The Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG) have finalized a rule designed to “remove legal and regulatory barriers that can impede care coordination in furtherance of the Shared Savings Program” and “reduce burden on ACOs, ACO participants, and ACO providers/suppliers.” Specifically, the rule allows ACOs, ACO participants, and ACO providers/suppliers to seek to comply with one or more specified waivers so that they have assurance that participating in certain arrangements would not subject them to liability under the physician self-referral law (Stark Law), federal anti-kickback statute, or the beneficiary inducements civil monetary penalties (CMP) law provision. According to CMS, the waivers “are critical to providing stakeholders with flexibility necessary for innovative care redesign.”

Note that while an earlier November 2011 interim final rule with comment period on the MSSP/ACO waivers also addressed waivers of the application of the CMP law provision relating to gainsharing arrangements, the final rule dropped these provisions because this issue was subsequently addressed by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The rule explains that MACRA revised the Gainsharing CMP so that it prohibits hospitals from knowingly making payments, directly or indirectly, to induce physicians to reduce or limit “medically necessary” services provided to Medicare or state health care program beneficiaries under the physician’s direct care. Thus payments by hospitals to induce physicians to reduce or limit medically unnecessary services no longer implicate the Gainsharing CMP. In other words, explains CMS, “arrangements between hospitals and physicians that incentivize greater efficiency and reduction of waste, which previously may have run afoul of the gainsharing CMP, would no longer implicate the provision, provided those arrangements do not involve reductions or limitations in medically necessary care.”

The rule is effective October 29, 2015. Reed Smith will be providing additional analysis on the final rule in the near future.