Top 10 Issues in APM Contract Negotiations 1) Negotiations over - - PDF document

5/30/2017 1 Legal Issues in New Contracting and Risk Sharing Models - What To Know Before You Sign

Alexis Finkelberg Bortniker Foley & Lardner LLP 617-226-3177 Abortniker@foley.com June 2, 2017

Top 10 Issues in APM Contract Negotiations

1) Negotiations over high cost outliers

– Responsibility for high cost drug therapies

2) Reinsurance

– Physician Incentive Plan Rules

3) Risk pool calculations and participants

– Off-cycle enrollment – Off-cycle physician enrollment/disenrollment

4) Antitrust issues

– Data Access and Anti-Trust

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Top 10 Issues in APM Contract Negotiations cont…

5) Preauthorization requirements 6) Medical necessity and retrospective review

– Underutilization monitoring

7) Data access

– What you will get – Who will have access – Who owns the information – What will you be required to share

Top 10 Issues in APM Contract Negotiations cont…

8) Downstream compliance liability 9) In-network negotiation, buy-in and compliance 10) Understanding payment parameters and potential for upside

– Upside and downside potential parameters

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But first… Back to Basics

• Renewed importance in definition of terms

– Assignment of Members – Quality metrics – Included and excluded expenses – Included and excluded services

• Example: definition of “Readmission”

You cant forget fraud and abuse compliance…

– ACO waivers and state/federal push to use APMs creates

a false sense of freedom

– Must assess

• Federal Kickback, Stark and CMP Issues when dealing with MA

and potentially Medicaid or other federal healthcare programs.

• MA AKS rules when dealing with commercial health plans
• MA Medicaid regulations when dealing with Medicaid agreements.

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Other Massachusetts Compliance Issues

• HPC Material Change Filings

– Corporate Affiliations, Contracting Affiliations, Clinical

Affiliations, Discount Arrangements

• Registration of Provider Organizations

Risk Bearing Provider Organization

• Risk Bearing Certificate Requirements

– http://www.mass.gov/ocabr/government/oca-agencies/doi-lp/risk-certificate-application-

information.html

– A Provider Organization shall not be permitted to enter into an arrangement with either

a Carrier or a Public Health Care Payer whereby the Provider Organization or any entity with which the Provider Organization has a Contracting Affiliation manages the treatment of a group of patients and bears Downside Risk according to the terms of an Alternative Payment Contract, or other alternative payment arrangement as part of an insured health benefit plan network, unless the Provider Organization obtains a Risk Certificate or a Risk Certificate Waiver, as applicable

– Definition of Alternative Payment Methodologies or Methods: “Methods of payment that

are not solely based on fee for service reimbursements; provided, however, Alternative Payment Methodologies may include, but shall not be limited to, shared savings arrangements, bundled payments, and global payments; and further provided, Alternative Payment Methodologies may include fee for service payments, which are settled or reconciled with a bundled or global payment.”

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ACO Compliance Requirements

Compliance program requirements applicable to MSSP ACOs.

• The MSSP regulations at 42 C.F.R. § 425.300 (the “Regulations”) explicitly require that a

MSSP ACO’s compliance program have the following elements:

–

A designated compliance officer who is not legal counsel (but who may be a lawyer) and who reports directly to the ACO’s governing body;

–

Mechanisms for identifying and addressing compliance problems related to the ACO’s operations and performance;

–

A method for employees or contractors of the ACO, ACO participants, ACO providers/suppliers and other individuals or entities performing functions or services related to the ACO to anonymously report suspected problems related to the ACO to the compliance officer;

–

Compliance training for the ACO, the ACO participants, and the ACO providers/suppliers; and

–

A requirement for the ACO to report probable violations of law to an appropriate law enforcement agency.

–

The ACO must also update its compliance program periodically to reflect changes in law and regulation.

