Mark H. Gallant, co-chair of Cozen O’Connor’s Health Care practice group and a nationally respected health care lawyer, was quoted in a recent New York Times article discussing the Supreme Court arguments in the case, King v. Burwell. At issue in the case is the right to federal subsidies for the purchase of health insurance by individuals who reside in states that have chosen to have the federal government run their health insurance exchange.  If decided for the plaintiffs, the case could have a drastic effect on the future of the controversial Affordable Care Act.

Mark has been a go-to contact for the press on these type of issues for many years, recently providing insight into another Supreme Court case regarding the rights of providers to sue states over Medicaid payment rates in Bloomberg Business News. With the Affordable Care Act’s mandate to expand health care coverage and states still facing significant budgetary constraints, various media outlets will no doubt be seeking out Mark’s insights as the issues surrounding the payment for expanded health care coverage play out.

Some Supreme Court Justices Cite 2012 Argument Against Health Care Law as Defense for It Now – New York Times – March 8, 2015

Why the Supreme Court’s Medicaid Decision Matters – Bloomberg Business – January 20, 2015

On January 26, 2015, the Secretary of the United States Department of Health and Human Services (“HHS”), Sylvia Mathews Burwell, announced two important goals for the Department:

1. Increase the percentage of Medicare provider payments that are made through alternative payment models based on how well the providers care for patients, rather than the amount of care provided. The percentage goals for these alternative payment models are 30% by 2016 and 50% by 2018.
2. Tie virtually all Medicare fee-for-service payments (85% in 2016 and 90% in 2018) to quality and value.

This announcement puts hard numbers on the goal to move away from traditional fee-for-service Medicare payments that has been stated generally since at least 2010 when the Affordable Care Act was enacted. By clearly delineating specific figures for alternative payment models, such as accountable care organizations and bundled payment arrangements, from those figures for payment methods, HHS has made it clear that providers should be thinking not just about different forms of payment but different forms of organizations and relationships with other providers. Alternative payment models generally require coordination among different types of providers who may not otherwise be related to each other.

While the announced goals focus on the Medicare fee-for-service system, it is clear that HHS intends the impact of these goals to be far broader. Ms. Burwell also announced the creation of a Health Care Payment Learning and Action Network to facilitate a public-private sector partnership to “continue to build on our work with state Medicaid agencies, private payers, employers, consumers and other partners,” while welcoming the fact that “our partners in the private sector have the opportunity to be even more aggressive” in establishing alternative payment models and pay-for-value compensation systems. On the same day as Ms. Burwell’s announcement, the Centers for Medicare and Medicaid Services released a fact sheet stating that it is taking action with a goal to spend “our health dollars” more wisely, citing the importance of the goal for patients, families, providers, tax payers, employers, states and insurance companies, and making it clear that HHS and CMS fully intend to have their efforts to transform health care delivery and payment systems to reverberate well beyond the Medicare program.

December has been a busy month for CMS with respect to the Medicare Shared Savings Program (“MSSP”). Last week CMS announced that eighty-nine (89) more ACOs would begin participating in the MSSP starting in 2015, bringing the total number of ACOs in the program to four-hundred and five (405). Continue reading…

In early October, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) released a proposed rule that included, among other provisions, a proposed gainsharing regulation (“Proposed Rule”), and a specific request for comments on a definition of what it means to “reduce or limit services” under the statutory prohibition against certain “gainsharing” arrangements among hospitals and physicians. The OIG’s goal with this Proposed Rule and subsequent final rule is to “interpret the statutory [gainsharing] prohibition broadly enough to protect beneficiaries and the Federal health care programs, but narrowly enough to allow low risk programs that further the goal of delivering high quality health care at a lower cost.” More specifically, the OIG seeks to implement a “narrower interpretation of the phrase “reduce or limit services.” Industry analysts are touting the final regulation as a potential game changer in the battle to deliver “high quality health care at a lower cost.”

The existing gainsharing civil monetary penalty statute (“Gainsharing CMP”) is a law that broadly “prohibits hospitals and critical access hospitals from knowingly paying a physician to induce the physician to reduce or limit services provided to Medicare or Medicaid beneficiaries who are under the physician’s direct care.” Violation of the Gainsharing CMP by a hospital that makes such payment, and a physician that in turn knowingly accepts the payment, results in CMPs that are no greater than $2,000 per each beneficiary for whom such payment is made.

