Health Law Blog - Healthcare Legal Issues

OIG will scrutinize differentials between provider-based and private physician offices.

November 24th, 2015

2016 Annual Work plan summary of provisions

Another area hospitals will involve a comparison of provider based in freestanding clinics. Oig states its intent to review and compare Medicare payments per physician office visits in provider based clinics and freestanding clinics to determine the difference in payment made to the clinic for similar procedures. He will also assess the potential impact on Medicare of hospitals claimants bride-to-be status for such facilities. Provider based facilities often receive higher payments for some services and the freestanding clinics. The requirements to be met for a facility to be treated as a provider based alright 42 CFR section 413.65.Providers can expect a lot of activity over the forthcoming years relating to changes in the departmental rules and provider based reimbursement systems. There will be a legislative board to equalize payment made in a hospital-based setting and in the physicians office. Even now, this is forcing some hospital systems to push forward projects to bring providers into hospital-based systems in order to grandfathered the increased reimbursement rate before these laws take effect.

The Truth About Physician Liability Under the Stark Law

November 18th, 2015

When Is A Physician Liable for Stark Law Violations?

Physician Liability Stark LawI frequently hear attorneys claim that the Stark law applies equally to hospitals and physicians. This position is sometimes taken in the process of negotiating a transaction between a hospital and a physician or physician group. In this context it is limited to simple posturing to attempt to get a better financial deal in the negotiated arrangement. This position takes on a different and much more serious repercussions when this position is taken in the context of a potential compliance violation that is being addressed.

Let me make it clear that the Stark law applies to physicians. It applies when physicians are the provider of designated health services. It also potentially applies to physicians when they make referrals to hospitals or other providers of designated health services. However, in referrals to other providers of designated health services, such as hospitals, the potential liability to the physician under the Stark Law is much different and more remote than the liability of the hospital.

The Stark Law applies in a much different way for the referring physician than it does for the provider of designated health services such as the hospital. The bottom line is that the physicians are subject to much less risk and are much less likely to be subject to penalties or sanctions for violating the Stark law.

Statements that physicians and hospitals are both potentially “on the hook” under the Stark law are incomplete and often disingenuous. Statements that physicians and hospitals are “in the same boat” or are “equally at risk” under the Stark are simply untrue in most common cases that are not intentional attempts to circumvent the Stark Law in some way.

To illustrate,  it is important to look at what the Stark law prohibits and what sanctions are provided for the violation. The primary sanctions for violating the Stark law is denial of payment of any designated health services that flow from referrals that are made in violation. The Stark law is primarily a payment ban that is effective regardless of intent. If there is a financial relationship with the physician and no exception exists to permit the referral, there is a violation and the provider of the designated health service is denied the right to seek payment for the prohibited services.

The Affordable Care Act attaches additional penalties under the Federal False Claims Act if repayment is not made within 60 days after the designated health service provider discovers that an over-payment occurred as a result of the Stark law infraction. Penalties for failing to make timely repayment include triple the amount of the improper payment plus an additional $11,000 per claim. In many cases the potential exposure to the designated health service provider can be astronomical and can be large enough to threaten the potential viability of their business. However, it is significant to note that none of this exposure falls on the referring physician if the referring physician does not bill for the designated health service. In the typical case involving a hospital/physician relationship, the liability exposure only falls on the hospital for the payment denial and false claims act liabilities.

This is the source of a common misconception among physicians and even some hospital attorneys. The physician is not subject to the primary sanction for violating the Stark law which is repayment of amounts received for tainted services.  This has been confirmed multiple times by the Center for Medicare and Medicaid Services.  In comments to the Stark law regulations, CMS stated that the Stark statutory scheme already protects physicians from any liability in the absence of actual knowledge, reckless disregard, or deliberate ignorance (in connection with circumvention schemes). The basic statutory sanction is this loss of claims or bills which affects the DHS entity, not the referring physician.  69 fed. Reg. 16062

Physicians are not totally off the hook from any implications of the Stark Law though. The Stark law provides that physicians can be subject to substantial civil monetary penalties and exclusion from the Medicare program if the physician participates in a circumvention scheme that the physician knows or should know has a principal purpose of assuring referrals by the physician to a particular entity to which the physician could not refer to directly without complying with the Stark Law.  In other-words, physicians are only directly liable if they participate in schemes to work around the Stark Law.

