Tag Archives: health reform

Overview of Methodology for Determining PSA Shares for Accountable Care Organizations Participating in the Medicare Shared Savings Program

by Patricia M. Wagner and Ross K. Friedberg

Among the criteria that the “Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program” (“Proposed Statement”) uses to evaluate an accountable care organization’s (“ACO’s”) risk of an antitrust challenge is the ACO applicant’s “market share” within each of its service lines. The market share is a measure of the share of services an ACO participant provides in its Primary Service Area (“PSA”) relative to other providers. The share of services that each ACO participant provides in its PSA is the key factor that the agencies are proposing to use for determining whether an ACO will receive “Safety Zone” protection from the antitrust laws or be subject to mandatory expedited review from the agencies in order to participate in the Medicare Shared Savings Program. To assist with the PSA analysis, we have provided in this alert a step-by-step description of the proposed method for calculating PSA shares as well as an illustration of the steps involved in calculating PSA shares.

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Overview of the FTC/DOJ Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program

by Patricia M. Wagner and Ross K. Friedberg

On April 19, 2011, the “Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program” (“Proposed Statement”) was published in the Federal Register. As noted in the Proposed Statement, the antitrust enforcement agencies (the Department of Justice Antitrust Division and the Federal Trade Commission issued the Proposed Statement in response to a perceived preference by potential accountable care organization (“ACO”) participants to operate in both the Medicare and commercial markets. In order to “maximize and foster opportunities for ACO innovation, the Agencies wish both to clarify the antitrust analysis of newly formed collaborations among independent providers that seek to become ACOs in the Shared Savings Program and to coordinate the antitrust analysis with CMS review of those ACO applications.” This alert provides an overview of the Proposed Statement.

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HEALTH REFORM: Overview of the FTC/DOJ Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program

On April 19, 2011, the “Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program” (“Proposed Statement”) was published in the Federal Register.[1] As noted in the Proposed Statement, the antitrust enforcement agencies (the Department of Justice Antitrust Division (“DOJ”) and the Federal Trade Commission (“FTC”)) issued the Proposed Statement in response to a perceived preference by potential accountable care organization (“ACO”) participants to operate in both the Medicare and commercial markets. In order to “maximize and foster opportunities for ACO innovation, the Agencies wish both to clarify the antitrust analysis of newly formed collaborations among independent providers that seek to become ACOs in the Shared Savings Program and to coordinate the antitrust analysis with CMS review of those ACO applications.”[2] This alert provides an overview of the Proposed Statement.

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HEALTH REFORM: Meeting the Requirements for Defining the "Essential Health Benefits Package": DOL Publishes Survey of Employer-Sponsored Coverage

On April 15, 2011, the U.S. Department of Labor (“DOL”) released a survey report that is being used to satisfy a requirement in the Patient Protection and Affordable Care Act (“ACA”) that the Secretary of Labor “conduct a survey of employer-sponsored coverage” as a condition precedent to the development of the “essential health benefits package” by the Secretary of Health and Human Services (“HHS”).[1] This DOL survey is the first step in the process laid out in the federal health reform law for establishing the minimum benefits package to be offered in the various health insurance exchanges for which subsidies and tax credits will be available. Under ACA, the Secretary of HHS ultimately has the discretion to determine the “essential health benefits package,” which goes to the heart of federal health reform by providing an adequate level of health insurance coverage to the uninsured and underinsured. That discretion is limited by certain conditions and requirements set forth in ACA.

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Government Seeks Comments on Employer Mandate Related Issues Under Health Reform

As part of the process of planning for implementation of health reform pursuant to the Affordable Care Act, the Department of Treasury, the Department of Labor and the Department of Health and Human Services are working together to develop a series of regulations and administrative guidance. One aspect of the Affordable Care Act provides that employers with 50 or more full-time employees will be considered “applicable large employers” subject to an employer mandate tax effective in 2014.  Under these rules, such large employers will be liable for excise taxes if they have any full-time employees that are certified to receive a premium tax credit or cost-sharing reduction in connection with enrollment in health insurance through a State Exchange and either the employer fails to offer to its full-time employees (and their dependents) the opportunity to enroll in an employer sponsored plan that provides “minimum essential coverage” or offers such a plan that is unaffordable.  These taxes will be assessed monthly and may be 1/12th of $2000 per full time employee (not counting the first 30 full time employees) in the case where no employer plan is offered.  Where a plan is offered but it is unaffordable (as determined under the rules), the tax scheme will be lesser of 1/12 of $3,000 times the number of employees receiving a premium tax credit or 1/12 of $2,000 times the number of full time employees (not counting the first 30 employees in the calculation).   The definition of full-time employee is critical in determining whether and, if so, to what extent an employer may incur these free-rider liabilities. 

