This is the second post in Health Care Law Today’s series on the proposed rule. Click here to read the first post.

Solutions and opportunities may be on the horizon for post- acute providers (“PAPs”) and hospitals participating (or thinking of participating) in ACOs that have reservations about taking on additional downside cost risk associated with the current Medicare Shared Savings Program (MSSP) model.

In releasing the proposed rules for ACOs, CMS requested comment on the advisability of waiving certain Medicare program requirements that apply to how patient care is delivered and reimbursed in order to permit MSSP ACOs to better manage risk. CMS acknowledged that very few ACOs have opted to participate in the two-sided track and many may leave the program rather than participate in a track with down-side risk. The two-sided track rewards the ACO for savings but also requires them to share losses and many ACOs that are now in the one-sided track (rewards only) may leave the program rather than be exposed to losses under the two-sided track. In the proposed rules, CMS has also proposed an additional two-sided model that shares risks and rewards at higher levels (“Track 3”) than the original two-sided model (“Track 2”).

To encourage ACOs to remain in the MSSP and manage risk, CMS seeks comments on whether it should exercise its waiver authority with respect to certain statutory Medicare requirements. CMS requests stakeholder views on whether, for certain MSSP ACOs, it should waive the requirement that:

  • Skilled nursing facility services provided to a beneficiary be preceded by a 3-day hospital stay to be eligible for Medicare reimbursement;
  • Reimbursement for home health services be limited to beneficiaries who are homebound;
  • Telehealth services be limited to certain originating sites and geographic locations to be reimbursed through Medicare; and
  • Hospital discharge planners refrain from recommending certain participating PAPs (while preserving beneficiary choice).

In effect, CMS acknowledges that reimbursement rules must be more flexible to allow providers to choose the optimal locus of care and, without such flexibility, ACO providers simply will not assume the risk of loss to Medicare from inefficiently delivered services.

CMS is also requesting comments on the scope and application of these proposed waivers including: whether waivers would apply to all ACOs or only those electing Track 3 or those electing either Track 2 or 3; whether the waiver should be paired with a particular beneficiary assignment methodology (i.e., only prospective); whether the waiver should only apply to ACO- participating PAPs; and what types of monitoring would be required to insure violations of fraud and abuse laws do not occur such as patient steering, stinting on care, illegal remunerations, and deceptive marketing practices.

Hospitals and PAPs now in MSSP ACOs, thinking of entering these ACOs, or thinking of renewing their MSSP ACO CMS agreements are well advised to seize this opportunity to comment on these proposed waivers as these changes potentially, more than any other feature of the new rules (save possibly beneficiary assignment), have the opportunity, if implemented properly, to achieve significant savings and improved care coordination. Providers with the ability to identify patient populations that can benefit from these waivers and then to implement the waivers successfully (as evidenced in proven data) will be at the vanguard of an increasingly competitive and dynamic post- acute environment. CMS specifically cited its positive experience with certain of these waivers from a cost savings standpoint with Pioneer ACOs and Medicare Advantage plans. Therefore, the likelihood of positive development on this front is high.

Truly, this is “speak now or forever hold your peace” moment as CMS is clearly signaling that waiver flexibility in some fashion is on the horizon. If waivers such as the above are developed this will no doubt lead to the continued consolidation of the PAP sector since coordination of clinical, IT, financial and quality requirements will function optimally with a more integrated operating platform.