Under the watchful eye of federal regulatory agencies, accountable care organization (ACO) formation could stall because of legal challenges.
"[S]ome existing federal laws and regulations could slow or even prevent the formation of accountable care organizations (ACOs) serving the neediest Americans," according to a press release about the University of California Berkeley Law report released yesterday.
The statutory and regulatory challenges around self-referrals, competition, and taxes could impede ACO development, particularly among safety-net providers, according to the report.
- Anti-self-dealing rules: Under the proposed Medicare Shared Savings Program, organizations and providers are encouraged to provide care across the continuum. However, the existing Stark Law and anti-kickback statutes may prevent providers from giving referrals, which the Office of the Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS) addressed with proposed waivers. The report calls on the regulatory agencies to provide more guidance on how to identify when an ACO is self-dealing and exceptions to direct compensation.
- Issues on market power concentration: The coordinated care model could lend itself to a dominant market power, including a concentration of specialists, through mergers and acquisitions. The report recommends that CMS offer incentives or other rewards for specialists who collaborate with safety-nets, arguably those who are not motived by financial gains.
- Tax code compliance: ACOs must carefully structure their participation because they may or may not be tax exempt even if they identify themselves as such. The Internal Revenue Service hasn't directly addressed tax-status on ACOs yet, which the report calls for.
- read the press release
- read the Berkeley comments to CMS (.pdf)
- check out the white paper (.pdf)
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