Accountable Care Organizations Final Rule – Are Your Compliance Officers Prepared?

The Accountable Care Organization (ACO) is a new model of patient-centered health care that was first introduced under the Affordable Care Act.  The Centers for Medicare & Medicaid Services (CMS) established the ACO model to meet three main goals: (1) improve patient care; (2) improve health among different populations; and (3) reduce Federal health care spending. In a nutshell, ACOs should provide higher-quality care at a lower cost. To accomplish these goals, CMS is encouraging providers to combine into a larger organization—the ACO—through which ACO participants could provide patients with various levels of care, from primary to acute care. Ultimately, an ACO will become a one-stop shop for patients’ health care needs, which should improve the overall patient experience and minimize costs to Medicare. 

As many providers have been intimidated by the ACO model, CMS recently published final rules for ACO eligibility requirements and participation in the Medicare Shared Savings Program (Savings Program). This program gives ACO participants the opportunity to share in savings they generate for Medicare, if they meet certain quality standards.

The ACO model has the potential to significantly change the delivery of health care and help to reduce Federal spending. However, forming an ACO will be a risky venture for any organization because of both the financial and administrative burdens that ACOs will no doubt face to comply with CMS requirements

Eligibility Considerations

Under the Final Rules, ACOs must develop policies and procedures that aim to satisfy CMS’ key goals and to comply with the agency’s requirements for participation in the Savings Program. Further, the ACO must provide these policies and procedures as part of their applications to CMS. Thus, according to the final rule, ACO participants will need to work together to develop an administration capable of overseeing numerous providers and suppliers who will furnish services and products to thousands of Medicare beneficiaries. Furthermore, this administration will be charged with ensuring compliance with CMS’ rules throughout the entire organization.

Providers and suppliers who are considering forming an ACO and participating in the Savings Program should first consider the following:

  • How will the ACO coordinate patient care across ACO participants, including primary care physicians, specialists, and acute-care physicians?
  • How will the ACO be governed, and who will lead this governing body?
  • How will the ACO determine the number of professionals needed to provide high-quality care to thousands of patients and periodically account for all the ACO professionals as the organization adjusts to meet the patients’ needs?
  • How will the ACO create and update a quality assurance and improvement program?
  • How will the ACO create a mechanism to encourage “evidence-based medicine,” which ACO professionals can apply in their decision-making?
  • How will the ACO encourage patients and their families to take a more active role in their medical decisions, and implement a mechanism to rate patient experience?
  • How will the ACO monitor and report their quality improvement and cost reduction efforts?
  • How will the ACO maintain a “meaningful commitment” to the ACO’s goals and compliance to CMS requirements (i.e., through investing in software products, equipment and/or additional staff)?

These considerations should not be made by one executive alone. Rather, the task should be a collaborative effort by executives, department heads, and compliance officers who can assess and address the organization’s needs. The considerations above are not limited to the application process. Instead, the ACO administration should periodically reexamine the ACO to ensure that the organization lives up to CMS’ standards and the standards it created for itself during the application process.

Collaborative Compliance

The Final Rules also set forth requirements for ACO compliance programs. While the rules are similar to the Department of Health and Human Services (HHS) Office of Inspector General’s (OIG) guidance on compliance programs, compliance officers within an ACO should be aware of additional program requirements:

  • The ACO must employ a compliance officer that reports to the ACO’s governing body.
  • The compliance program must establish procedures to allow ACO employees, contractors and participants to report any compliance issues.
  • The compliance program must provide compliance education to everyone involved with the ACO.
  • The ACO must have a policy requiring all ACO employees, contractors and participants to report violations of the law to the appropriate law enforcement agency.

CMS recommends that ACOs develop their compliance programs through the collaborative efforts of the ACO participants and contractors. The individual compliance officers within each participating organization should also work together to develop a general compliance program for the entire ACO. 

Take Home Message

As the Savings Program moves forward, compliance officers should begin expanding their compliance efforts to oversee the activities of an entire ACO. In the coming months, compliance officers will have to:

  • Examine and update their policies and procedures to meet the Savings Program requirements.
  • Update compliance trainings to reflect the new requirements and to include all ACO participants, employees and contractors.
  • Expand auditing and monitoring programs to encompass the entire ACO.
  • Update existing work plans for 2012, taking into consideration the CMS eligibility requirements.
  • Examine the organization’s legal exposures and discover where the organization may be eligible for Stark, Anti-Kickback or Civil Monetary Penalty waivers. 
  • Review the organization’s structure and examine its budget and available resources.

Compliance officers whose organizations are considering forming an ACO have a daunting and time consuming task ahead. Given their current responsibilities, there would be substantial value in having a third party facilitate the implementation of these new requirements and provide an independent review for the organization.