CMS-1345-NC2: Waiver Designs in Connection With the Medicare Shared Savings Program and the Innovation Center
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1 Submitted Electronically Donald Berwick, M.D., M.P.P. Administrator Centers for Medicare & Medicaid Services Department of Health and Human Services Room 445-G, Hubert H. Humphrey Building 200 Independence Avenue, SW Washington, D.C Inspector General Office of the Inspector General Department of Health and Human Services Room 5441, Cohen Building 330 Independence Ave, SW Washington, DC Re: CMS-1345-NC2: Waiver Designs in Connection With the Medicare Shared Savings Program and the Innovation Center Dear Dr. Berwick and Mr. Levinson: On behalf of VHA Inc. ( VHA ), I am writing to provide comments on the subject notice, which was published by the Centers for Medicare & Medicaid Services ( CMS ) and the U.S. Department of Health & Human Services Office of Inspector General ( OIG ) (collectively, the agencies ) in the April 7, 2011 Federal Register, 76 Fed. Reg ( Proposed Waiver Rule ). Founded in 1977, VHA is dedicated to the success of nonprofit, community-based health care. Based in Irving, Texas, VHA is a national health care network that serves more than 1,400 notfor-profit hospitals and more than 23,000 non-acute health care organizations nationwide. VHA helps its members deliver safe, effective, and cost-efficient health care through both national and local support. VHA has 16 regional offices covering 47 states, as well as an office in Washington, D.C. VHA has been actively involved in the development of the accountable care organization ( ACO ) concept. Further, VHA shares the agencies desire, through the Proposed Waiver Rule, to address the application of federal fraud and abuse laws to ACOs formed in connection with the Medicare Shared Savings Program ( MSSP ) so that the laws do not unduly impede development of beneficial ACOs, while also ensuring that ACO arrangements are not misused for fraudulent or abusive purposes that harm patients or Federal health care programs. 76 Fed. Reg For the reasons set forth below, however, VHA believes that there are a number of modifications that need to be made to the Proposed Waiver Rule if the MSSP is to achieve its principal goals: better health, better care, and lower cost. Id. at New York Avenue, N.W. Suite 510 East Washington, D.C
2 Page 2 of 5 Comments on Proposed Waivers (Section II) Process/Application. The Proposed Waiver Rule states that the agencies expect to issue waivers applicable to ACOs participating in the MSSP concurrently with CMS's publication of final MSSP regulations. Id. at The Proposed Waiver Rule further states that the agencies intend to apply these waivers uniformly to all qualified ACOs, ACO participants, and ACO providers/suppliers participating in the MSSP. Id. at These statements suggest that the agencies will not be granting waivers on an ACO-by-ACO basis as part of the application process (e.g., pursuant to a review and analysis of an ACO s proposed arrangements with participating providers, etc.), but rather will be establishing a set of conditions or requirements similar to those found in existing fraud and abuse law exceptions and safe harbors that, if satisfied by the ACO at issue during the term of its MSSP agreement with CMS, will result in the waiver of the laws at issue. VHA believes that it is important for the agencies to confirm and/or clarify their position on this issue. Threshold Qualifications for Proposed Waiver. The Proposed Waiver Rule provides that in order to qualify for a waiver, ACOs, ACO participants, and ACO providers/suppliers would be required to comply with the agreement, section 1899 of the Act, and its implementing regulations (including, without limitation, all transparency, reporting, and monitoring requirements). Id. at Thus, this proposed requirement effectively would import the entire body of MSSP law and regulation ultimately, hundreds (if not thousands) of rules and requirements into what would otherwise be a relatively simple and straightforward waiver rule. VHA strongly believes that this threshold qualification should be eliminated. Simply put, it is fundamentally unfair to expose an entity to potentially significant criminal and/or civil liability under the federal health care program anti-kickback statute ( Anti-Kickback Statute ), federal physician self-referral law ( Stark Law ), federal services reduction civil money penalty law ( Services Reduction CMP ) and, indirectly, the civil False Claims Act (which may be enforced by private citizens) based, for