American Hospital Association Suggests Substantial Changes to ACO Rules

The American Hospital Association (AHA) submitted its comments regarding CMS’ ACO proposed rule requesting “substantial changes” to “restore balance to the risk versus reward equation.” The AHA’s suggestions, outlined in a June 1 letter to CMS, were accompanied by a second letter to CMS and OIG regarding the ACO fraud and abuse waivers and a third letter to the DOJ, FTC, and HHS regarding antitrust enforcement policy.

ACO Rule – Citing “continued barriers to clinical integration,” the AHA suggested changes regarding shared savings, quality measures, and operational flexibility. The AHA urged CMS to allow all ACOs to share in first-dollar savings, reduce the number of initial quality measures, and assign beneficiaries prospectively.

Fraud and Abuse Waivers – In its letter to CMS and OIG regarding fraud and abuse waivers, the AHA wrote that the proposal “will provide little practical value” to potential applicants. According to the AHA, the Stark regime, premised on keeping providers at arm’s length, does not fit the ACO program, which is premised on integration and occasional in-kind contributions from participants. As such, the AHA stated that the Stark exceptions do not contemplate the exchange of value of ACO collaboration. Instead, the AHA suggested creation of a waiver covering ACO activities from formation through end of participation in the ACO program.

Antitrust Enforcement Policy – Calling the regulations applicable to the antitrust laws “deeply disappointing” and lacking in “actual guidance to aid the hospital field in moving forward with clinically integrated organizations,” the AHA outlined its concerns. The AHA commented that CMS lacks authority to issue antitrust regulations or delegate to the DOJ or FTC the authority to block certain ACOs. The AHA wrote that the proposed rule “transforms antitrust enforcement into a regulatory scheme.” The AHA also cited the burdensome cost and time commitment required to conduct the sophisticated ACO antitrust analysis and suggested that the mandatory review threshold is too low. Instead, the AHA suggested that antitrust regulations should be restored to its role of “creat[ing] or maintain[ing] the conditions of a competitive marketplace.”

The letters are available via the AHA website.