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April 2011


Accountable Care Organization Regulations Released Today

A Polsinelli Shughart Update


Today (March 31, 2011), the Centers for Medicare and Medicaid Services (CMS) released the proposed rule that will govern the implementation of section 3022 Medicare Shared Savings Program (Program) of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (together referred to as ACA). The Program is intended to promote accountability for a patient population, coordinate care under parts A and B, and encourage investment in infrastructure and care processes that result in the delivery of services through Accountable Care Organizations (ACOs) that meet quality, cost and efficiency metrics.

The proposed rule and joint CMS/OIG notice are posted at: www.ofr.gov/inspection.aspx. For more information, read the fact sheet at www.HealthCare.gov/news/factsheets/accountablecare

Comments on the proposed rule will be accepted through June 6, 2011. CMS will respond to all comments in a final rule to be issued later this year.

About ACOs

ACOs are composed of groups of providers or suppliers or a network of groups who will be rewarded with a share of the Medicare savings for providing quality care at a lower cost relative to a spending benchmark. The Secretary is required to implement the Program no later than January 1, 2012.

At the same time CMS and the Office of the Inspector General released a Notice with comment period that describes and solicits public input regarding possible waivers of the application of Physician Self-Referral Law, the Federal anti-kickback statute and certain civil monetary penalties (CMP) law provision to specified financial arrangements involving ACOs under the Program. There will be a 60-day comment period.

In addition, the Federal Trade Commission and the Department of Justice issued today a Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations participating in the Medicare Shared Savings Program. The joint proposed statement sets forth the guidance that seeks public comment on the antitrust agencies' proposed guidance and the new antitrust "safety zone" it would create. Public comments will be accepted on the proposed joint statement until May 31, 2011. The Proposed Antitrust Policy Statement is posted at: www.ftc.gov/opp/aco/.

The Internal Revenue Service is also soliciting comments as to whether existing guidance relating to the Code provisions governing tax-exempt organizations is sufficient for those tax-exempt organizations planning to participate in the Medicare Shared Savings Program through an "accountable care organization" and, if not, what additional guidance is needed. The IRS is also soliciting comments concerning whether guidance is needed regarding the tax implications for tax-exempt organizations participating in activities unrelated to the MSSP, including shared savings arrangements with commercial health insurance payers, through ACOs. The IRS Guidance and Solicitation of Comments will be posted at: http://www.irs.gov/pub/irs-drop/n-11-20.pdf.

Polsinelli Shughart Health Reform Team

Polsinelli Shughart's Health Care Practice group has formed an ACO team that has been engaged in the ACO discussion for some time. The team will be preparing a series of e-alerts focusing on the major provisions of the rule and their impact. Shortly, we will be announcing an ACO webinar series that targets the major issues in the proposed rule, including legal structure and models, payment models and treatment of savings, quality metrics and reporting and compliance/sanctions.

If you would like to sign up to receive additional news on ACOs and other health care issues, click here.

For More Information

If you have questions about the proposed rule and what it means for you, please contact:


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