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CMS Announces State Demonstration Project Initiative for Dual Eligibles: Is Your State on the List?

by Lynn Shapiro Snyder and Amy F. Lerman

On April 14, 2011, the U.S. Department of Health and Human Services announced several initiatives that will offer states more flexibility to adopt innovative new practices in order to provide better and more coordinated care for Medicare and Medicaid enrollees who are dually eligible under both of these programs. Under one of these initiatives, 15 states have been awarded $1 million contracts to support the design of state demonstration projects that will aim to improve the coordination of care for dual eligibles. The Centers for Medicare & Medicaid Services (“CMS”), through its newly formed Federal Coordinated Health Care Office, will evaluate the projects proposed by the 15 states. CMS hopes to implement the top strategies as soon as 2012. Providers and payors in selected states who currently treat a significant number of dual eligibles may want to contact their agency representatives to help influence the way in which their state intends to pursue this demonstration project initiative.

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HEALTH REFORM: CMS Announces State Demonstration Project Initiative for Dual Eligibles: Is Your State on the List?

On April 14, 2011, the U.S. Department of Health and Human Services (“HHS”) announced several initiatives that will offer states more flexibility to adopt innovative new practices in order to provide better and more coordinated care for Medicare and Medicaid enrollees who are dually eligible under both of these programs.[1] Under one of these initiatives, 15 states have been awarded contracts to support the design of demonstration projects that will aim to improve the coordination of care for people with Medicare and Medicaid coverage (collectively, the “Selected States”). Although these demonstration projects, if implemented, will be separate from the recently proposed federal rules on accountable care organizations (“ACOs”), providers and payors considering ACO initiatives may want to take these demonstration projects into account because the Medicare Shared Savings Program could include dual eligibles. Also, providers and payors in selected states who currently treat a significant number of dual eligibles may want to contact their agency representatives to help influence the way in which their state intends to pursue this demonstration project initiative.

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HEALTH REFORM: CMS Holds First Teleconference Related to Sunshine Law for Pharmaceutical, Biotechnology, and Medical Device Companies

On March 24, 2011, the Centers for Medicare & Medicaid Services (“CMS”) held a teleconference,[1] titled “Transparency Reports and Reporting of Physician Ownership or Investment Interests.[2] During the teleconference, CMS provided interested parties with the opportunity to publicly comment on certain topics related to the implementation of Section 6002 of the Patient Protection and Affordable Care Act (“PPACA”). These topics included (1) additional forms and natures of payments and transfers of value to be considered by CMS for reporting; (2) accessibility to, and usability of, the reported data for consumers; and (3) mechanisms for accurate, efficient, and cost-effective reporting of data. CMS announced that “draft regulations” will be issued later this year and that interested parties would have the opportunity to also comment on these draft regulations. See “Federal Transparency Is Now a Reality: Challenges and Opportunities for Pharma, Devices, and PBMs” for an overview of Section 6002 of PPACA.

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HEALTH REFORM: Government Regulators Issue Proposed Regulations Interpreting the ACO Requirements

Earlier today, the Centers for Medicare & Medicaid Services released the long- awaited proposed regulations implementing the Medicare Shared Savings Program. A copy of these regulations can be found by clicking here: CMS Proposed Regulations. In addition, the Federal Trade Commission and Department of Justice also issued a joint statement, entitled “Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program.” This statement can be found by clicking here: DOJ/FTC Proposed Statement.

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HEALTH REFORM: Awaiting the Medicare Shared Savings Program Regulations: Progress on the Road to Accountable Care?

According to the Administrator of the Centers for Medicare & Medicaid Services (“CMS”), Dr. Donald M. Berwick, the long-awaited proposed regulations implementing the Medicare Shared Savings Program[1] should be out soon. Given the incredible proliferation of policy, business, and legal thinking about accountable care organizations (“ACOs”) that has taken place since the passage of the Affordable Care Act (“ACA”) less than a year ago, CMS’s initial effort to describe a program of payment and delivery reform built around the ACO “model” will contribute importantly to the national dialogue on accountable care and will give providers a first look at CMS’s detailed requirements for the Medicare Shared Savings Program.

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