Does Beneficiary Switching Create Adverse Selection For Hospital-Based ACOs?

https://www.healthaffairs.org/do/10.1377/hblog20190410.832542/full/?utm_source=Newsletter&utm_medium=email&utm_content=Beneficiary+Switching+And+Hospital-Based+ACOs%3B+Biologics+Are+Natural+Monopolies%3B+An+Average+Lifetime+Earnings+Standard+For+Drug+Prices&utm_campaign=HAT+4-15-19&

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Despite the many uncertainties in the current health care delivery environment, payers and providers continue to demonstrate considerable interest in alternative payment models, including Medicare Shared Savings Program (MSSP) accountable care organizations (ACOs). At the same time, concerns persist about the ability of the MSSP to provide a sustainable pathway toward transformation for health care providers and to generate savings to the Medicare program, a key outcome measure. In fact, an August 2018 Health Affairs blog post by Seema Verma, director of the Centers for Medicare and Medicaid Services (CMS), concludes that the net financial impact of the program is negative to taxpayers, and that hospital-based ACOs tend to be the drivers of this overall negative performance.

This analysis has influenced recent changes to the MSSP under the “Pathways to Success” rule, with major policy implications for participants and the program’s long-term sustainability. In particular, CMS’s analysis describes physician-led ACOS as low revenue and hospital-based ACOs as high revenue, concluding that the former had net savings of $0.182 billion, while the latter had net losses of $0.231 billion. Similarly, J. Michael McWilliams and colleagues conclude that physician-group ACOs had significantly larger savings than hospital-integrated ACOs. It has been suggested that these differences are due to hospitals continuing to pursue the high-cost activities that physician-led ACOs do not pursue, due to differing reimbursement incentives (for example, hospital revenue is more dependent on admissions, and so care management activities that avoid admissions are less robust in hospital-based ACOs). This finding has influenced new program rules allowing physician-led ACOs to stay in a lower-risk track of the MSSP longer than hospital-based ACOs.

Our MSSP experience at University of Wisconsin (UW) Health—the academic health system partner of the University of Wisconsin School of Medicine and Public Health—leads us to believe that there is an alternative explanation for hospital-based ACOs’ seemingly poorer financial performance. Specifically, as Medicare beneficiaries develop new and more complex diseases, the increased utilization they require leads them to facilities that have more specialized care, which may more likely be part of a hospital-based ACO than a physician-led one. 

A Closer Look At The Research

Several recent analyses have countered that the CMS analysis, which assesses program financial performance by comparing ACO spending to a benchmark target below which the ACO may share in savings, does not use a valid counterfactual. A more valid counterfactual would instead compare ACO actual spending to what the same providers’ Medicare spending would have been had they not participated in the ACO program. Analyses using this counterfactual have found that the MSSP has in fact produced savings for the taxpayers overall, although some have also concluded, such as CMS, that hospital-based ACOs perform worse than physician-led ACOs.

More recently, the Medicare Payment Advisory Commission analyzed spending at the individual beneficiary level, rather than the ACO level. The analysts found that individuals who were continuously attributed to the same ACO year after year had lower spending growth compared to those whose attribution was switched to a different, existing ACO from one year to the next. At UW Health, our experience as an MSSP ACO from 2013 through 2017 supports this finding and illustrates some of the potential pitfalls in the recent policy changes for MSSP ACOs. 

UW’s Analysis: Adverse Selection Among “Switchers”

UW Health participated in the MSSP Track 1 from 2013 through 2017, before switching to the Next Generation ACO program. We compared patient characteristics and use for the cohort of our attributed beneficiaries older than age 65 for whom we had 12 months of claims data in 2015 and who, in 2016, continued to be attributed to us, versus beneficiaries who were newly attributed to us in 2016 (Exhibit 1).

