impact of accountable care organizations on safety-net hospitals and providers.
The brief explains that while many health systems with large commercially insured populations have been proactively developing integrated health delivery systems that will aid in ACO success, safety-net providers have "not yet been as nimble," according to the brief.
The brief outlines barriers to safety-net ACO formation and makes the following policy recommendations:
• Further guidance is needed on how to identify the ACO self-dealing waiver and the preexisting exception for direct compensation arrangements, for reporting requirements. CMS and the cooperating agencies also need to consider the disproportionate burden new fraud and abuse law reporting and compliance requirements place on safety-net entities considering ACO formation.
• CMS and OIG should offer further clarification on the CMP waiver's applicability to providers and suppliers outside the ACO. Drawing on resources outside of the ACO may be particularly important for smaller, less well-capitalized ACOs, such as safety-net ACOs.
• CMS should consider whether it can offer technical legal assistance, such as CMS or HHSOGC attorneys, to assist safety-net providers in navigating this facet of the MSSP.
• Nothing done to establish the program should worsen pre-existing problems with safety-net Medicare provider participation. Therefore we recommend incentives and/or rewards for specialists who collaborate with safety-net providers. We also recommend the enactment of a rule that excludes all Medicare providers who require supplemental annual fees from the calculation of available specialists by authorities performing fair competition analysis.
• The FTC and DOJ should consider creating special fair competition safety zones for ACOs in rural areas. Everything about the formation requirements needs tailoring to the realities of rural health care if the benefits of safety-net ACOs are to be available to the citizens, providers and payers in rural areas. Specifically, expanding the fair competition safety zones for safety-net ACOs would particularly invite these entities to participate.
• Some ACOs, such as safety-net ACOs, are natural candidates for tax exemption. The IRS should provide specific guidance on this point.
• Safety-net ACOs face a uniquely difficult proportionality determination because they are likely to capitalize themselves with grants, making it less clear still how to allocate shared savings properly. Further, this requirement may go beyond CMS's Notice of Proposed Rulemaking, in that it requires shared savings of losses proportionately. The IRS should clarify what the proportionality determination requires of thosebacked not by venturecapital but by foundation grant money or government funds. As previously stated, while the proposed regulations state MSSP payments will be distributed to parties in proportion to savings realized, the IRS suggests such payments be distributed to capital ownership interests in the ACO, a different approach. The IRS should consider revising this requirement entirely, or in the alternative, clarify how it will operate in tandem with the requirements in the final MSSP regulations.
• The IRS should provide greater clarity as to how tax-exempt institutions can avoid private inurement and private benefit to maintain their exemption. This issue is, of course, larger than ACOs, but of pressing importance to tax-exempt entities who will need to form relationships with commercial health insurance entities in order to form safety-net ACOs.
As it concludes, the policy brief recommends CMS provide ACO guidance specific to safety-net providers in order to provide, a "focused, comprehensive format targeted to safety-net ACO formation. Such tailored, streamlined guidance targeted to ACO formation in the safety net, presented in one comprehensive document (cross-referencing others, as needed) would do much to advance the real goal of encouraging ACO formation in the safety net."
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The brief explains that while many health systems with large commercially insured populations have been proactively developing integrated health delivery systems that will aid in ACO success, safety-net providers have "not yet been as nimble," according to the brief.
The brief outlines barriers to safety-net ACO formation and makes the following policy recommendations:
• Further guidance is needed on how to identify the ACO self-dealing waiver and the preexisting exception for direct compensation arrangements, for reporting requirements. CMS and the cooperating agencies also need to consider the disproportionate burden new fraud and abuse law reporting and compliance requirements place on safety-net entities considering ACO formation.
• CMS and OIG should offer further clarification on the CMP waiver's applicability to providers and suppliers outside the ACO. Drawing on resources outside of the ACO may be particularly important for smaller, less well-capitalized ACOs, such as safety-net ACOs.
• CMS should consider whether it can offer technical legal assistance, such as CMS or HHSOGC attorneys, to assist safety-net providers in navigating this facet of the MSSP.
• Nothing done to establish the program should worsen pre-existing problems with safety-net Medicare provider participation. Therefore we recommend incentives and/or rewards for specialists who collaborate with safety-net providers. We also recommend the enactment of a rule that excludes all Medicare providers who require supplemental annual fees from the calculation of available specialists by authorities performing fair competition analysis.
• The FTC and DOJ should consider creating special fair competition safety zones for ACOs in rural areas. Everything about the formation requirements needs tailoring to the realities of rural health care if the benefits of safety-net ACOs are to be available to the citizens, providers and payers in rural areas. Specifically, expanding the fair competition safety zones for safety-net ACOs would particularly invite these entities to participate.
• Some ACOs, such as safety-net ACOs, are natural candidates for tax exemption. The IRS should provide specific guidance on this point.
• Safety-net ACOs face a uniquely difficult proportionality determination because they are likely to capitalize themselves with grants, making it less clear still how to allocate shared savings properly. Further, this requirement may go beyond CMS's Notice of Proposed Rulemaking, in that it requires shared savings of losses proportionately. The IRS should clarify what the proportionality determination requires of thosebacked not by venturecapital but by foundation grant money or government funds. As previously stated, while the proposed regulations state MSSP payments will be distributed to parties in proportion to savings realized, the IRS suggests such payments be distributed to capital ownership interests in the ACO, a different approach. The IRS should consider revising this requirement entirely, or in the alternative, clarify how it will operate in tandem with the requirements in the final MSSP regulations.
• The IRS should provide greater clarity as to how tax-exempt institutions can avoid private inurement and private benefit to maintain their exemption. This issue is, of course, larger than ACOs, but of pressing importance to tax-exempt entities who will need to form relationships with commercial health insurance entities in order to form safety-net ACOs.
As it concludes, the policy brief recommends CMS provide ACO guidance specific to safety-net providers in order to provide, a "focused, comprehensive format targeted to safety-net ACO formation. Such tailored, streamlined guidance targeted to ACO formation in the safety net, presented in one comprehensive document (cross-referencing others, as needed) would do much to advance the real goal of encouraging ACO formation in the safety net."
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