example, on a single, minor and/or technical violation of an MSSP regulation. Scope of Proposed Waivers - Stark Law. VHA believes that it is critically important that the agencies clarify several issues relating to the Proposed Waiver Rule as it applies to the Stark Law. First, the waivers at issue would apply only to remuneration that takes the form of shared savings distributions. Id. at It is expected, however, that in addition to receiving shared savings distributions from ACOs, many physicians will have direct or indirect ownership interests in ACOs. In order to ensure that these types of financial relationship will not create Stark Law issues, the agencies should clarify that an ACO will not be considered a furnishing entity as described in 42 C.F.R Second, as the agencies note, it is expected that ACOs will receive (and distribute) shared savings not only from CMS under the MSSP, but also from commercial payors under similar arrangements. Id. at and In order to ensure that these commercial arrangements will not create Stark Law liability for physicians or furnishing entities, CMS should clarify that such arrangements are capable of protection under the Stark Law
3 Page 3 of 5 exception for risk-sharing arrangements at 42 C.F.R (n). More specifically, CMS should clarify that where an ACO enters into a shared savings arrangement with a commercial health plan, as defined in 42 C.F.R (l), and the ACO then distributes a portion of any such savings to participating physicians, these distributions again, from the ACO to the physicians will constitute [c]ompensation pursuant to a risk-sharing arrangement... between a MCO or an IPA and a physician... for services provided to enrollees of a health plan, provided that the arrangement does not violate the [Anti-Kickback Statute] or any Federal or State law or regulation governing billing or claims submission. 42 C.F.R (n). Third, and also to help ensure that commercial ACO arrangements do not create Stark Law liability for ACOs or their participating providers, CMS should confirm that where an ACO has a compensation arrangement with a physician, and that arrangement provides for the physician s compensation to vary based on his or her performance against certain specifically identified and tracked clinical care quality, patient satisfaction and/or similar performance metrics, such compensation qualifies as unit-based compensation for purposes of the Stark Law s special rules on compensation, as set forth in 42 C.F.R (d). Scope of Proposed Waivers - Anti-Kickback Statute. VHA also believes that it is critically important that the agencies clarify several issues relating to the Proposed Waiver Rule as it applies to the Anti-Kickback Statute. First, the Proposed Waiver Rule provides for the waiver of [d]istributions of shared savings received by an ACO from CMS under the MSSP [t]o or among ACO participants, ACO providers/suppliers, and individuals and entities that were ACO participants or ACO providers/suppliers during the year in which the shared savings were earned by the ACO. Id. at In many cases, ACOs will distribute a portion of the shared savings that they receive from CMS to individual physicians, hospitals and other ACO participants/providers/suppliers. In other cases, however, such payments may be distributed to intermediaries such as a physician group practice or an independent practice association ( IPA ) which will then apportion the shared savings payment among individual ACO participants and providers/suppliers pursuant to agreements entered into between the intermediary and each such individual ACO participant/provider/supplier. The agencies should confirm that such downstream distributions will be covered/protected under the Anti-Kickback Statute ACO waiver. Second, like the proposed Stark Law waiver, the proposed Anti-Kickback Statute waiver will not protect the ownership interests held by providers, suppliers, practitioners and others in ACOs (or the returns on such investments). In many (and probably most) cases, this remuneration will not be capable of protection under the Anti-Kickback Statute s small entity investment safe harbor, 42 C.F.R (a)(2), due (in large part) to the safe harbor s so-called rules. Under these circumstances, the agencies should