So the next time you hear someone say that the Stark Law applies just as much to physicians as it does to hospitals, you will know whether or not the statement is correct.







300 Pages of New Regulations Ruining Health Care Attorney Lives Across the Country

November 18th, 2015


Mountain of New Regulations Issued By CMS

Health Care Regulations 2016Just a tip to my colleagues in health care law.  Do not send these new regulations to printer before giving them an eyeball.  They are long and if you share a printer you will be buying coffee for your colleagues for at least a week.

True to their nature, there are a number of things that are unrelated to physician payment scattered throughout this poorly indexed document.  We have new Stark Law exceptions, changes to “incident to” billing rules, telemedicine reimbursement standards, and a whole host of additional little morsels that we health care attorneys need to locate, study, and update our clients on; all before the next guy down the street beats us to the rap.On November 16, 2015, the Department of Health and Human Services officially published their final rules Revising Payment Policies Under the Physician fee Schedule and Other Revisions to Part B for CY 2016.

Have a pleasant rest of your week gang.  Anyone who does not want to wade through all of these regulations can come on back to this blog as we post articles on various pieces of the new rules.

And remember; here at Ruder Ware, Health Care Never Sleeps!

Incident To Billing Rules Changed In New CMS Regulations

November 18th, 2015

New regulations issued by the Center for Medicare and Medicaid services on November 16, 2015 change the way that services that are furnished “incident two” the service of a physician must be built. The new regulations provide clarification that the billing provider must be the provider that actually supervises the incident to service.

Previously, regulations stated that the physician supervising the auxiliary personnel need not be the same physician upon whose professional service the incident to services base. The provisions in previous regulations that permitted another physician to supervise the incident to service have been removed. Now, the physician who actually available and actually supervisors the support personnel that is build Institute his services must be the party who is billing number is connected with the incident to the service.

The service that is performed “incident to” the services of a physician can generally be billed at 100% of the physician’s rate under the Medicare fee schedule.  However, supervision and billing standards must be complied with to avoid creating a compliance issue and potential overpayment.

All providers must look at their billing policies and procedures to be certain that they integrate the new “incident to” billing standards into their compliance policies and procedures and appropriately implement the new standard through proper training of their billing staff, physicians and support staff.  This is also a good time to refresh provider training on the extent of supervision that is required in various care settings.

ACO Primary Care Exclusivity Requirement – Not As Broad As Some Believe

September 1st, 2015

Exclusivity of Primary Care Physicians Under MSSP Rules

MSSP Primary Care ExclusivityThere has been a lot of confusion across the country about the primary care exclusivity requirement that applies to Accountable Care Organizations under the Medicare Shared Savings Program.  Some providers are under the mistaken belief that primary care doctors must be exclusive with the ACO under all payment types, including private commercial contracts.  This extent of exclusivity is not required under the MSSP rules.  In fact, exclusivity is a huge factor that is indicative of antitrust violation except where required under the MSSP regulations.

The exclusivity requirement for primary care physicians is limited to participation in the MSSP program.  Primary care physician are not required to be exclusive to an ACO for commercial contracts.  Below are some quotes that were made by the Center for Medicare and Medicaid Services in the recently released revised MSSP regulations.  This information clearly indicates the scope and purposes of the exclusivity requirement for primary care physicians.

CMS Statement On Exclusivity of Primary Care Providers

Response: We regret that some of the language in the preamble about  the exclusivity of ACO participants (defined by the Medicare-enrolled  billing TIN) created unnecessary confusion about the proposal. The  point of our proposal was that, for us to appropriately evaluate ACO performance, we must evaluate performance based on a patient population  unique to the ACO. Therefore, some ACO participants, specifically those  that bill for the primary care services on which we proposed to base  assignment, would have to be exclusive to an ACO, for the purpose of Medicare beneficiary assignment, for the duration of an agreement  period. In the absence of such exclusivity and in a situation where an ACO participant is associated with two or more ACOs, it would be  unclear which ACO would receive an incentive payment for the  participant’s efforts on behalf of its assigned patient population.

