I. Background: HHS is Accelerating Medicare's Transition to ACOs 

In January, Department of Health and Human Services ("HHS") Secretary Sylvia Burwell announced that HHS is accelerating Medicare's transition to "alternative payment models."  HHS's goal is to shift 30 percent of all Medicare provider payments to alternative payment models by 2016 and for 50 percent of all Medicare payments to be in alternative payment models by 2018.1  These goals, according to HHS, will be achieved through the Medicare Shared Savings Program ("MSSP") accountable care organizations ("ACOs") and other alternative payment models.     

This enhanced emphasis on MSSP ACOs, combined with HHS's ambitiously short timeline for transitioning Medicare payments, will present special challenges and opportunities for health care providers currently affiliated with MSSP ACOs.  In addition, this rapid movement of Medicare dollars to MSSP ACOs will no doubt prompt many health care providers to contemplate some role with an MSSP ACO for the first time.

For health care providers just now giving serious consideration to MSSP ACOs, and even for health care providers already deeply involved with MSSP ACOs, the requirement of exclusivity within MSSP ACOs may be confusing and concerning.  The purpose of this memorandum is to summarize the exclusivity requirement and to provide an overview of possible alternatives.

II. Three Key Terms:  ACO Participant, ACO Provider/Supplier & Other Entity

These three terms are essential to understanding exclusivity and its limits within MSSP ACOs:

ACO participant: An ACO participant is an entity, identified by a Medicare enrolled Taxpayer Identification Number ("TIN"), that is used to bill Medicare for services furnished to Medicare fee-for-service beneficiaries.  An ACO itself is composed of one or more ACO participants.

  • An ACO participant is composed of one or more ACO providers/suppliers. 

ACO provider/supplier: An ACO provider/supplier is a Medicare enrolled provider or supplier that bills for items or services it furnishes to Medicare fee-for-service beneficiaries under a Medicare billing number assigned to the TIN of an ACO participant.

  • For example, a large group practice may qualify as an ACO participant.  A Medicare enrolled physician billing under the group practice TIN would be an ACO provider/supplier.
  • For purposes of defining an ACO provider/supplier:
    • A provider is a Medicare enrolled hospital (including a critical access hospital), a skilled nursing facility, a comprehensive outpatient rehabilitation facility, a home health agency and certain other specified Medicare enrolled entities.
    • A supplier is a Medicare enrolled physician or other practitioner, or a Medicare enrolled entity other than a provider. 

Other Entity: Other entity is the term commonly used to refer to an entity other than an ACO participant or an ACO provider/supplier that contracts with an ACO to provide health care services to Medicare fee-for-service enrollees assigned to the ACO.

Finally, please note that the term health care provider as used in this memorandum refers to both a provider and a supplier as defined above.

III. Exclusivity Applies Only to the TINs of ACO Participants "Upon Which the Assignment of Medicare Beneficiaries is Dependent"

1. Exclusivity & TINs

CMS recognized the necessity of creating a methodology for assigning Medicare beneficiaries to ACOs on an exclusive basis.  To that end, CMS opted to require the TIN of any ACO participant upon which the assignment of Medicare beneficiaries is dependent to be exclusively tied to a single ACO.  In other words, if the assignment of Medicare beneficiaries to an ACO is dependent upon the TIN of an ACO participant, the TIN may only be used for purposes of that particular ACO.  If that occurs, and if the health care provider that is the ACO participant desires to be an ACO participant in a second ACO, the health care provider would not be permitted to use the same TIN in connection with its role as an ACO participant in the second ACO.  Here is the exclusivity regulation:

"Each ACO participant TIN upon which beneficiary assignment is dependent must be exclusive to one Medicare Shared Savings Program ACO for purposes of Medicare beneficiary assignment.  ACO participant TINs upon which beneficiary assignment is not dependent are not required to be exclusive to one Medicare Shared Savings Program ACO."2 (emphasis added)

Significantly, the above-cited regulation does not apply the exclusivity requirement to the TINs of ACO providers/suppliers or other entities.  Furthermore, the regulation provides that the exclusivity requirement does not attach to the TINs of ACO participants upon which the assignment of Medicare beneficiaries is not dependent.

2. Dependent Upon

A closely related issue concerns how the assignment of Medicare beneficiaries to an ACO becomes dependent on the TIN of an ACO participant (thereby triggering the imposition of exclusivity upon the ACO participant's TIN).  Basically, CMS has designated certain evaluation and management services identified by HCPCS codes 99201 through 99215 (evaluation and management services, generally); HCPCS codes 99304 through 99340 (evaluation and management services at certain facilities, excluding hospitals); 99341 through 99350 (evaluation and management services at patients’ homes); G0402 (welcome to Medicare visit); G0438 and G0439 (wellness visits) as primary care services for purposes of assigning Medicare beneficiaries to ACOs3.  If a service identified by one of these HCPCS codes is provided to a Medicare fee-for-service beneficiary and the service is billed under the TIN4 of an ACO participant, the assignment of Medicare beneficiaries is deemed to be dependent upon the TIN and, consequently, the TIN becomes exclusive to the ACO participant's ACO5.

