The Office of Inspector General (OIG) and Centers for Medicare and Medicaid Services (CMS) recently extended the interim final rule (Interim Rule) on fraud and abuse waivers for accountable care organizations (ACOs) participating in the Shared Savings Program. This means that ACOs will continue to benefit from the waivers provided under the Interim Rule until November 2, 2015, or such earlier date as the Interim Rule is replaced by a final waiver rule.

Shared Savings Program and Interim Rule

Arising out of the Affordable Care Act of 2010, the Shared Savings Program is an initiative which is intended to encourage development of ACOs with the goal of improving quality of care for Medicare beneficiaries, while also reducing costs for beneficiaries and the Medicare program as a whole. In furtherance of the Shared Savings Program and ACO development, the OIG and CMS issued the Interim Rule, which appeared in the November 2, 2011 Federal Register.

The Interim Rule establishes waivers of certain federal fraud and abuse laws for arrangements involving ACOs participating in the Shared Savings Program. Specifically, the Interim Rule created the following five waivers. The first three identified below are waivers of the Stark Law, the Anti-Kickback Statute (AKS), and the Civil Monetary Penalties law prohibiting hospital payments to physicians to reduce or limit services (Gainsharing CMP Law); the fourth is a waiver of AKS and the Gainsharing CMP Law; the fifth is a waiver of AKS and the Civil Monetary Penalties law prohibiting inducements to beneficiaries. A more detailed description of the five waivers is available in the Interim Rule itself.

  1. ACO Pre-Participation.This waiver applies to ACO-related start-up arrangements that will take part in the Shared Savings Program.
  2. ACO Participation.This waiver applies to ACOs during their participation in the Shared Savings Program and for a specified time thereafter.
  3. Shared Savings Distributions.This waiver applies to distributions and use of shared savings generated pursuant to the Shared Savings Program.
  4. Compliance with the Stark Law.This waiver applies to ACO arrangements that implicate Stark, but meet an exception.
  5. Patient Incentive.This waiver applies to medically-related incentives offered by ACOs participating in the Shared Savings Program to beneficiaries for the purpose of encouraging preventive care and following treatment plans.

Implications of Extension

Had CMS and the OIG not extended the Interim Rule, it would have expired on November 2nd with no final rule to replace it. Without the Interim Rule or a final rule, Shared Savings Program participants who had been relying on the Interim Rule’s waivers for the past three years would have faced significant legal uncertainty. By extending the Interim Rule, the government managed to avoid that scenario, which would likely have hindered new entries into the Shared Savings Program and left current participants with a lot of questions. Most importantly, when they issued the extension, CMS and the OIG pointed out that it should not be interpreted as a sign that they may not establish permanent waivers at all. Rather, they expressly noted that permanent waivers, which they believe are vital to the continued success of the Shared Savings Program, remain the ultimate goal.

For potential and actual ACO participants, the extension means that it is business as usual for the time being. In the meantime, CMS and the OIG have invited stakeholders to provide them with feedback on the current waivers to help facilitate their preparation of the final rule.