• The RFR model agreement for the Model A ACO includes robust contractual requirements for a compliance program that

incorporates the federal Managed Care Organization program integrity requirements at 42 C.F.R. § 438.608. To adhere to the contractual requirements, a MassHealth ACO’s compliance program must include:

– Written policies, procedures, and standards of conduct that articulate the ACO’s commitment to comply with all applicable federal and state standards; – A designated compliance officer and compliance committee that is directly accountable to senior management as described in 42 C.F.R. § 438.608, and a designated fraud and abuse prevention coordinator (who may also be the compliance officer) that manages the fraud and abuse program and is the referral and education point for employees in conjunction with the compliance officer; – Training and education for the compliance officer and the ACO’s employees, as well as providing employees, subcontractors, and agents with information about fraud and abuse laws, false claims, and whistleblower protections including in compliance with 42 U.S.C. § 1396a(a)(68) where applicable; – Effective lines of communication between the compliance officer, fraud and abuse prevention coordinator, and the ACO employees; – Provisions for prompt responses to detected offenses and corrective action initiatives; – Enforcement standards and disciplinary guidelines for compliance violations that are well-publicized; – Provisions for internal monitoring and auditing including provider audits through sampling methods to determine whether represented services were actually delivered by provider and received by enrollees, utilization review, and a mechanism to suspend payments to providers where MassHealth has credible allegation of fraud pursuant to 42 C.F.R. § 455.23; – Communication of suspected violations of state and federal law to government agencies, including overpayments, circumstances affecting an enrollee’s MassHealth eligibility, and circumstances affecting a participating provider’s eligibility to participate in MassHealth; – A fraud and abuse program to prevent and detect program violations, investigate allegations of misconduct, protect reporting employees from retaliation, recover improper or fraudulent payments, implement corrective actions, and comply with MassHealth’s reporting and certification requirements; and – Initial and ongoing screening procedures for the ACO and providers to determine if any individuals or entities are excluded from participation in federal health care programs, and notification of any discovered exclusions to MassHealth

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Fraud and Abuse Reference Materials ACO Waiver Examples

Next Generation ACO

• https://www.cms.gov/Medicare/Fraud-and-

Abuse/PhysicianSelfReferral/Downloads/Next-Generation-ACO-Model-Waiver.pdf

• ACO Participation Waiver
• Shared Savings Distribution Waiver
• Stark Law Waiver
• Waiver for Patient Engagement Activities

– MSSP Waivers

• https://www.gpo.gov/fdsys/pkg/FR-2015-10-29/pdf/2015-27599.pdf
• ACO Pre-participation Waiver
• ACO Participation Waiver
• Shared Savings Distribution Waiver
• Stark Law Waiver
• Waiver for Patient Engagement Activities

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Fraud and Abuse Compliance: A key question for analysis

• What kind of Plan is at the top of the food chain?

– This will determine the applicability of AKS safe harbors, the Stark

exception, and applicable MA law

• There are many plans, and in applying the various potential

safe harbors, or exceptions, the greatest opportunity for flexibility occurs when the plan is a risk based plan such as a Medicare Advantage (MA) plan, a competitive medical plan (CMP), a prepaid health plan or another type of plan that operates under a risk based contract with CMS or a State health care program

The Analysis Begins: The Anti-Kickback Statute

• SSA Section 1128B – Criminal penalties

(42 USC 1320a-7b)

• -”Knowingly and willfully solicits are receives …any kickback …or

rebate…directly or indirectly…”

• - “…in return for referring…for the furnishing or arranging for the

furnishing any item or service for which payment may be made...”

• - “…in return for purchasing, leasing, ordering or arranging for or

recommending …any good, facility service or item…”

• - “…for which payment may be made in whole or in part under a

Federal health care program…”

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The AKS Managed Care Safe Harbors

• 42 CFR 1001.952 [“952”][All regulatory references are to 42

CFR 1001.952 unless otherwise noted] – A statement of what is NOT remuneration for purposes of Section 1128B (42 USC 1320 a-7(b))

• Discounts -- 952(h) and 42 USC 1320a-7(b)(b)(3)(A)
• Increased coverage, reduced cost sharing amounts or

reduced premium amounts offered by health plans – 952(l)

• Price reductions offered to health plans – 952(m)

AKS Managed Care Safe Harbors, cont.