3.  Special Note for Non-Primary Care Health Care Providers 

For purposes of triggering exclusivity, the E&M services identified by the above-described HCPCS codes are deemed to be primary care services even if they are performed by non-primary care physician specialists.  Before becoming an ACO participant, a non-primary care health care provider needs to be aware that, if the health care provider becomes an ACO participant and one of the health care provider's physicians provides one of the designated E&M services for a Medicare fee-for-service beneficiary and the service is billed to Medicare under the health care provider's TIN, the health care provider's TIN will become exclusive to that particular ACO (thus precluding the health care provider from using the same TIN if it plans to be an ACO participant in more than one ACO).  To remedy this situation, CMS, in its December 8, 2014 MSSP proposed rule, proposed to exempt many physician specialties from the exclusivity requirement.  However, CMS also listed a number of non-primary care physician specialties (e.g., cardiology, obstetrics/gynecology), as well as multi-specialty groups, whose provision of the designated E&M services would continue to trigger exclusivity.     

IV. Alternatives to Exclusivity 

HHS's aggressive timeline for transitioning greater percentages of Medicare payments to MSSP ACOs will motivate some health care providers to consider affiliating, in some capacity, with more than one ACO.  For: (i) health care providers interested in being an ACO participant, but wanting to avoid exclusivity; and (ii) health care providers that are currently ACO participants, but wanting to affiliate with other ACOs, there are alternatives to exclusivity that will permit the health care providers to work with additional ACOs.  These alternatives are outlined below.

1. Using Separate TINs To Be an ACO Participant in More Than One ACO

As noted above, exclusivity attaches to the TIN of ACO participants upon which Medicare beneficiary assignment is dependent, not to the participants themselves.  In this regard, nothing in the applicable law indicates that an ACO participant may not obtain a separate TIN and, using that separate TIN, serve as an ACO participant in a second ACO.  In fact, in the preamble to the November 2, 2011 MSSP final rule, CMS, using the example of solo practitioners who have joined an ACO as ACO participants, states that the practitioners may nevertheless participate in another ACO if they use a different TIN:

"[W]hile solo practitioners who have joined an ACO as an ACO participant and upon whom assignment is based may move during the agreement period, they may not participate in another ACO for purposes of the Shared Savings Program unless they will be billing under a different TIN in that ACO6." (emphasis added) 

From a programmatic perspective, the TIN of an ACO participant is central to an ACO's beneficiary assignment and benchmarking, as well as for quality reporting and performance evaluation.  However, those functions, as they relate to an ACO, are in no way compromised if that same ACO participant obtains a separate TIN and, with the separate TIN, becomes an ACO participant in a second ACO.  Under such a scenario, the fact that the ACO participant has a TIN for the first ACO and a separate TIN for the second ACO will not conflate or otherwise disturb the respective TIN-based functions of the two ACOs.

A practical point:  although there is no legal barrier against a health care provider being an ACO participant in more than one ACO so long as the health care provider uses a separate TIN, there are other issues that warrant a cautious approach.  For example, a health care provider must have the resources (staffing, technology, finance, etc.) necessary to manage the numerous clinical and administrative demands inherent in being an ACO participant in multiple ACOs.  In addition, obtaining a separate TIN is not always a simple and timely process.  Finally, one of the most important considerations will be the health care provider's compliance with the applicable anti-fraud and abuse laws and/or the fraud and abuse-related waivers issued by HHS's Office of Inspector General.7

2. Entering Into an Other Entity Arrangement With Another MSSP ACO

In addition to ACO participants and ACO providers/suppliers, CMS recognizes the role of other entities in providing health care services to ACO assignees.  For a health care provider that is an ACO participant with an exclusive TIN, an other entity arrangement with a second ACO affords the health care provider an opportunity to provide health care services to the second ACO's assignees while remaining an ACO participant in the first ACO.  Consider the following:

  • Other entities are not entitled to receive a distribution of any shared savings, but an ACO can nevertheless agree to provide a distribution to an "other entity".
  • Other entities are required to comply with the MSSP regulations and any other applicable federal laws (including anti-fraud and abuse provisions) and must agree to certain record keeping requirements.  Other entities must also agree to be subject to audit by CMS.
  • Other entities do not appear on CMS's certified list of ACO participants and they will not be used for program operations such as assignment.  Therefore, they are not required to be exclusive to a single MSSP ACO8.

Simply stated, there are no MSSP programmatic issues, nor applicable laws, barring a health care provider that is an ACO participant with an exclusive TIN from having an other entity arrangement with another ACO.  Such an arrangement requires careful study9.  Nevertheless, the non-exclusive nature of other entity arrangements may be of interest to health care providers interested in working with more than one ACO. 

