ACO Update: Proposed ACO Fraud and Abuse Waivers Narrower than Expected

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Recently issued regulations and other notices for comments have given health care providers guidance on how to organize and operate accountable care organizations (ACOs) in order to be eligible to receive payments under Medicare’s Shared Savings Program. The Affordable Care Act (ACA), signed into law in March 2010, included incentives for the creation of ACOs. Congress established the ACO Shared Savings Program in the ACA to promote accountability of providers to patient populations and to coordinate services under Medicare as well as to encourage providers to make investments in infrastructure and to design care processes for highquality, efficient service delivery. Almost a year later on March 31, 2011, several federal agencies (CMS, OIG, DOJ, FTC and IRS) jointly announced the release of proposed rule making and guidance regarding the ACO program. The proposed rule and related guidance is expected to remove the existing legal impediments in the areas of fraud and abuse, antitrust, tax and privacy to allow for the development of ACOs, and provide guidance on such issues as eligibility to participate, governance, legal structure, quality and privacy.

The ACA authorizes the Department of Health and Human Services to waive certain fraud and abuse laws as necessary to carry out the provisions of the Shared Savings Program. CMS and OIG jointly issued a notice with comment period (Notice) describing how the agencies intend to exercise their waiver authority. The Notice does not include specific regulatory language. Rather, it describes the scope of the potential waivers being considered and seeks public input on additional or different waivers. Further, it clarifies that the OIG and CMS will base the final regulations on the outcome of the final CMS regulations implementing the Shared Savings Program.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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