Exclusivity of the assignment-based ACO participant TIN ensures unique  beneficiary assignment to a single ACO.  However, exclusivity of an ACO  participant TIN to one ACO is not necessarily the same as exclusivity  of individual practitioners (ACO providers/suppliers) to one ACO. We did state somewhat imprecisely in the preamble to the proposed rule that “ACO professionals within the respective TIN on which beneficiary  assignment is based, will be exclusive to one ACO agreement in the  Shared Savings Program.  This exclusivity will only apply to the primary care physicians.” This statement appears to be the basis of the  concerns expressed by many commenters, and we understand the reasons  for those concerns. However, we stated the policy (76 FR 19563) we  intended to propose more precisely elsewhere in the preamble, when we  stated that “[t]his exclusivity will only apply to primary care physicians (defined as physicians with a designation of internal medicine, geriatric medicine, family practice and general practice, as discussed later in this final rule) by whom beneficiary assignment is established when billing under ACO participant TINs. (Emphasis added).

Thus, the exclusivity necessary for the assignment process to work  accurately requires a commitment of each assignment-based ACO participant to a single ACO for purposes of serving Medicare  beneficiaries. It does not necessarily require exclusivity of each primary care physician (ACO provider/supplier) whose services are the  basis for such assignment.   For example, exclusivity of an ACO  participant leaves individual NPIs free to participate in multiple ACOs  if they bill under several different TINs. Similarly, an individual NPI  can move from one ACO to another during the agreement period, provided  that he or she has not been billing under an individual TIN. A member of a group practice that is an ACO participant, where billing is  conducted on the basis of the group’s TIN, may move during the  performance year from one group practice into another, or into solo practice, even if doing so involves moving from one ACO to another.

This degree of flexibility is, in fact, one reason for our preference  to use TINs to identify ACO participants over NPIs: adopting NPIs in  place of TINs would result in the much stricter exclusivity rules for  individual practitioners to which so many commenters objected, than the  use of TINs to identify ACOs. This flexibility is limited, once again,  only in cases where the ACO participant billing TIN and individual TIN  are identical, as in the case of solo practitioners. Even in those  cases, moreover, it was not our intent (and it is no part of the policy that we are adopting in this final rule) that an individual  practitioner may not move from one practice to another. But while solo  practitioners who have joined an ACO as an ACO participant and upon  whom assignment is based may move during the agreement period, they may  not participate in another ACO for purposes of the Shared Savings  Program unless they will be billing under a different TIN in that ACO.

We are therefore finalizing our proposal that each ACO participant  TIN is required to commit to an agreement with us.  In addition, each  ACO participant TIN upon which beneficiary assignment is dependent must  be exclusive to one ACO for purposes of the Shared Savings Program. ACO  participant TINs upon which beneficiary assignment is not dependent are  not required to be exclusive to a single ACO for purposes for the  Shared Savings Program.  As we discuss in section E found later in this  final rule we are also providing for consideration of the primary care  services provided by specialist physicians, PAs, and NPs in the assignment process subsequent to the identification of the  “triggering” physician primary care services. We are therefore also   extending our exclusivity policy to these ACO participants. That is,  the TINs under which the services of specialists, PAs, and NPs are  included in the assignment process would have to be exclusive to one  ACO for purposes of the Shared Savings Program. (We emphasize that we  are establishing this policy for purposes of Shared Savings Program  ACOs only: Commercial ACOs may or may not wish to adopt a similar  policy for their purposes.

Medicaid Reimbursement for Telehealth In Wisconsin Mental Health Programs

August 11th, 2015

Wisconsin Medicaid Reimbursement for Telehealth In Mental Health Programs

A Medicaid enrolled certified mental health or substance abuse treatment program may be eligible for Medicaid reimbursement for telehealth services if it is also certified to provide treatment via telehealth.  Medicaid-covered services provided via telehealth are reimbursed in the same way Medicaid reimburses for face-to-face contacts between providers and consumers.  The Medicaid Handbook Update #2004-88 at, described coverage requirements.

1.            The agency must be a certified program under one of the specified program standards: Wis. Admin. Code DHS34, 35, 36, 40, 61, 63, or 75 (except for the provision of opioid treatment under DHS 75.15).

2.            Persons providing mental health or substance abuse treatment services via telehealth must be a rostered staff member of one of these certified programs.

3.            Medicaid will not accept claims from individual professional staff.

4.            The certified program also is certified for telehealth by the Division of Quality Assurance.

5.            The treatment service must be a covered service under one of the Medicaid mental health or substance abuse benefits.

6.            The treatment service may not be group therapy.

7.            The provider must indicate the “GT” modifier on the claim detail for the specific procedure code. The “GT” modifier definition is “Via interactive audio and video telecommunication systems.”