Exhibit 1: Spending And Use of Continuously And Newly Attributed Medicare Beneficiaries, UW Health ACO, 2015–16

Source: Authors’ analysis. Notes: HCC is Hierarchical Condition Category. PBPY is per beneficiary per year. aHCC scores are calculated to assess patient complexity and risk. A higher score is associated with increased complexity and increased expected cost. Under 2016 MSSP rules, PBPY costs are adjusted based on beneficiary HCC scores calculated from the prior year, adjusted up only for demographic changes. Therefore, the 2016 PBPY average costs in the exhibit reflect risk adjustment using 2015 HCC scores. 

While 96 percent of continuing beneficiaries in 2016 were attributed to us through services from a primary care provider, only 73 percent of those new to the ACO in 2016 received their attribution this way. In other words, more than one in four of the “switchers” were assigned to the ACO due to services from a specialty care provider. Costs for these two populations (calculated from data CMS provides to ACOs as part of program participation) were very different. The average per-beneficiary-per-year (PBPY) cost in 2015 for continuously attributed beneficiaries was $8,123, or $1,380 higher than the newly attributed population’s PBPY cost of $6,743. However, in 2016, the average PBPY cost for continuously attributed beneficiaries was $723 lower than the 2016 average PBPY cost for newly attributed beneficiaries, and costs for the newly attributed cohort rose by 49.3 percent, compared with 15.1 percent for the continuously attributed group. This suggests that the newly attributed beneficiaries experienced a significant change in their health status after being attributed to our ACO, resulting in a dramatic rise in use, and also potentially explaining their high degree of specialty care attribution.

Our findings suggest that adverse selection among individuals whose attribution “switched” into hospital-based ACOs may at least partly explain the differential financial performance of physician-based versus hospital-based ACOs. As noted previously, it is possible that the increased use these patients require leads them to facilities that have more specialized care, which may more likely be part of a hospital-based ACO than a physician-led one. For example, our ACO, made up of not only the faculty physician group but also the hospital and clinics and school of medicine and public health, includes a comprehensive cancer center. Beneficiaries newly attributed to our ACO in 2016 were almost twice as likely to have a new diagnosis of cancer in 2016 compared with continuously attributed beneficiaries (6.1 percent versus 3.3 percent—not shown).

Current MSSP Risk Adjustment May Not Adequately Address The High Complexity Of “Switchers”

Because many of the newly attributed beneficiaries were both high cost during the performance year and low cost during the prior year, they entered our program with low Hierarchical Condition Category (HCC) scores, under the system used by CMS to adjust for risk. In fact, almost 10 percent of newly attributed beneficiaries in 2016 had no health care use at all in 2015 (Exhibit 1). Prior to the Pathways to Success program, negative health status changes for continuously enrolled beneficiaries were not included in risk adjustment. For continuously attributed beneficiaries, CMS adjusted risk scores down from the previous year if the HCC score decreased but used only demographic changes to adjust up. Those beneficiaries who were healthy with little to no health care use in 2015 but with a significant change in health status in 2016 had low HCC scores coming into 2016, despite both high risk and use during the 2016 performance year. As a result, a cohort of relatively high-cost beneficiaries in 2016 would not be accounted for in that year’s risk score, resulting in an unfavorable assessment of an ACO’s true financial performance.

New program rules attempt to address concerns about adequate risk adjustment in the MSSP, allowing for a one-time benchmark increase of up to 3 percent to account for unexpected higher use due to increased complexity and health care needs among all attributed beneficiaries. While this change is generally welcomed by the MSSP community, our experience suggests it may be inadequate to account for the added complexities of switchers. The average HCC score for newly attributed beneficiaries to our ACO was 1.01 (Exhibit 1). These scores are based on the group’s health care use in 2015, when the newly attributed cohort was still “healthy,” but they were used during the 2016 performance year. However, calculated scores from the actual experience of the patients during 2016 reveals an average HCC score of 1.34, again indicating that they experienced significant changes in health status. While the new policy of allowing for an increase helps account for these changes, 3 percent may not be adequate.

