The Abcs of Acos

Raymund C. King, MD, JD, lives in Plano, TX. Rachel V. Rose, JD, MBA, lives in Houston, TX. Martin R. Merritt, JD, lives in Dallas, TX. John Okray, JD, MBA, LLM, lives in Fort Worth, TX.

Contents Introduction and Ground Rules: The ABCs of Physician-Owned ACOs ix Notes xiv About the Authors xv 1 Accountable Care Organizations 1 Health Insurance in America: A Brief History 3 Medicare and Medicaid Insurance 4 "A Broke and Broken System" 8 ACA's Attempt to Address Health Care Fiscal Crisis 10 How ACA Accountable Care Organizations and Shared Savings Programs Should Help 12 Accountable Care Organizations 13 The Shared Savings Program 13 Some Questions Remain with the Shared Savings Program 15 Notes 16 2 ARRA/HITECH/HIPAA and the Business Associate Agreement 19 Overview 19 The History of ARRA/HITECH/HIPAA 20 What is a Business Associate Agreement? 21 When Should a Business Associate Agreement Be Utilized in the Context of ACOs? 23 Conclusion 26 Notes 26 3 Federal and State "Fraud and Abuse" Laws and Medical Ethics 29 The History of Fraud, Waste, and Abuse Laws 29 Safe Harbors and Waivers of Fraud and Abuse Laws 32 Reporting Requirements 34 The Problem Presented by ACOs and "Shared Savings" Programs 35 AMA Ethics Opinions May Complicate Matters 36 AMA Opinion 8.0321-Physicians' Self-Referral (Full Text) 36 AMA Ethics Opinion 8.051-Conflicts of Interest under Capitation (Full Text) 38 State Fraud and Abuse Laws 39 Conclusion 40 Notes 41 4 ACOs Accountable Care Organizations and Respondeat Superior 45 Overview 45 What Is Respondeat Superior? 46 The Traditional Application of Respondeat Superior 47 How Are ACOs Impacted by the Doctrine of Respondeat Superior? 49 Conclusion 51 Notes 51 5 Antitrust Matters 55 Enforcement Agencies and Private Parties 55 Overview of Relevant Antitrust Laws 56 The Application of the Sherman Act: Evolutions of the "Per Se" Rule, "Rule of Reason" Test, "Inherently Suspect" Test, and Financial Integration 57 Per Se Illegal 59 Rule of Reason 59 Inherently Suspect 60 Ancillary Restraints Doctrine 60 Federal Agency Health Care Antitrust Guidance before the Affordable Care Act 61 Joint Statements of Antitrust Enforcement Policy in Health Care 61 Statement of the Department of Justice and the Federal Trade Commission Enforcement Policy on Physician Network Joint Ventures ("Statement 8") 62 Safety Zones under Statement 8 62 Rule of Reason under Statement 8 63 Per Se Illegal under Statement 8 63 Statement of the Department of Justice and the Federal Trade Commission Enforcement Policy on Multiprovider Networks ("Statement 9") 64 Antitrust Guidelines for Collaborations among Competitors 65 Improving Health Care: A Dose of Competition 65 Clinical Integration in Health Care: A Check-Up 66 Federal Agency Antitrust Guidance on ACOs after the Affordable Care Act 67 DOJ and FTC Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program ("ACO Statement") 68 Safety Zone under the ACO Statement 68 Rule of Reason under the ACO Statement 69 Ancillarity under the ACO Statement 69 Conduct for ACOs to Avoid 70 Voluntary Agency Antitrust Review 70 FTC Advisory Opinions Related to Health Care Joint Ventures 72 Developments since the ACO Statement 73 Conclusion 74 Notes 74 6 ACOs and the Impact on Bundle Payments and Value-Based Purchasing 79 Overview 79 Value-Based Purchasing 80 Bundled Payments 81 The Ability of ACOs to Capitalize on Bundled Payments and Value-Based Purchasing 82 Conclusion 84 Notes 85 7 How to Communicate Effectively with Physicians 89 Introduction and Cultural Comparisons 89 Medicine 90 Law 90 Educational Background 91 Financial Realities 91 Surgeons 93 Invasive Non-Surgeons 93 Non-Surgeons 93 Surgeons 94 Non-Surgeons 94 Physician Groups 95 Real World Application: The Physician-Owned ACO 96 8 Determining a Corporate Structure for the ACO 99 Subchapter C Corporations 108 Subchapter S Corporations 109 Limited Liability Companies 111 Partnerships 112 Notes 117 Exhibit 1: Sample ACO Participation Agreement 127 9 The Accountable Care Organization Participant Agreement 119 Sample Signature Page (Recommended Format) 124 Examples 125 Notes 126 10 Medical Ethics and Accountable Care Organizations 137 Introduction 137 The Medicare ACO Shared Savings Program in General 139 Governance and Ethics 140 Acceptance of ACOs by Beneficiaries and Acceptance of Beneficiaries by ACOs 141 Ethics in Referrals between Members of an ACO 142 AMA Opinion 3.04: Referral of Patients 142 AMA Ethics Opinion 8.056: Physician Pay-for-Performance Programs 143 Opinion 8.051: Confl of Interest under Capitation 144 Relation to State Laws 145 Notes 146 11 Congratulations, You Are an Accountable Care Organization. Now What? 149 Index 159