8.            Providers must continue to follow all Medicaid coverage policies and all other requirements for each underlying service in the same manner as if the service was provided on  face-to-face basis.

For more information concerning telehealth program issues for mental health care or other provider types, contact John Fisher at through the contact information on this site.

Telehealth Certification In Wisconsin Mental Health Programs

August 11th, 2015

Process for Telehealth Certification In Wisconsin

Only certified mental health and/or substance abuse programs, or agencies planning to be certified as a mental health and/or substance abuse provider, may apply for telehealth certification. The first step in the process is for the agency to write a plan addressing each section in the attached template. The plan is then sent to the Behavioral Health Certification Section of the Division of Quality Assurance.

Provider’s must demonstrate compliance with their approved plan to the Division of Quality Assurance surveyor(s) during a site review or other unannounced focus visits.

Requirements for Telehealth Certification

There are several requirements that must be met in order to maintain certification.  Many of these requirements will need to be reflected in compliance policies and made operational as part of the telehealth program. These requirements fall in the following areas subject to additional detail in each area:

  • applicable regulatory requirements for the provider’s specific program (Administrative Code DHS 34, 35, 36, 40, 41, 61, 63, and 75)
  • requirements related to clinical supervision/collaboration for program staff who provide treatment services via telehealth, background checks, maintenance of professional liability insurance, documentation into the consumer’s record in a timely manner, and other requirements.
  • requirements regarding the locations for staff other than the main office of certified program or a certified branch office. Patients must receive the telehealth services at the main office or a certified branch office of the certified program.
  • Restriction against providing the telehealth services to consumers who are in-home or in-community.
  • minimum transmission standards established by the American Telemedicine Association (see
  • compliance with vendor requirements for the telehealth hardware/software to ensure that the telehealth service is of high quality and as close to a face to face visit as possible.
  • orientation and ongoing training to staff on the use of the telehealth equipment, the clinical application of telehealth, safety and security during telehealth visits, privacy and confidentiality, back-up procedures if there is equipment failure, and consumer preparation for telehealth.
  • Assuring that patients are informed about the provision of services provided through telehealth, the history of telehealth, success rate of telehealth services, how telehealth sessions are conducted, and the extent to which the program is able to provide treatment services face-to-face versus via telehealth.
  • an ongoing method for obtaining consumer satisfaction on telehealth visits and evaluating the results of this survey process for quality assurance purposes
  • patient choice of having a face to face visit with a professional or seeing this person via telehealth, to the extent feasible.
  • workspaces must be secure, private, reasonably soundproof, and have a lockable door to prevent unexpected entry.
  • Efforts to ensure privacy so provider discussion cannot be overheard by others outside of the room where the service is provided.
  • If other people are in either the patient or the professional’s room, both the program staff and the consumer must be made aware of the other person and agree to their presence.
  • Program staff must verify for the consumer the identity of the staff member who is providing the treatment services via telehealth and verify for the staff member providing the treatment services theconsumer’s identity.
  • policy/procedure for technology breakdown that causes a disruption of the session.
  • System to Ensure secure upload and download with the vendor’s server.  At least 128 bit encryption software must be used.
  • assure that no information from a transmission of a telehealth services is stored on the vendor’s servers.
  • use of HIPAA Business Associate Agreement if information is transmitted via the vendor’s servers.

How Does Wisconsin Medicaid Reimburse for Telehealth?  Check Out The Article Here: Telemedicine Reimbursement Mental Health Programs

New Memorandum On Telehealth In Mental Health and Substance Abuse Programs

August 11th, 2015


On August 5, 2015 the  the Wisconsin Division of Quality Assurance (DQA), issued new DQA Memo 2015-011 (the “Telehealth Memorandum”) to provide background information and update a previous memo (Memo #2004-14, issued in September 2004) on the use of telehealth in certified mental health and substance abuse treatment programs/services in the State of Wisconsin.

Recognizing that significant technological advances have been made since the earlier memo, the DQA details revisions to the minimum requirements for telehealth certification by mental health and substance abuse programs in the State of Wisconsin.  The new standards for certification purport to permit use of hardware and software that may be less costly and easier to use.  This may result in facilitating broader use of telehealth to benefit patients with the state of Wisconsin.