Prospective Attribution May Mitigate Some Of The Impact Of Adverse Selection

The methodology for attribution of Medicare beneficiaries to ACOs has been a topic of debate since the inception of the MSSP. Under the original model, individuals were assigned to an ACO based on retrospective attribution, meaning that they received a plurality of their services from primary care providers throughout the performance year. If they received no services from a primary care provider, they could be attributed based on services from a specialty care provider. Over the years, CMS has refined the process to increase the likelihood that attribution is based on services from a primary care provider. This results in an ACO not knowing until after the year is over who exactly are their ACO beneficiaries, making it possible for individuals who were in a different ACO the previous year (or not in an ACO at all) to become part of an ACO without that ACO becoming aware until after the fact.

Some of the newer ACO models, notably the Next Generation ACO program, use prospective attribution, whereby only those beneficiaries who received care from the ACO providers in the prior year can be included in the performance year. This method allows for removal of beneficiaries throughout the year but no additions. Under the previous regulations, beneficiaries in MSSP Track 1 were attributed retrospectively, potentially resulting in ACOs becoming responsible for previously healthy individuals who were not part of the ACO in the prior year but whose health status deteriorated during the performance year, thereby driving up average costs without the ACO having meaningful opportunity to intervene. Under the new MSSP regulations, ACOs annually choose whether beneficiaries are assigned through retrospective or prospective attribution, potentially mitigating some of the adverse selection concern.

Looking Ahead

Going forward, it will be important for policy makers and evaluators alike to consider unique program elements that may result in adverse selection or other untoward consequences that are beyond the control of an individual ACO. In the meantime, CMS and ACO leaders can make some choices that help ameliorate some of the unintended or undesirable consequences. CMS can continue to look for ways to evolve program rules, including consideration of additional risk-adjustment methodologies. ACO leaders can choose prospective attribution to avoid adverse selection, especially if their ACO includes hospitals or large specialty groups. CMS can also eliminate the disparities in the program rules between hospital-based and physician-led ACOs, at least until there is increased clarity around differential performance. Ultimately, continued evaluation and program refinement, allowing for successful participation by all different types of ACOs, will be necessary to ensure that all Medicare beneficiaries receive the highest-quality, affordable care and that the program is a good steward of taxpayer funds.

 

 

Scale: blessing or burden for statewide ACOs?

https://www.healthcaredive.com/news/scale-blessing-or-burden-for-statewide-acos/551206/

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Scale can smooth out quality variation and assuage providers’ fears of taking on risk. But it’s not a catch-all solution.

A handful of accountable care organizations are moving to cover an entire state, but not everyone thinks bigger is better when it comes to population health management.

Caravan Health, a company that works with ACOs, last week announced the launch of its second statewide program, this time in Florida. In the model, any of the 200-some Florida Hospital Association facilities that want to participate can join together to provide coordinated care.

The bid is meant to bolster care quality for Medicare beneficiaries while lowering costs and risk for participating facilities. But some experts say the larger scale, like rampant consolidation, could be more like an anchor weighing down an ACO instead of a beam propping it up.

“At the end of the day, success or failure is based on success in managing the quality of care,” Michael Abrams, partner at Numerof & Associates told Healthcare Dive. “While there may be some bigger numbers involved, I think the safety angle that they’re selling may not be all it’s cracked up to be.”

Caravan has no plans to back down on the model, however, and plans to roll out two more statewide ACOs in the next couple of weeks.

ACOs existed before the Affordable Care Act, but in 2011 HHS released new rules under the landmark law aimed at helping providers coordinate care through the population health management programs. Since then, the number of ACOs have grown dramatically, from an estimated 32 to more than 1,000 in 2018, according to Leavitt Partners.

A statewide all-payer ACO in Vermont has seen some success, but Caravan’s model and its efforts are some of the first to leverage the programs over a much larger population.

The business model

The Florida ACO, created in partnership with the FHA, is the second from Kansas City-based Caravan. The first, in Mississippi, was launched in January. Under the program, hospitals have access to Caravan’s population health management model to build primary care capacity and monitor quality results.