Determining what does and what does not constitute a payment designed to reduce or limit services can be difficult, particularly because, as HHS has taken pains to point out, the statute technically prohibits payments from hospitals to physicians to limit any services, not just medically necessary services. However, as far back as 2005 the Medicare Payment Advisory Commission and the Chief Counsel to the OIG have supported gainsharing when safeguards are in place to evaluate risks posed by such programs, including “measures that promote accountability, adequate quality controls, and controls on payments that may change referral patterns,” and to date, the OIG has approved 16 gainsharing arrangements through the advisory opinion process.

More recently, under Section 3022 of the Affordable Care Act, the secretary of HHS established  waivers under the Medicare Shared Savings Program (MSSP) with respect to the Gainsharing CMP under certain conditions. These waivers have limited applicability as they apply only to accountable care organizations that participate in the MSSP. The final gainsharing regulations presumably will cover all hospitals and could potentially have a much broader impact upon hospital physician compensation arrangements. Overall, the Proposed Rule and the OIG’s request for comments on what should and should not constitute prohibited payments from hospitals to physicians to reduce or limit services is yet another example of how the regulatory  landscape is changing to adapt to a reimbursement model that is evolving from a fee-for-service dominated model to one in which pay-for-performance will play a much larger role.

The comment period closed under the Proposed Rule in early December, and the final rule is expected in 2015.

The Centers for Medicare and Medicaid Services (“CMS”) released proposed  regulations for the Medicare Shared Savings Program (“MSSP”) on Monday December 1, 2014.  The proposed regulations are scheduled to be published in the Federal Register on December 8, 2014, and those wishing to submit comments to the agency will have sixty days after their publication in the Federal Register to do so. CMS stated that the regulations will generally be effective sixty days after they are published in final form.

CMS’ discussion and the proposed regulations span over 400 pages and cover many   operational details of the MSSP.  Some selected highlights are noted below:

• CMS proposes to permit ACOs currently enrolled in the MSSP’s “upside risk only” model to continue to participate in the “upside risk only” model for a second “agreement period” with a reduced shared savings rate.

• CMS proposes to create a new “track 3” “upside/downside” risk model with higher rates of savings and the prospective attribution of beneficiaries.

• CMS proposes to place a “greater emphasis on primary care services delivered by nurse practitioners, physician assistants and clinical nurse specialists in the beneficiary assignment process, and to eliminate the exclusivity requirement for certain specialists that were previously required to be exclusive to one ACO on the basis that they render some services that are considered primary care services.

• CMS proposes to eliminate the requirement that ACOs send out data sharing “opt out” letters to beneficiaries and would require beneficiaries to opt out of data sharing exclusively by contacting CMS as opposed having the option to opt out by contacting the ACOs directly.

The health care industry will be digesting CMS’ voluminous and in some cases highly technical proposed changes to the MSSP over the next 60 days and the Health Law Informer will continue to provide more details regarding these regulations and the industry’s reaction to them.

To read the complete text of the proposed regulations click here.

The Centers for Medicare & Medicaid Services (“CMS”) announced a new initiative, the ACO Investment Model, on October 15, 2014.  Under the model, ACOs which are made up of “providers [who] lack adequate access to … capital” may receive additional funding from the CMS “to invest in infrastructure necessary to successfully implement population care management.” The eligibility criteria are as follows:

• The ACO must be accepted into and participate in the Medicare Shared Savings Program. The ACO’s first performance period in the Medicare Shared Savings Program must have started in either 2012, 2013 or 2014 or will start in 2016.
• The ACO has completely and accurately reported quality measures to the Medicare Shared Savings Program in the most recent performance year, if the ACO started in the Medicare Shared Savings Program in 2012, 2013 or 2014, excluding ACOs that will start in 2016.  The ACO has a preliminary prospective beneficiary assignment of 10,000 or fewer beneficiaries for the most recent quarter, as determined in accordance with the Shared Savings Program regulations.
• The ACO does not include a hospital as an ACO participant or an ACO provider/supplier (as defined by the Shared Savings Program regulations), unless the hospital is a critical access hospital (CAH) or inpatient prospective payment system (IPPS) hospital with 100 or fewer beds.
•  The ACO is not owned or operated in whole or in part by a health plan.
•  The ACO did not participate in the Advance Payment Model.