The Telehealth Memorandum outlines basic certification requirements and references the application form for Mental Health and Substance Abuse Telehealth certification for additional detail.  Specific requirements are outlined  that certified mental health and substance abuse treatment programs must follow in order to use telehealth technology as a means of service provision for counseling, psychotherapy, medication management or related clinical consultation.  Services may include outpatient services, crisis services, community support services, comprehensive community services, day treatment programs, inpatient, and other services.

Some of the requirements that must be met in order to achieve certification of a telehealth program in Wisconsin include the following:

  • All staff employed by these programs may provide services using telehealth technologies provided they have received the necessary training and meet program and telehealth certification standards.
  • The certified program should identify specific staff providing the services in its telehealth plan and policies as required in the certification process.
  • Telehealth services cannot be provided in Wisconsin by narcotic treatment services certified under Chapter DHS 75.15 or mental health inpatient services certified under Chapter DHS 61.71 and Chapter DHS 61.79.
  • Telehealth technology cannot be used in lieu of the face-to-face assessment for continuing use of the restraint/seclusion in an inpatient setting.
  • Telehealth equipment may be used for the purpose of clinical supervision and clinical collaboration.
  • All the requirements for supervision and collaboration continue to apply such as transmission quality, ensuring that the transmitted information is not stored, and other requirements and restrictions outlined in DQA guidance.
  • The memo cautions providers regarding the use of telehealth equipment for clinical supervision for substance abuse counselors which require at least one in-person meeting per month.

CMS Comments On ACO Participation Agreement Requirements

August 7th, 2015

MSSP ACO Agreement Requirements

CMS Comment Describing Provider Agreement Requirements for Participation In the Medicare Shared Savings Program

ACO Participation Agreement MSSP Participation Section 1899(b)(2)(B) of the Act requires participating ACOs to “enter into an agreement with the Secretary to participate in the program for not less than a 3-year period.” If the ACO is approved for participation in the Shared Savings Program, an executive who has the ability to legally bind the ACO must sign and submit a participation agreement to CMS (Sec.  425.208(a)(1)). Under the participation agreement with CMS, the ACO agrees to comply with the regulations governing the Shared Savings Program (Sec.  425.208(a)(2)).

In addition, the ACO must require its ACO participants, ACO providers/suppliers, and other individuals or entities performing functions or services related to the ACO’s activities to agree to comply with the Shared Savings Program regulations and all other applicable laws and regulations (Sec.  425.208(b) and Sec.  425.210(b)). The ACO must provide a copy of its participation agreement with CMS to all ACO participants, ACO providers/suppliers, and other individuals and entities involved in ACO governance (Sec.  425.210(a)). As part of its application, we currently require each ACO to submit a sample of the agreement it executes with each of its ACO participants (the “ACO participant agreement”). Also, as part of its application and when requesting the addition of new ACO participants, we require an ACO to submit evidence that it has a signed written agreement with each of its ACO participants. (See guidance on our Web site at

ACO Participation In MSSP Will Not Be Approved Unless The ACO Has An Agreement In Place With Participating Providers.

An ACO’s application to participate in the Shared Savings Program and any subsequent request to add new ACO participants will not be approved if the ACO does not have an agreement in place with each of its ACO participants in which each ACO participant agrees to participate in the Shared Savings Program and to comply with the requirements of the Shared Savings Program.

CMS Describes inadequate Provider Agreements From Previous Application Periods

In our review of applications to participate in the Shared Savings Program, we received many ACO participant agreements that were not properly executed, were not between the correct parties, lacked the required provisions, contained incorrect information, or failed to comply with Sec.  425.304(c) relating to the prohibition on certain required referrals and cost shifting. When we identified such agreements, ACOs experienced processing delays, and in some cases, we were unable to approve the ACO applicant and/or its ACO participant to participate in the Shared Savings Program. Consequently, we issued guidance for ACO applicants in which we reiterated the required elements for ACO participant agreements and strongly recommended that ACOs employ good contracting practices to ensure that each of their ACO participant agreements met our requirements (see

The ACO participant agreements are necessary for purposes of program transparency and to ensure an ACO’s compliance with program requirements. Moreover, many important program operations (including calculation of shared savings, assignment of beneficiaries, and financial benchmarking), use claims and other information that are submitted to CMS by the ACO participant. Our guidance clarified that ACO participant agreements and any agreements with ACO providers/suppliers must contain the following:

  • An explicit requirement that the ACO participant or the ACO provider/supplier will comply with the requirements and conditions of the Shared Savings Program (part 425), including, but not limited to, those specified in the participation agreement with CMS.
  • A description of the ACO participants’ and ACO providers’/suppliers’ rights and obligations in and representation by the ACO.
  • A description of how the opportunity to get shared savings or other financial arrangements will encourage ACO participants and ACO providers/suppliers to follow the quality assurance  and improvement program and evidence-based clinical guidelines.
  • Remedial measures that will apply to ACO participants and ACO providers/suppliers who do not comply with the requirements of their agreements with the ACO.