Mississippi currently has 29 providers participating in the program, managing care for roughly 130,000 Medicare patients in 22 locations. Its operations include hiring and training population health nurses throughout the state, annual wellness visits, chronic care management and more.

It’s potentially a good business playbook for both parties. The hospital association captures a revenue stream that’s not dependent on their membership — increasingly important in these days of sharp provider headwinds — and Caravan is granted access to the Medicare lives of a couple hundred hospitals in the state.

The need for population health management is especially acute in Mississippi, which ranks last or close to last in every leading health outcome, according to the state Department of Health. Florida and Mississippi couldn’t be farther apart when it comes to their primary care infrastructure, a factor linked to ACO success. According to the NCQA database, Florida has 894 patient-centered medical homes. Mississippi has 74.

“With population health, we improve the health of our state so it’s a win-win all the way around,” Paul Gardner, the director of rural health at the Mississippi Hospital Association told Healthcare Dive.

And Caravan, which currently works with more than 225 health systems and 14,000 providers, touts its track record with its programs. In 2017, its ACOs beat nationwide ACO performance with savings of $54 million and quality scores of 94%, a spokesperson said.

By comparison, studies have yielded mixed results when it comes to ACO success elsewhere.

An April report from Avalere found the Medicare Shared Savings Program, a CMS model to foster ACOs in Medicare, missed federal cost-savings projections from 2010 by a wide margin and raised federal spend by $384 million.

But a National Association of ACOs analysis retorted that MSSP ACOs saved $849 million in 2016 alone, and a whopping $2.66 billion since 2013 (higher than CMS’ $1.6 billion estimate). And an early 2017 JAMA Internal Medicine analysis found ACO savings only increase with time.

Scale: protection or illusion?

The threat of financial loss is a leading obstacle to participation in ACOs. Smaller ACOs are more likely to experience widely variable savings and losses simply due to change, Caravan representatives say, while larger ACOs deliver more predictable and sustainable results.

“The only way we can create certainty around our income is to have processes and accountability and the infrastructure, but you’ve also got to have to scale,” Caravan CEO Lynn Barr told Healthcare Dive. Barr said that since Caravan’s 2014 inception, the company has found having 100,000 Medicare lives or more in an ACO yields larger savings than the roughly 80-85% of ACOs with only 20,000 lives or fewer.

As the owner of the ACOs, Caravan assumes 75% of the financial risk for providers. Barr said that evens out to a maximum risk of $100 per patient.

By comparison, in the basic track of the Medicare Shared Savings Program, the maximum risk for providers is $400 per patient. In the enhanced model it’s $1,500. “With our model, if people follow it and have 100,000 lives, there’s no reason they would ever write a check,” Barr said.

That is one of the selling features of the statewide ACO: It can be a mitigating factor for hospitals that might feel too exposed on their own, Abrams said.

But the threat of risk could still prove too much. CMS finalized new rules for shared savings ACOs in December, shaving down the amount of time they had before they were forced to assume downside risk from six year to two years for new ACO participants or three years for new, low-revenue ACOs.

And some critics say it’s a safe bet that the losses incurred by any one organization are not going to be spread across the other parties in the ACO, especially given the shortened timeline. As the deadline for assuming more risk approaches, Caravan could see attrition among providers who don’t feel ready.

“I think this is very, very, very challenging,” nonprofit primary care advocacy Patient-Centered Primary Care Collaborative Director Ann Greiner told Healthcare Dive. “Most of the hospital leadership has not been working under these kinds of conditions.”

And ACOs are all about a connection to the community, which might prove difficult to foster across an entire state.

“You’ve got to leverage people at the community level and have those relationships with the patient and, in the ideal world, know where to refer,” Greiner said. “At the state level, that’s pretty far removed.”

