CMS Issues Final Rule for Waivers in Connection With the Shared Savings Program

King & Spalding

On October 29, 2015, CMS issued its Final Rule setting forth waivers of the application of the physician self-referral law (the Stark law), the Federal anti-kickback statute (AKS), and the civil monetary penalties (CMP) law provision relating to beneficiary inducements, to specified accountable care organizations (ACOs) arrangements under section 1899 of the Social Security Act (the Shared Savings Program).  The Final Rule became effective October 29, 2015, upon publication in the Federal Register.

The Final Rule sets forth detailed eligibility requirements for the following five waivers:

  1. An “ACO Pre-Participation Waiver” of the Stark law and the AKS that applies to ACO-related start-up arrangements in anticipation of participating in the Shared Savings Program, subject to certain limitations, including limits on the duration of the waiver and the types of parties covered;
  2. An “ACO Participation Waiver” of the Stark law and the AKS that applies to ACO-related arrangements during the term of the ACO’s participation agreement under the Shared Savings Program and for a specified time thereafter;
  3. A “Shared Savings Distribution Waiver” of the Stark law and AKS that applies to distributions and uses of shared savings payments earned under the Shared Savings Program;
  4. A “Compliance With the Physician Self-Referral Law Waiver” of the AKS for ACO arrangements that implicate the Stark law but satisfy the requirements of an existing exception; and
  5. A “Patient Incentive Waiver” of the Beneficiary Inducements CMP and the AKS for medically-related incentives offered by ACOs, ACO participants, or ACO providers/supplies under the Shared Savings Program to beneficiaries to encourage preventative care and compliance with treatment regimes.

The foregoing waivers were finalized as promulgated in the interim final rule, with the exception of the following changes made in the Final Rule:

  • The waivers no longer waive the CMP for “Gainsharing”;
  • For the ACO Pre-Participation and ACO Participation waivers to apply, the ACO governing body’s documentation of its authorization “must” (changed from “should”) provide the basis for the documentation that an arrangement is reasonably related to the purpose of the Shared Savings Program; and
  • CMS clarified that for purposes of the Final Rule, the term “home health supplier” means “a provider, supplier or other entity that is primarily engaged in furnishing home health services.”

Reporter, John Whittaker, Sacramento, +1 916 321 4808,

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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