Agreement Must Be Direct With the Provider and Not Through an IPA

Our guidance also requires that the ACO participant agreements be made directly between the ACO and the ACO participant. We believe it is important that the parties entering into the agreement have a direct legal relationship to ensure that the requirements of the agreement are fully and directly enforceable by the ACO, including the ability of the ACO to terminate an agreement with an ACO participant that is not complying with the requirements of the Shared Savings Program.

Additionally, a direct legal relationship ensures that the ACO participant may, if necessary, terminate the agreement with the ACO according to the terms of the agreement without interrupting other contracts or agreements with third parties. Therefore, the ACO and the ACO participant must be the only parties to an ACO participant agreement; the agreements may not include a third party to the agreement. For example, the agreement may not be between the ACO and another entity, such as an independent practice association (IPA) or management company that in turn has an agreement with one or more ACO participants. Similarly, existing contracts between ACOs and ACO participants that include third parties should not be used.

We recognize that there are existing contractual agreements between entities (for example, contracts that permit organizations like IPAs to negotiate contracts with health care payers on behalf of individual practitioners). However, because it is important to ensure that there is a direct legal relationship between the ACO and the ACO participant evidenced by a written agreement, and because ACO participants continue to bill and receive payments as usual under the Medicare FFS rules (that is, there is no negotiation for payment under the program) we believe that typical IPA contracts are generally inappropriate and unnecessary for purposes of participation in the Shared Savings Program. An ACO and ACO participant may use a contract unrelated to the Shared Savings Program as an ACO participant agreement only when it is between the two parties and is amended to satisfy the requirements for ACO participant agreements under the Shared Savings Program.

Assure That Agreements Are In Correct Legal Names and Are Consistent With PECOS Information

It is the ACO’s responsibility to make sure that each ACO participant agreement identifies the parties entering into the agreement using their correct legal names, specifies the term of the agreement, and is signed by both parties to the agreement. We validate the legal names of the parties based on information the ACO submitted in its application and the legal name of the entity associated with the ACO participant’s TIN in the Provider Enrollment Chain & Ownership System (PECOS). We reject an ACO participant agreement if the party names do not match our records. It may be necessary for the ACO to execute a new or amended ACO participant agreement.

Although the ACO participant must ensure that each of its ACO providers/suppliers (as identified by a National Provider Identifier (NPI)) has agreed to participate in the ACO and will comply with program rules, the ACO has the ultimate responsibility for ensuring that all the ACO providers/suppliers that bill through the TIN of the ACO participant (that is, reassign their right to receive Medicare payment to the ACO participant) have also agreed to participate in the Shared Savings Program and comply with our program regulations. The ACO may ensure this by directly contracting with each ACO provider/supplier (NPI) or by contractually requiring the ACO participant to ensure that all ACO providers/suppliers that bill through its TIN have agreed to participate in, and comply with the requirements of, the Shared Saving Program. If the ACO chooses to contract directly with the ACO providers/suppliers, the agreements must meet the same requirements as the agreements with ACO participants. We emphasize that even if an ACO chooses to contract directly with the ACO providers/suppliers (NPIs), it must still have the required ACO participant agreement. In other words, the ACO must be able to produce valid written agreements for each ACO participant and each ACO provider/supplier. Furthermore, since we use TINs (and not merely some of the NPIs that make up the entity identified by a TIN) as the basis for identifying ACO participants, and we use all claims submitted under an ACO participant’s TIN for financial calculations and beneficiary assignment, an ACO may not include an entity as an ACO participant unless all Medicare enrolled providers and suppliers billing under that entity’s TIN have agreed to participate in the ACO as ACO providers/suppliers.