Unified governance, heterogeneity pose problems

The scale of large ACOs makes them much more difficult to manage, experts say. ACOs have a single set of policies that, in an organization involving more parties, needs to be adopted in one form or another that’s acceptable to all participating providers.

That’s done by majority, Barr said. Each participating provider has a single vote and the overall vote binds the ACO board’s decision on waiver approval, discharge standards, shared savings distribution plans and more.

But in an ACO with a lot of differently cultured and structured providers — academic hospitals, teaching hospitals, acute care, research, small, medium, large etc. — it can get a lot more complicated, Abrams said. For example, if 100 FHA hospitals opt into the new Caravan Health model, that’s 100 variations in acute care policy, physician compensation and all else involved in managing cost and quality operations, and 100 different voices strongly advocating to keep doing things the way they’ve always done them.

“Some issues are just working through the details,” Gardner from the Mississippi Hospital Association said. “In some of your larger systems, that’s getting the medical staff all pulled together and singing off the same sheet of music.”

The more homogeneous the ACO organizations are, the easier it will be to get them to buy in to the various policies and procedures that need to be put in place for operations to flow smoothly. “You can’t outsource that,” Abrams said. “The most you can do is get guidance from someone who’s perhaps been around this block about how to handle it.”

Barr maintains Caravan standardizes the most important factors.

“Nurses are critical to this model,” Barr said. “That’s what everyone’s doing the same.” Caravan has found that after nurses are trained in population health management over three to six months, each dollar the company spends on that provider produces two dollars in savings.

And, after Caravan puts the population health management infrastructure in place, the providers themselves helm the ship with a steering committee, leveraging data to see what differentiates them from the next community and making slight adjustments to course-correct.

Challenges for hospitals

Hospitals will face two challenges: taking in the coordinated framework given to them by Caravan and translating it into behavioral change, Abrams said. The success of the overall ACO will depend on the latter as “those who can’t do that successfully will probably self-select out when it comes time to take on risk.”

The question is whether Caravan can really deliver on some of the promises it’s explicitly making.

“The truth is that hospitals who haven’t had the infrastructure to manage their cost and quality are not better off in terms of consolidation and a position in a larger ACO,” Abrams said. “So an ACO comprised of multiple small hospitals and independent hospitals can’t expect savings proportionate to their aggregate size.”

With more statewide ACOs on the way, it’s important Caravan (and partnering providers) work out any kinks in the model sooner rather than later.

“This is not like bringing in a plumber to fix your faucet,” Abrams said. “At the end of the day, an organization stands on its own.”

 

 

HOW EMPLOYERS ARE FIXING HEALTHCARE

https://hbr.org/cover-story/2019/03/how-employers-are-fixing-health-care

https://www.healthleadersmedia.com/strategy/how-employers-are-fixing-healthcare?utm_source=silverpop&utm_medium=email&utm_campaign=ENL_190314_LDR_FIN_resend%20(1)&spMailingID=15292235&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1601132792&spReportId=MTYwMTEzMjc5MgS2

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A 56-year-old man who works at Walmart — we’ll call him Bill — had been suffering from mild neck pain for years. Recently the pain had worsened, and his wife noticed a subtle tremor in his hands. An MRI showed some narrowing of the spinal column along with disc degeneration. A local surgeon explained that Bill’s best option was spine surgery.

 

The noble aim of being a great subcontractor

https://gisthealthcare.com/weekly-gist/

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Earlier this month I was at a health system board meeting in which we were discussing the transition from volume to value, and the shift to a population health model. One board member had the courage to ask a tough question: “What if we never get there?” Covering just a small slice of a large metropolitan area, this system has consistently ranked third in market share behind two larger competitors—and now they feel they are lagging those systems in moving toward risk. The most recent challenge: a large—and until recently, loyal—independent primary care group had just been acquired by one of their competitors. Yet the system prides itself, justifiably, on delivering low-cost hospital care and outstanding quality.

I raised a heretical notion: suppose the system pursued a strategy focused solely on being the highest-performing inpatient and specialty care provider in the market, and abandoned the goal of bearing population risk? Could the system shift their focus to simply being the best “subcontractor” to other risk-bearing networks in the market?

