House and Senate Dems want CMS to drop ACO REACH members due to fraud concerns

Nearly two dozen House and Senate Democrats are pressing the Biden administration to remove 10 organizations with documented fraud and waste from the controversial ACO REACH payment model that starts next year.  

The letter, released by a collection of 21 House and Senate lawmakers last week, is the latest scrutiny to befall the alternative payment model, which aims to give physician groups a pathway to take on high financial risk and get savings in exchange for meeting spending and quality targets. 

“The ability of organizations with known histories of fraud and abuse to take part in the program increases the risks for Medicare beneficiaries and raises concerns that [Centers for Medicare & Medicaid Services (CMS)] screening procedures for participants are inadequate, putting taxpayer dollars at risk,” according to the letter sent to CMS on Dec. 8.

The lawmakers cite a review conducted by the Physicians for a National Health Program (PNHP), an organization that advocates for single-payer healthcare, that explored the 99 entities participating in the Direct Contracting Model, the predecessor to ACO REACH. The 10 organizations dinged by the analysis were also accepted into ACO REACH, which starts its first performance period Jan. 1 and will have more than 200 entrants. 

The new voluntary model offers full or partially capitated payments to physicians if they agree to meet certain spending and quality metrics. The Center for Medicare and Medicaid Innovation (CMMI) transitioned Direct Contracting into ACO REACH after concerns from progressive lawmakers surrounding the role of private equity.

“We have long been concerned about ensuring this model does not give corporate profiteers yet another opportunity to take a chunk out of traditional Medicare,” the letter said. 

The lawmakers, led by Sen. Elizabeth Warren, D-Massachusetts, and Rep. Pramila Jayapal, D-Washington, singled out 10 participants that have a history of fraud and abuse in the Medicare program. Warren and Jayapal (the head of the House Progressive Caucus) have previously raised concerns about Medicare Advantage (MA) plans that use tools such as upcoding to make patients appear sicker than they are to inflate risk scores and get higher payments.

One of the participants the PNHP singled out is a subsidiary of Sutter Health, which reached a $90 million federal settlement over allegations of mischarging MA and submitting unsupported diagnosis codes to get higher payments from Medicare.

Another organization singled out was Cigna for an ongoing lawsuit filed by the Justice Department over alleged MA overpayments.

Major insurers Centene and Humana have also been highlighted in the analysis surrounding allegations of duplicative Veterans Affairs claims. According to an audit by the Department of Health and Human Services inspector general in April 2021, a Humana Inc. health plan for seniors in Florida improperly collected nearly $200 million in 2015 by overstating how sick some patients were.

The lawmakers asked CMS a series of questions about the methods the agency is using to screen ACO REACH participants. It also wants to know what protections it will employ to clamp down on fraud and abuse.

CMS told Fierce Healthcare that it has received the letter from the lawmakers and will respond accordingly. 

Advocates for ACO REACH have previously countered that the model is vital toward putting Medicare “on a more sustainable financial path and improve patient care,” according to a statement from the National Association of ACOs. 

The group, which represents ACOs, added in a fact sheet that most participants in ACO REACH have a history of participating in value-based care programs and a “long track record of upholding solid, quality patient care.”

CMMI introduced the ACO REACH model earlier this year with some changes that appeared to address progressives’ initial concerns with Direct Contracting.

These include a requirement that an ACO REACH model must have 75% of its governing board be made up of providers compared with 25% under Direct Contracting.

Another key change is the requirement for participants to create and implement a health equity plan that would identify gaps in care and strategies to mitigate them. 

But concerns among PNHP and progressive lawmakers have continued even after the overhaul. 

“We think the model is misguided and it is designed in such a way that it is an invitation to fraud,” said Stephen Kemble, M.D., a PNHP board member, in an interview with Fierce Healthcare. 

The progressives’ concerns come amid heightened scrutiny from Capitol Hill over MA. Sen. Ron Wyden, D-Oregon, has pressed plans over aggressive MA marketing tactics in response to an increase in complaints.