Continue reading…

With little fanfare just before the Labor Day weekend, CMS announced a program in which it would enter into administrative agreements with eligible providers in exchange for the providers’ withdrawal of pending appeals (“Settlement Process”). This announcement follows massive backlogs in administrative appeals resulting from retroactive denials of inpatient claims by Medicare contractors, including recovery auditor contractors (“RAC”), as well as a lawsuit brought by the American Hospital Association challenging these delays. Under the Settlement Process, CMS is willing to pay “68% of the net allowable amount” for eligible claims within 60 days. According to CMS, eligible providers should submit requests to participate in the Settlement Process by October 31, 2014, and eligible providers may file for an extension of time to request a settlement if they are unable submit requests by the end of October. Although this Settlement Process holds promise for certain providers, it does not apply to all providers or all claims.

Eligible Providers

Only acute care hospitals and critical access hospitals may participate in the Settlement Process. The following providers are not eligible to participate:

• Cancer hospitals;
• Children’s hospitals;
• Inpatient rehabilitation facilities;
• Long-term care hospitals; and
• Psychiatric hospitals that are paid under the inpatient psychiatric facility prospective payment system.

CMS may exclude eligible providers from participating in this Settlement Process if they are subject to pending False Claims Act litigation or investigations.

Eligible Claims

Only the following claims are eligible:

• Claims for dates of admissions prior to October 1, 2013;
• Claims for patients that were not Medicare Part C enrollees; and
• Claims that are pending appeals of inpatient-status claim denials, which were rejected by Medicare contractors, including RACs.

An eligible provider may select the eligible claims it would like to settle, while continuing to appeal certain other claims.

For more information regarding the Settlement Process, please contact Mark Gallant, Chris Raphaely, or Ryan Blaney.

It has been a busy summer so far for the Centers for Medicare & Medicaid Services (CMS) with respect to Accountable Care Organizations (ACOs), as the agency has proposed altering the quality reporting measures under the Medicare Shared Savings Program (“MSSP”) for 2015 and beyond.  Expect an even busier fall as other, potentially broader, proposed rule changes for ACOs are analyzed by the Office of Management and Budget (OMB) and both sets of proposals wind their way through the public comment process.

The proposed changes concerning quality reporting would revise and update the measures used to evaluate MSSP ACOs’ performance. Overall, the CMS says it would like to focus more on outcome-based measures (as opposed to process-based measures), reduce duplicative measures, and reflect current clinical practices without increasing ACO’s reporting burden.

More specifically, the CMS proposes to add 12 new measures and remove eight, which would increase the total number of quality measures from 33 to 37. The new measures relate to “avoidable” admissions for patients with multiple chronic conditions, heart failure, and diabetes; depression readmission; readmissions to skilled nursing facilities; patient discussion of prescription costs; and updated composite measures for diabetes and coronary artery disease.

The CMS would like to modify the scoring system to award bonus points toward shared savings to ACOs that make year-over-year improvements on individual measures. Moreover, the agency would like to modify its benchmarking methodology to use flat percentages to establish the benchmark for a measure when the national FSS data results in the 90^th percentile being greater than or equal to 95 percent. And, finally, the CMS proposes several ways to align MSSP reporting requirements with other reporting programs, including Medicare’s Electronic Health Records Incentive Program and the Physician Quality Reporting System.

Fewer details are available about the next set of proposed rules changes, which were submitted to OMB on June 26 and will be printed in the Federal Register after review. It is expected that these regulations will include changes to the MSSP’s payment provisions. The proposed changes would apply to existing ACOs and approved ACO applicants starting January 1, 2016. As soon as the text of the rule becomes publicly available, the Health Law Informer will provide more information.

It has been over three years since the Centers for Medicare and Medicaid Services (CMS) announced its proposed rule and guidance on the development and implementation of Accountable Care Organizations.  About four million Medicare beneficiaries are now in an ACO, and over 400 provider groups are participating in ACOs.  See February 19, 2013 Health Affairs Blog. An estimated 14% of the U.S. population is being treated within an ACO. See April 16, 2014 Kaiser Health News.

By all indications, these numbers will continue to grow as the US health system moves away from the fee-for-service model to pay for value models that reward quality and cost savings and require clinical coordination among different types of providers, in many cases providers who are unrelated other than through an ACO or other similar arrangement.  The seamless sharing of data, patient information and collaboration among large, medium and small physician practices, hospitals, post-acute providers, and even private companies like pharmacy chains is critical to the success of these organizations. Continue reading…