The ensuing conversation was uncomfortable, to say the least. The notion challenged the system’s assumptions of the role they wanted to play in the market, and whether they could be a leader in population health. I encouraged them to think of being a “subcontractor” to other risk-bearing organizations not as a defeat, but as fulfillment of a vital role—healthcare in their community would be better if more hospital care were delivered at their level of cost and quality.

Our view: for many smaller systems who are driven by a desire to remain independent, becoming a high-performing care subcontractor may be the best path forward, and the most realistic. (It will be interesting to watch the successful investor-owned chains on this front—organizations whose strategic advantage lies in running highly-efficient, low-cost hospitals.) It’s not as sexy as “population health”, but as any builder will tell you, there’s no substitute for a great subcontractor.

Duke, UNC Health among health systems to join value-based program with Blue Cross NC

https://www.fiercehealthcare.com/payer/duke-wake-forest-among-health-systems-to-join-value-based-arrangement-blue-cross-nc

Duke Medical

Five major health systems are teaming up with one of North Carolina’s largest insurers to launch a new value-based care program.

Duke University Medical Center, University of North Carolina Health Care, Wake Forest Baptist Health, WakeMed Health and Hospitals, Cone Health and their respective accountable care organizations (ACOs) will join the new program led by Blue Cross and Blue Shield of North Carolina (Blue Cross NC).

Under the new program, called Blue Premier, Blue Cross NC and the health systems will be jointly responsible for better health outcomes and patient experiences while lowering costs. The idea is to make providers share risk for higher costs and inefficiencies in the healthcare system in exchange for reaping the rewards of the savings.

The total payments to the health system under Blue Premier will be based on the health systems’ ability to manage the total cost of care and their overall performance.

“Historically, our healthcare system pays for services that may or may not improve a patient’s health, and our customers simply cannot afford this approach,” said Patrick Conway, M.D., Blue Cross NC president and CEO and the former head of the Center for Medicare and Medicaid Innovation (CMMI), in a statement. “Moving forward, insurers, doctors and hospitals must work together, and hold each other accountable for improving care and reducing costs.”

The news comes just a month after Blue Cross NC announced a partnership with Aledade, a well-funded startup that partners with primary care physicians to build and lead ACOs, to launch a new initiative that will support hundreds of independently owned and operated primary care physician clinics in the state in value-based care.

The insurer has an established history of working with the health systems to find ways to drive down costs. In August, Blue Cross NC worked out a deal with UNC Health in a move that reduced premiums on the ACA exchange. However, at the same time, the insurer cut ties with WakeMed and Duke Health by discontinuing its Blue Local exchange.

Blue Cross NC has said that by 2020, it plans to have at least half of its members with a provider who is working under a value-based contract. 

 

 

Loosening Up Stark and Anti-Kickback Laws: What Would It Look Like?

https://mailchi.mp/burroughshealthcare/pc9ctbv4ft-1611881?e=7d3f834d2f

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The Department of Health and Human Services under the Trump administration has taken a deregulatory approach toward healthcare delivery. Its efforts on the payer side includes expanding the availability of individual health insurance policies that don’t conform to the rules of the Affordable Care Act, and more recently liberalizing the use of tax credits to purchase them.

However, the HHS has made one of its boldest proposals on the provider side. Over the summer, the Centers for Medicare & Medicaid Services issued a request for information (RFI) regarding potentially loosening up the Stark and anti-kickback laws.

Originally signed into law in 1972, the Anti-Kickback Statute barred any sort of renumeration to a provider to induce the referral of a patient. The Stark Law, enacted in 1990, bars doctors from referring Medicare or Medicaid patients to any ‘designated facility’ in which they have any form of a financial relationship. Both laws have been updated – and strengthened – numerous times in the intervening years. The HHS’ proposed changes would signal a shift away from how those laws are interpreted.