CMS Illustrations of Contracting Requirements for ACO Participation Agreements

To illustrate the requirement that all ACO providers/suppliers must agree to participate in and comply with the terms of the Shared Savings Program before the ACO can include the ACO participant’s TIN on its list of ACO participants, we offer the following scenarios that describe when an ACO participant’s TIN may and may not be included on the applicant’s ACO participant list:

Correct: A large group practice (Medicare-enrolled TIN) decides to participate in an ACO as an ACO participant. Its owner signs an agreement with the ACO on behalf of the practice to participate in the program and follow program regulations. Also, all practitioners that have reassigned their right to receive Medicare payments to the TIN of the large group practice have also agreed to participate and follow program regulations. Therefore, the ACO may include this group practice TIN on its list of ACO participants.

Incorrect: A large group practice (Medicare-enrolled TIN) decides to participate in an ACO as an ACO participant. Its owner signs an agreement to participate in the program and follow program regulations. However, not all practitioners that have reassigned their right to receive Medicare payment to the group practice TIN have agreed to participate in the ACO and follow Shared Savings Program regulations. Therefore, the ACO may not include this group practice TIN on its list of ACO participants.

Incorrect: Several practitioners in a large group practice (Medicare-enrolled TIN) decide to participate in an ACO. However, the group practice as a whole has not agreed to participate in the program. Therefore, the ACO may not include this group practice TIN on its list of ACO participants.

We propose to codify much of our guidance regarding the content of the ACO participant and ACO provider/supplier agreements.

b. Proposed Revisions

First, we propose to add new Sec.  425.116 to set forth the requirements for agreements between an ACO and an ACO participant or ACO provider/supplier. We believe the new provision would promote a better general understanding of the Shared Savings Program and transparency for ACO participants and ACO providers/suppliers. It is our intent to provide requirements that would facilitate and enhance the relationships between ACOs and ACO participants, and reduce uncertainties and misunderstandings leading to rejection of ACO participant agreements during application review. Specifically, we propose to require that ACO participant agreements satisfy the following criteria:

  • The ACO and the ACO participant are the only parties to the agreement.
  • The agreement must be signed on behalf of the ACO and the ACO participant by individuals who are authorized to bind the ACO and the ACO participant, respectively.
  • The agreement must expressly require the ACO participant to agree, and to ensure that each ACO provider/supplier billing through the TIN of the ACO participant agrees, to participate in the Shared Savings Program and to comply with the requirements of the Shared Savings Program and all other applicable laws and regulations (including, but not limited to, those specified at Sec.  425.208(b)).
  • The agreement must set forth the ACO participant’s rights and obligations in, and representation by, the ACO, including without limitation, the quality reporting requirements set forth in Subpart F, the beneficiary notification requirements set forth at Sec.  425.312, and how participation in the Shared Savings Program affects the ability of the ACO participant and its ACO providers/suppliers to participate in other Medicare demonstration projects or programs that involve shared savings.
  • The agreement must describe how the opportunity to receive shared savings or other financial arrangements will encourage the ACO participant to adhere to the quality assurance and improvement program and evidence-based medicine guidelines established by the ACO.
  • The agreement must require the ACO participant to update enrollment information with its Medicare contractor using the PECOS, including the addition and deletion of ACO professionals billing through the TIN of the ACO participant, on a timely basis in accordance with Medicare program requirements. The Agreement must also require ACO participants to notify the ACO within 30 days after any addition or deletion of an ACO provider/supplier.
  • The agreement must permit the ACO to take remedial action against the ACO participant, and must require the ACO participant to take remedial action against its ACO providers/suppliers, including imposition of a corrective action plan, denial of shared savings payments (that is, the ability of the ACO participant or ACO provider/supplier to receive a distribution of the ACO’s shared savings) and termination of the ACO participant agreement, to address noncompliance with the requirements of the Shared Savings Program and other program integrity issues, including those identified by CMS.
  • The term of the agreement must be for at least 1 performance year and must articulate potential consequences for early termination from the ACO.
  • The agreement must require completion of a close-out process upon the termination or expiration of the ACO’s participation agreement that requires the ACO participant to furnish data necessary to complete the annual assessment of the ACO’s quality of care and addresses other relevant matters.

Although we propose that the term of an ACO participant agreement be for at least 1 performance year, we do not intend to prohibit early termination of the agreement. We recognize that there may be legitimate reasons to terminate an ACO participant agreement. However, because care coordination and quality improvement requires commitment from ACO participants, we believe this requirement would improve the likelihood of success in the Shared Savings Program. We are also considering whether and how ACO participant agreements should encourage participation to continue for subsequent performance years. We seek comment on this issue.