• Price reductions offered to eligible managed care
• rganizations (“EMCOs”) – 952(t)
• Price reductions offered by contractors with

substantial financial risk (“SFR”) to managed care

• rganizations – 952(u)

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The most flexible safe harbor – The EMCO safe harbor – 952(t)

• The Eligible Managed Care Organization (EMCO)

is the most flexible (42 CFR 1001.952(t))

• Remuneration does NOT include any payments

between an EMCO and a first tier contractor for “items or services” if three standards are met

(1) A signed written agreement, for at least a year, specifies the covered items and services, and no other claims to a federal health care program from the first tier contractor

Conditions for EMCO first tier payments

(2) No swapping (3) No shifting of costs to claim increased payments from a Federal health care program

• Items or services are: Health care items, devices, supplies or services

OR those services reasonably related to the provision of such, including non-emergency transportation, patient education, social services (e.g. case management), UR, QA, but not marketing or pre-enrollment activities

• Thus, if part of the payment package includes any item or service listed,

it will not be construed as a payment to induce referrals from the plan (e.g. we will provide non-emergency transportation to plan enrollees, free obesity education, take home supplies), it will not run afoul of the AKS

• If the arrangement includes a marketing component, it would not be

within the safe harbor

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EMCOs

• EMCOs are—

– Any Medicare Part C health plan that receives a capitated

payment and which has its cost sharing approved by CMS

– Medicaid managed care organizations – PACE plans or Federally qualified HMOs

This means…

• Any payment arrangement between a provider and

an MA plan directly, provided it is in writing, for a least a year, etc. is not a violation of the AKS.

• This includes discounts, payments based on

network configuration, payments based on volume, payments that vary over time, payments that are based on quality, all of which are a part of the payments made for the provision of “items or services” will not constitute prohibited remuneration under the AKS

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And furthermore… .

• The payments from the EMCO do not have to be to a provider---”Any

first tier contractor for providing or arranging for items or services…”

• The payments can be to a TPA, a management company or any other

entity that is in the business of arranging for the provision of items or services—provided they are licensed to accept the payments

• Suggestion: To take best advantage of the EMCO exception— at a first

tier level, have the plan rep and warrant that it is a qualifying EMCO and the payments it makes fall within the EMCO safe harbor; at a downstream level, similar reps and warranties from the first tier contractor

• If other than MA plan business is involved (e.g. Medicaid) review the law
• f the applicable state as well, as the exception will not supersede State

law for non-Federal plan activities

At the second tier and downstream levels… .

• Remuneration does not include ANY PAYMENT

between a first tier contractor and a downstream contactor (e.g. from an IPA to a hospital or the reverse) or between two downstream contractors to provide OR arrange for items or services so long as:

– A signed written agreement, for at least a year, specifying

the covered items and services, and no claim on another program

– No swapping – No shift of financial burden

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Downstream continued…

• Condition 4: The EMCO—First Tier Agreement

does not involve

– A cost based FQHC, HMO or CMP on a cost basis, or

non-risk based Federally qualified HMO

• Downstream includes those with direct or indirectly

with a first tier contractor (an individual or entity). This will include anyone in the arrangement, including suppliers, ancillary providers, independent contractors with contracts with an entity that itself has a contract with the first tier contractor to provider or arrange for provision of items or services

Downstream flexibility as well

• ANY PAYMENT is again covered
• As long as it is for items or services that are

covered in the first tier arrangement

• Suggestion: Downstream contractors should verify

that the services are covered by the First Tier

• contract. A first tier contract that carves out

specialty services, high cost drugs, vision services will not protect hospital–physician arrangements downstream that involve the provision of those services (e.g. collateral arrangements)

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Price reductions offered to health plans -- 952(m)

• Remuneration does not include a reduction in price

a contract health care provider offers to a health plan in accordance with a written agreement for “the sole purpose of furnishing to enrollees items or services” which are covered by the Plan

