Berkeley law profs raise questions on formation of ACOs
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The report stated that some existing federal laws and regulations could slow or even prevent the formation of accountable care organizations (ACOs) serving the neediest Americans. According to the report, “Breaking Down Barriers to Creating Safety-Net ACOs,” the most vulnerable ACOs are safety-net providers such as community health centers and clinics that care for the neediest populations.
“Our healthcare safety net is as fragmented as the rest of our healthcare system,” the authors wrote. “The decision to launch a safety-net ACO is not a simple one. The complexities of the legal and regulatory barriers involved are reflected in the length of the Medicare Shared Savings Program (MSSP) proposed regulations and in the volume of discussion and debate surrounding the regulatory process.”
To make ACOs work, providers must be on the alert for existing legal and regulatory obstacles enacted before passage of the PPACA, according to the authors. Some of the major issues and more confusing areas from a federal-level perspective are physician competition/anti-trust concerns, federal tax status concerns and physician compensation, lead author Ann Marie Marciarille, visiting assistant professor at the University of California, Hastings College of the Law, senior research fellow at University of California Berkeley School of Law, said in an exclusive interview.
“These are areas that could use clarifications. For example, older laws governing physician compensation might prevent the newer kinds of partnerships that ACOs require. [Those forming safety-net ACOs also] need to be careful that new alliances don’t jeopardize their tax status.”
The report found that America’s neediest populations—seniors, the poor, the underserved—have the most to gain from ACO participation, which is designed to reduce hospital readmissions and offer better care of chronic conditions like diabetes and asthma.
“The biggest concern for safety-net providers has to be that under the proposed Medicare Shared Savings Program regulations federally-qualified health centers (FQHCs) have not kept their coding and billing records in a way that would allow them to participate in the program,” said Marciarille. “And those data entry changes are in progress but you need a track record of a few years before you can qualify.”
Many of the challenges involved in ACO formation require reform internal to safety-net organizations. According to the report, “the bigger concern is the idea that the administrative burden is substantial.” With 65 quality measures across five domains, that puts the “accountable into accountable care,” said Marciarille adding, “but that will be a sea change for providers to have to be prepared to accumulate that data with that level of granularity.”
Many others will require a collaborative effort between and among the governmental entities that regulate healthcare. According to the authors, it is a sign of significant foresight that, as a result, CMS has initiated unprecedented cross-agency collaboration in the regulatory process to usher in the MSSP. “The good news is the federal healthcare regulatory agencies have worked cooperatively setting up this first round of proposed regulations and guidelines,” said Marciarille. “The pieces do fit together.”
However, as Marciarille stated, the big takeaway is that not all the regulations have been firmed up. “It’s a little bit of a test of the capacity to live with uncertainty which might make some back off,” said Marciarille. “It will be a challenge to live with a certain amount of uncertainty until final regulations are propagated and, even then, the first cycle of the MSSP may be experimental.”
Safety-net providers will need to marshal their administrative and financial resources wisely to form an ACO, according to the report. This makes it all the more important to address the need for a streamlined, tailored process for complying with the MSSP’s fair competition, fraud and abuse and federal tax concerns.
The report concluded with recommendations that federal regulators streamline implementation of ACOs by publishing comprehensive guidelines that cut across agency lines. Additional recommendations included:
- Implement incentives and rewards for specialists who cooperate with safety-net providers;
- Create special fair competition safety zones for ACOs in rural areas; and
- Provide guidance on the tax status of safety-net ACOs.
It is important for entities looking to form ACOs to keep their eyes on the regulatory ball and watch for the final regulations, added Marciarille. “The last line hasn’t been written yet.”
Marciarille stated that a policy brief focused on state-level legal and regulatory concerns for safety-net ACOs will be released by the end of the year.