ACOs That Choose To Contract Directly With ACO Providers/Supplier 

In the case of an ACO that chooses to contract directly with its ACO providers/suppliers, we propose virtually identical requirements for its agreements with ACO providers/suppliers. We note that agreements with ACO providers/suppliers would not be required to be for a term of 1 year, because we do not want to impede individual practitioners from activities such as retirement, reassignment of billing rights, or changing employers. In the case of ACO providers/suppliers that do not have a contract directly with the ACO, we are considering requiring each ACO to ensure that its ACO participants contract with or otherwise arrange for the services of its ACO providers/suppliers on the same or similar terms as those required for contracts made directly between the ACO and ACO providers/suppliers.

In addition, we propose to add at Sec.  425.204(c)(6) a requirement that, as part of the application process and upon request thereafter, the ACO must submit documents demonstrating that its ACO participants, ACO providers/suppliers, and other individuals or entities performing functions or services related to ACO activities are required to comply with the requirements of the Shared Savings Program. In the case of ACO participants, the evidence to be submitted must, consistent with our past guidance, include executed agreements or sample form agreements together with the first and last (signature) page of each form agreement that has been fully executed by the parties to the agreement.

However, we reserve the right, to request all pages of an executed ACO participant agreement to confirm that it conforms to the sample form agreement submitted by the ACO. We further propose at Sec.  425.116(c) that executed ACO participant agreements must also be submitted when an ACO seeks approval to add new ACO participants. The agreements may be submitted in the same form and manner as set forth in Sec.  425.204(c)(6). Finally, although we would not routinely request an ACO to submit copies of executed agreements with its ACO providers/suppliers or other individuals or entities performing functions or services related to ACO activities as part of the ACO’s application or continued participation in each performance year, we reserve our right to request this information during the application or renewal process and at any other time for audit or monitoring purposes in accordance with Sec.  425.314 and Sec.  425.316.

We believe that the proposed requirements regarding agreements between ACOs and ACO participants, together with our earlier guidance regarding good contracting practices, would enhance transparency between the ACO, ACO participants, and ACO professionals, reduce turnover among ACO participants, prevent misunderstandings related to participation in the Shared Savings Program, and assist prospective ACOs in submitting complete applications and requests for adding ACO participants. We believe that codifying these requirements would assist the ACO, ACO participants, and ACO providers/suppliers in better understanding the program and their rights and responsibilities while participating in the program. We solicit comment on the proposed new requirements and on whether there are additional elements that should be considered for inclusion in the agreements the ACO has with its ACO participants and ACO providers/suppliers.

Major Revamp of Nursing Home Regulations Proposed By CMS

July 17th, 2015

Nursing Home Regulations Proposed Revision CMSThe Centers for Medicare & Medicaid Services (CMS) has release new proposed regulations that would implement the first major rewrite of the long-term care Conditions of Participation in over 25 years. The proposed regulations were published on On July 13, 2015 in proposed form and are subject to a 60 day comment period before CMS issues them in final form. It is possible that CMS would revise the proposed rules based on input from the public duringthe comment period.

By changing nursing home regulations, CMS intends to improve the quality of care and safety affecting long-term care residents. The proposed changes would implement a number of safeguards including some protections that were required under the Affordable Care Act.

Providers involved in the nursing home industry should study the proposed regulations and may wish to provide comments to CMS to be addressed prior to finalization of the proposed regulations. Some of the items addressed in the proposed regulations include:

- Regulations regarding reduction of unnecessary hospital readmissions and infections

-increased quality of resident care

- New requirements to assure training of nursing home staff

- increased focus on patients with dementia and prevention of elder abuse.

- New rules regarding staffing decisions.

- Rules that help assure that staff members have the right skill sets and competencies to provide person-centered care to residents.

- Increased emphasis on resident preferences when developing care plans.

- Improvements to the process of care planning and discharge planning

- Increased authority of dietitians and therapy providers to write orders in their areas of expertise subject to physician delegatino and state law compliance.

- Requiring greater food choice for residents.

- Updating of infection prevention and control programs and establishment of new requirements for infection prevention and control.

- Enhancement of nursing home resident rights

More details can be obtained by reviewing the proposed regulations. We will be issuing additional updates regarding topics that are covered in the proposed regulations as we review the proposal in greated depth.

John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

Tel 715.845.4336
Fax 715.845.2718

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