MSSP Final Rule ACO Eligibility Requirements, Application and Renewal Process

This is the second post in Health Care Law Today’s series on the final rule. This post addresses Eligibility Requirements, and the Application and the Renewal Process.

ACO Eligibility Requirements

Under the Medicare Shared Savings Program (“MSSP”) ACO Final Rule, CMS finalized new regulations that will change ACO eligibility requirements. The final rule will include new requirements for participation agreements with ACO participants and ACO providers/suppliers, a new process for reporting changes concerning ACO participants and providers/suppliers, as well as clarifications related to the structure and governance of ACOs. Additionally, the final rule requires an ACO to describe in its application for participation how it will encourage and promote the use of enabling technologies for improving care coordination for beneficiaries and how the ACO intends to partner with long-term care and post-acute care providers to improve care coordination for the ACO’s assigned beneficiaries.

• Participation Agreement. The final rule includes more detailed provisions regarding the content of the participation agreements with ACO participants, as well as with ACO providers/suppliers (should the ACO choose to enter into those agreements, as they are not required). Among other things, CMS emphasized the importance that participation in the MSSP be handled in a separate agreement than a general IPA or PHO participation agreement, as the agreement must include certain specific provisions related to MSSP participation and sufficient transparency for participating providers. Notably, despite the new requirements, CMS did not include provisions requiring ACOs to (i) share savings with ACO participants, or (ii) follow specific close out procedures at the termination of an agreement. While CMS encourages ACOs to be as transparent as possible and address these issues, it wished to preserve some flexibility and allow ACOs to put in place their own policies.

CMS acknowledges that it will be difficult for ACOs to incorporate these requirements into their ACO participant agreements for the 2016 performance year, so the requirements will not take effect until the 2017 performance year.

• Requirements for Submitting ACO Participant and Provider/Supplier Lists and Reporting of Changes. The final rule include more specificity related to the submission and updating of ACO participant and ACO provider/supplier lists, including the requirement that changes be submitted to CMS in PECOS within 30 days after the changes have occurred.
• Governance. The final rule clarifies that an ACO made up of at least two participants must be a new entity and cannot operate through existing entities. Additionally, the regulations clarify that the fiduciary duties of the board members of an ACO include the duty of loyalty. CMS did not finalize a proposal that would remove flexibility for ACOs to deviate from the requirements that ACO participants must hold at least 75 percent control of an ACO’s governing body. CMS noted, however, that it anticipated permitting such exceptions in very limited circumstances.

Application and Renewal Process

The final rule addresses two issues concerning the renewal and application process that were not addressed in the initial regulations. The first deals with the process and timing for CMS’ acceptance of an initial application for participation in the MSSP. The second is to rectify the silence in the current regulations concerning the procedure by which an ACO renews its participation in the MSSP.

• Initial Application Review. The final rule specifies that CMS approves or denies an application based upon:
  • Information submitted in the application by the specified deadline.
  • Supplemental information submitted by a specified deadline in response to CMS’ request for additional information.
  • Other information available to CMS, including specifically the ACO’s program integrity history.

CMS makes it clear that an application may be denied if the applicant fails to submit information by the required deadlines.

• Renewals. The final rule also, for the first time, specifies a process for renewal of a three-year participation agreement. The participating ACO must request renewal by a deadline and through a process to be established by CMS. As part of a renewal request the ACO must agree that CMS may share a copy of its renewal request with the Antitrust Agencies (DOJ and the FTC).

The new regulations also specify that CMS will evaluate a renewal based on the following factors:

• Whether an ACO has satisfied criteria for operating under its selected risk model.
• The ACO’s history of compliance with MSSP requirements.
• Whether the ACO has established that it is in compliance with eligibility and other requirements.
• Whether the ACO has met the quality performance standards during at least one of the first two years of the prior agreement period.
• Whether an ACO that has participated under a 2-sided model repaid loses owed.
• The results of a program integrity screening of the ACO, its participants and providers/suppliers.
• CMS will notify each ACO in writing of its approval or denial of the requested denial. A denial will specify the reasons and provide notice of the ACO’s rights for reconsideration.

ACOs Subject to Regulatory Changes

The final rule also specifies that ACOs are subject to all regulatory changes that “become effective during the agreement period” except for specified program areas. In the current regulations, one of the program areas that has been an exception is a regulatory change applicable to beneficiary assignment. The final rule eliminates this exception, such that changes regarding beneficiary assignment will apply to all ACOs in the middle of their 3-year agreement period, but such change is not to be effective until the start of next performance year.