• Term not less than a year, items and services

specified in advance,

• Methodology specified in advance

The Discount Safe Harbor

• Discounts -- 952(h)

– Remuneration does not include a discount that meets the

reporting obligations of the safe harbor

– A MA plan need not report the discount unless specifically

required by its contract

– Must be applicable to Medicare, Medicaid or other Federal

health care programs

– Cannot be in cash – Cannot be part of a “swapping” arrangement – Cannot consist of a waiver of a co-pay, coinsurance or

deductible

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Price reductions by contractors with SFR to MCOs – 952(u)

• More challenging than the EMCO safe harbor and,

in some cases redundant

• First tier application to – A qualified managed care

plan if 5 standards are met

– An agreement which is for at least a year, signed by the

parties, requiring QA program and specifies a methodology that is “commercially reasonable and consistent with [fmv]

SFR Contractor safe harbor cont.

• -If 1st tier contractor has an investment interest, cannot be a

kickback (circular criteria?)

• -First tier contractor must have substantial financial risk

(capitation, % of premium, DRG payments, bonus/withhold program [20/10 requirement on target payments], reasonable payments amounts resulting, etc., etc.

• -Reimbursable items or services must be submitted directly

to the Federal program in accordance with a valid assignment and payments must be “identical to payment arrangements…[related to] other beneficiaries” for same items or services AND

• -No swapping or shifting the financial burden

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A qualified managed care plan is…

• Operates in accordance with a contract, agreement or statutory demo

authority approved by CMS or a State health care program

• Charges a premium and its premium structure is regulated by the State
• Is an employer, or welfare fund; OR
• Is licensed in the State, contracts with an employer, union welfare fund
• r company furnishing coverage and is paid a fee for administration of

the plan which is at FMV

• AND – Runs UR/QA programs and “treatment for Federal

…beneficiaries ..is not different…

• AND – Has population that matches up to Medicare beneficiary limits

(10%/50%)

MA Kickback Statute

• “Any person who solicits or receives any remuneration, directly or

indirectly, overtly or covertly, in cash or in kind in return for purchasing, leasing, ordering or arranging for or recommending purchasing, leasing,

• r ordering of any good, facility, service, or item for which payment is or

may be made in whole or in part by a health care insurer, or any person who offers or pays any remuneration, including any bribe or rebate, except as provided in subsection (b), directly or indirectly, overtly or covertly, in cash or in kind to induce any person to purchase, lease,

• rder or arrange for or recommend purchasing, leasing or ordering of

any good, facility, service, or item for which payment is or may be made in whole or in part by a health care insurer, shall be punished by a fine of not more than ten thousand dollars, or by imprisonment in a jail or house

• f correction for not more than two and one–half years or in the state

prison for not more than five years, or by both such fine and imprisonment, and may be held liable in a civil action under section seven.” Mass. Gen. Laws Ann. ch. 175H, § 3(a).

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MA Medicaid Statute

• Whoever solicits or receives any remuneration, including any bribe or rebate, directly or

indirectly, overtly or covertly, in cash or in kind in return for purchasing, leasing, ordering or arranging for or recommending purchasing, leasing, or ordering any good, facility, service,

• r item for which payment may be made in whole or in part under this chapter, or whoever
• ffers or pays any remuneration, including any bribe or rebate, directly or indirectly, overtly
• r covertly, in cash or in kind to induce such person to purchase, lease, order, or arrange

for or recommend purchasing, leasing, ordering any good, facility, service, or item for which payment may be made in whole or in part under this chapter shall be punished by a fine of not more than ten thousand dollars, or by imprisonment in the state prison for not more than five years or in a jail or house of correction for not more than two and one–half years, or by both such fine and imprisonment.

• This section shall not apply to a discount or other reduction in price obtained by a provider
• f services or other entity under this chapter if the reduction in price is properly disclosed

and appropriately reflected in the costs claimed or charges made by the provider or entity under this chapter or to any amount paid by an employer to an employee, who has a bona fide employment relationship with such employer, for employment in the provision of covered items or services.

• Mass. Gen. Laws Ann. ch. 118E, § 41.