The FTC and the Department of Justice issued the Proposed Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program last week with a public comment period up until May 31, 2011. The Medicare Shared Savings Program is contained in Section 3022 of the Patient Protection and Affordable Care Act. (“PPCA”) It is a sort of gain sharing program whereby the government will share cost savings with clinically integrated organizations of hospitals and providers who accept a Medicare population for care for at least three years. The savings are expected to be derived from efficiencies due to the clinical integration of providers and the management and oversight (accountability) of patient care. While this program being a Medicare based program is not subject to antitrust concerns, the agencies are providing guidance for those enterprises who wish to contract with commercial carriers as well as the government.
The agencies will provide “rule of reason” analysis to certain ACO’s that meet the criterial set forth in the CMS guidelines. Under the PPACA CMS will consider approval of ACOs that meet eligibility requirements such as 1) a formal legal structure that allows for the receipt and distribution of savings, 2) a leadership and management structure that includes clinical and administrative processes; )3 processes to promote evidence based medicine and patient engagement; 4) reporting on quality and cost measures ; and 5) coordinated care for beneficiaries.
The agencies will used a “streamlined” analysis to determine an ACO’s share of services in each ACO participant's Primary Service Area. The higher the share, the higher the perceived risk of market power. They set forth an “antitrust safety zone” where an ACO will not be required to contact the agencies for approval. The safety zone requires that an ACO have a combined share of 30 percent or less of each common service in each participant’s PSA. The PSA is defined as the “lowest number of contiguous postal zip cods from which the participant draws at least 75% of its patients for that service.”
There is a “rural exception” whereby ACOs may include one physician per specialty from each rural county on a non-exclusive basis and still qualify for the safety zone, even if inclusion causes the ACO’s share to rise above 30 %. There is also a “Dominant Provider Limitation” with a provider having over a 50% share in its PSA. They must be non-exclusive to the ACO to meet the requirements for the safety zone.
There is a mandatory agency review for all ACO’s exceeding the 50% PSA share threshold. The review is to be completed within 90 days of an application. The agencies will consider any information or alternative data suggesting that the PSA shares may not reflect the ACO’s actual market power in a given circumstance.
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