According to Mark Hardiman, partner with the Nelson Hardiman healthcare law firm in Los Angeles, the move represents a desire by HHS “to move all payments away from fee-for-service and make the providers at risk on both the upside and downside.”

Although the proportion of fee-for-service payments made to Medicare providers has shrunk in recent years, it still comprises the majority. A total of $392 billion in Medicare fee-for-service payments were made in 2017, according to the Kaiser Family Foundation, 56 percent of all payments made from the program. Although that’s down from 70 percent of all Medicare payments made a decade prior, the continuing aging of the Baby Boomer population and healthcare cost inflation is putting pressure on CMS and HHS to find ways to continue to pare back costs. Coordinated care initiatives such as accountable care organizations comprise just a small fraction of all Medicare payments, and many providers are balking about taking on too much downside financial risk when forming accountable care organizations.

 According to HHS, the intent is to make it easier for providers to implement value-based care initiatives. “Removing unnecessary government obstacles to care coordination is a key priority for this administration,” said HHS Deputy Secretary Eric Hargan of the rationale behind the regulatory review. “We need to change the healthcare system so that it puts value and results at the forefront of care, and coordinated care plays a vital role in this transformation.”

Nonetheless, the hospital sector has been generally supportive of regulatory changes. In testimony to a U.S. House Ways and Means subcommittee over the summer, Michael Lappin, chief integration officer at Advocate Aurora Health, observed that strict liability rules discourage value-based arrangements.

So, what would the healthcare delivery environment resemble with looser regulations governing both laws?

   According to Hardiman, the changes HHS is seeking to the regulations are far from sweeping.
“They are really on the margins, and they are not signaling a fundamental shift in the enforcement of the Stark and  Anti-Kickback Law,” he said. 

Why would there not be a major regulatory unraveling? Hardiman notes that doing so would create chaos in healthcare delivery. Moreover, qui tam(whistleblower) lawsuits in healthcare have become a major source of income for attorneys, and they would object to too much of an unwinding. Data from the non-profit watchdog organization Taxpayers Against Fraud bears that out: Of the more than $3.7 billion in False Claims Act settlements reached in 2017, $2.4 billion involved litigation involving healthcare enterprises. It was the eighth consecutive year that healthcare case settlements topped $2 billion. Hardiman also noted that more and more litigation is being settled for large sums even when the U.S. Justice Department declines to intervene in a case.

Hardiman believes that if the regs are loosened, they would likeliest be in the form of a “series of fraud and abuse waivers.” They would cover initiatives such as managed care ventures or ACOs, making it easier for hospitals and physicians to collaborate on care coordination, as well create models to more equitably share expenses and profits and encourage cross-referrals.

“You are going to see a much more comprehensive definition as to what types of risk-sharing arrangements will not be reviewed as renumeration under the kickback statute,” Hardiman said. “I wouldn’t be surprised to see safe harbors around Medicare Advantages, ACOs, and participants in other innovative risk-sharing arrangements.”

Individual physicians and medical groups may also have the opportunity to pay inducements to patients to lose weight or engage in another health-enhancing activity – something they are currently barred from doing under most circumstances.

“Everybody knows we’re heading toward a value-based coordinated care model,” Hardiman said. “And promoting and incentivizing it is still a risky business. You want at least some practical guideposts.” 

 

Report Looks at ACO Management Alliances

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A new paper published in Milbank Quarterly examines the up and coming industry seeking to manage accountable care organizations and what these companies do and why certain ACOs have choosen to partner with them.

Trust, Money, and Power: Life Cycle Dynamics in Alliances Between Management Partners and Accountable Care Organizations focused on two Medicaid ACOs, finding that tensions typically emerged over power and financial issues.

Using data collected between 2012 and 2017, revealed that management partners brought specific skills and services and also gave providers confidence in pursuing an ACO but, difficulties generally emerged over decision‐making authority, distribution of shared savings, and conflicting goals and values.

To read the report, click here.