4 Page 4 of 5 expand the protection offered by the Proposed Waiver Rule (or create a new safe harbor) to cover such investments/returns provided: the conditions set forth in 42 C.F.R (a)(2)(ii)-(v), (vii)-(viii) are satisfied; or the conditions set forth in 42 C.F.R (a)(3)(i)(B)-(E), (G)-(H) are satisfied; or the conditions set forth in 42 C.F.R (a)(3)(ii) are satisfied. Scope of Proposed Waivers - Services Reduction CMP. In many cases, ACOs will be owned, in part, by one or more hospitals. In the interests of clarity, the agencies should confirm in their final ACO waiver rulemaking that a payment to a physician from an ACO that is owned, in part, by a hospital is not a payment, directly or indirectly, to a physician from the hospital for purposes of the Services Reduction CMP. Comments on Additional Waiver Design Considerations (Section III) In Section III of the Proposed Waiver Rule, the agencies request comments on a variety of additional topics. Several of these topics are addressed (at least in part) above. To the extent that VHA has additional comments concerning any of the Section III topics, these comments are set forth below. Arrangements Related to Establishing the ACO. For the reasons discussed above, VHA believes that it is critical for the agencies to address through the waiver process, the promulgation of additional exceptions/safe harbors, and/or various clarifications remuneration that does not take the form of shared savings distributions, including (but not limited to) remuneration that takes the form of (1) investments in ACOs, and (2) returns on such investments. Arrangements Related to Operating the ACO. VHA is strongly in favor of expanding the proposed waivers to include financial arrangements (other than those created by distributions of shared savings) between or among ACO participants and/or ACO providers/suppliers and between the ACO, its ACO participants, and/or its ACO providers/suppliers and outside individuals or entities, provided these arrangements are related to operating the ACO or achieving the integrated care, cost savings, and quality goals of the [MSSP]. Id. at Indeed, in the absence of an extremely specific, and therefore inflexible, definition of what constitutes a distribution of shared savings, it will be difficult to determine whether compensation paid by an ACO to a participant/provider/supplier, for example, will fall squarely into the shared savings distribution category. For example, in order for a payment from an ACO to a participant/provider/supplier to qualify as a distribution of shared savings, must the
5 Page 5 of 5 performance metrics governing the CMS-ACO agreement be identical to the performance metrics governing the ACO-participant/supplier/provider agreement? Or is it sufficient that the source of the funds used by the ACO to compensate participants/providers/ suppliers is shared savings payments made by CMS to the ACO? Necessary For and Directly Related To Standard. As the agencies note, several of the requirements in the Proposed Waiver Rule provide that the compensation at issue must be for activities necessary for and directly related to the ACO s participation in and operations under the MSSP. In the absence of agency definitions of the terms necessary and directly, this standard is unnecessarily vague and ambiguous. VHA strongly believes that the standard would achieve its fundamental purpose if it simply provided that the activities at issue must be related to the ACO s participation in and operations under the MSSP. Timing of Waivers. With respect to the issue of whether final waivers should be published contemporaneously with, in advance of, or soon after final rule regarding the [MSSP], id. at 19660, VHA strongly believes that in order to achieve their intended purpose, the waivers should be issue either before or at the same time as the final MSSP rulemaking. * * * In closing, on behalf of VHA, I would like to thank the agencies for providing us with this opportunity to comment on the Proposed Waiver Rule. Although VHA believes that a number of substantial modifications to the Rule are necessary if it is to achieve its intended purpose, we also believe that if these modifications are implemented along with those offered by other industry stakeholders the MSSP will be more likely to fulfill its promise. Please feel free to contact me at (202) if you have any questions or if VHA can provide any assistance as you consider these issues. Respectfully submitted, Edward N. Goodman Vice President, Public Policy
RE: File Code CMS-1345-NC2 Medicare Program Waiver Designs in Connection with the Medicare Shared Savings Program and Innovation Center
Donald Berwick, M.D., M.P.P. Centers for Medicare and Medicaid Services Department of Health and Human Services Attention: CMS-1345-NC2 Room 445-G Hubert H. Humphrey Building 200 Independence Ave. S.W.
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