3. Physician Groups and Other Suppliers with Exclusive TINs:  Becoming an ACO Provider/Supplier in Another ACO 

With regard to physician groups and other suppliers10 (hereinafter collectively referred to as physician groups or physician group) that are ACO participants with exclusive TINs, such entities are apparently able to also serve as ACO providers/suppliers in other ACOs11.

A. Physician Groups Contracting With ACO Participants toProvide Services as ACO Providers/Suppliers  

The definition of ACO provider/supplier includes the requirement that the ACO provider/supplier bill for services "under a Medicare billing number assigned to the TIN of an ACO participant in accordance with applicable Medicare regulations12."  A physician group can satisfy this definition if it contracts with an ACO participant to provide services to the ACO's Medicare beneficiaries.  Under Medicare law, a physician group is permitted to assign its right to receive Medicare reimbursement to an entity enrolled in the Medicare program if there is a contractual arrangement between the physician group and the entity whereby the entity bills Medicare for the physician group's services13.  Thus, if a physician group contracts with an ACO participant to provide services to the ACO's Medicare beneficiaries, the physician group would be permitted to assign its right to receive Medicare payments for the services it provides to the ACO's Medicare beneficiaries to the ACO participant.  In doing so, the physician group's services would be billed by the ACO participant "under the Medicare billing number assigned to the TIN of … [the] ACO participant" and, as a result, the physician group would satisfy the definition of ACO provider/supplier.  This approach is described by CMS in the preamble to the December 8, 2014 MSSP proposed rule: 

"The Medicare-enrolled TINs of ACO participants, in turn, are associated with Medicare enrolled individuals and entities that bill through the TIN of the ACO participant.  (For example, in the case of a physician, the physician has reassigned to the TIN of the ACO participant his or her right to receive Medicare payments, and their services to Medicare beneficiaries are billed by the ACO participant under a billing number assigned to the TIN of the ACO participant)14."  (emphasis added) 

For a physician group that is currently an ACO participant with a TIN that is exclusive to the ACO, the physician group's ability to assign its right to receive Medicare payments to the TIN of an ACO participant in another ACO creates an opportunity for the physician group to also be an ACO provider/supplier in another ACO – barring any legal or programmatic constraints which, as indicated below, are not readily apparent.

B. No Apparent Legal or Programmatic Barriers

ACO providers/suppliers are fundamental to ACO operations.  Their services, and the data they generate, are the basis for the assignment of beneficiaries, ACO quality scores and reports, incentive payments, the calculation of shared savings and shared losses, and other matters.  Significantly, despite its essential role within an ACO, an ACO provider/supplier may nevertheless contract with multiple ACOs.  In the preamble to the November 2, 2011 MSSP final rule, CMS stated the following:

"We also clarify that an ACO provider/supplier can contractually agree to work with one or more ACOs by agreeing to implement, adhere to, and be accountable for that ACO's statutorily required processes15."

Although it is clear that, generally speaking, an ACO provider/supplier may work in more than one ACO, CMS has not yet expressly stated, in the case of a physician group that is an ACO participant with an exclusive TIN, whether the group is permitted to contract with an ACO participant in a second ACO to provide ACO provider/supplier services for the second ACO.  Nevertheless, the MSSP statute and regulations do not expressly forbid a physician group from engaging in the two roles simultaneously.  Moreover, from a programmatic perspective, it does not seem problematic for a physician group to engage in the two roles simultaneously.  Note the following:

  • When a physician group acts in its capacity as an ACO participant, all claims and other data related to the group in its capacity as an ACO participant (including the activities of the ACO providers/suppliers working under the group in the group's capacity as an ACO participant) will be pegged to the physician group's TIN; and when that same physician group acts in its capacity as an ACO provider/supplier for an ACO participant in another ACO, all claims and other data related to the group in its capacity as an ACO provider/supplier will be pegged to the TIN of the ACO participant in the other ACO that contracted with the physician group for the group's services as an ACO provider/supplier.
  • As CMS has clearly stated, an ACO provider/supplier can work in multiple ACOs without disrupting the respective operations of the various ACOs (e.g., assignment of beneficiaries, quality reports and incentive payments, calculation of shared savings and shared losses, etc.).  By extension, it seems reasonable to conclude that, so long as steps are taken to avoid confusion about which beneficiaries are assigned to which ACO, a physician group that is an ACO participant in an ACO can also serve as an ACO provider/supplier in a second ACO without disrupting the operations of either ACO.

V. Conclusion

Although the alternatives described in this memorandum may be permitted under the laws governing MSSP ACOs, health care providers should be mindful of the practical aspects of affiliating with more than one ACO.  For example, differing policies and procedures between and among multiple ACOs may be prohibitive.  In addition, legal constraints beyond the laws specifically governing MSSP ACOs must be considered (e.g., the anti-fraud and abuse laws).  Nevertheless, given HHS's accelerating transition to ACOs and other alternative care models, health care providers may benefit from the various options available to them for affiliating with ACOs.