The following is ACO commentary from Richard G. Cowart that appeared in the June issue of ACO Insights, to read more, visit

The Medicare ACO program continues its metamorphosis. Healthcare industry groups have been highly critical of the initial draft regulations. Several prominent United States Senators have called for a complete recall of the first attempt to define ACOs and the Medicare Shared Savings program. One area of the proposed regulations that appears likely to survive any major assault is the Program Integrity requirements. CMS proposed several program integrity criteria to prevent fraud and abuse of the Shared Savings Program, and they included the following: 

1.         Compliance Plan. An ACO will be required to have a compliance plan that includes at least the following common elements:

  • A designated compliance official/individual who is not legal counsel and who has the ability to report 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, and ACO providers/suppliers to report suspected problems related to the ACO.


  • Compliance training for the ACO, the ACO participants, and the ACO


  • A requirement to report suspected violations of law to an appropriate law

                              enforcement agency.

            The ACO may consider coordinating its compliance efforts with existing compliance activities of its members and the efforts of its ACO providers/suppliers.

2.         Compliance with Program Requirements. The ACO will be ultimately responsible for compliance with all terms and conditions of its agreement with CMS. All contracts or arrangements between/among the ACO, its ACO participants and ACO providers/suppliers, and other entities furnishing services related to ACO activities require compliance with the obligations under the 3-year agreement, including the document retention and access requirements. An ACO authorized representative must certify the accuracy, completeness, and truthfulness of information contained in its Shared Savings Program application, 3-year agreement, and submissions of quality data. As a condition of receiving a shared savings payment, an ACO authorized representative must make a written request for payment that certifies the ACO’s compliance with program requirements, as well, as the accuracy, completeness, and truthfulness of any information submitted by the ACO, its participants, or providers/suppliers, including any quality data or other information or data relied upon by CMS in determining the ACO’s eligibility for, and the amount of, a shared savings payment or the amount owed by the ACO to CMS.

3.         Conflicts of Interest. An ACO governing body will be required to have a conflicts of interest policy that mandates disclosure of relevant financial interests. The policy must provide a procedure to determine whether a conflict exists and must set forth a process to address any conflicts and remedial actions for governing body members who fail to comply with the policy.


4.         Screening of ACO Applicants.  ACOs will not be subject to standard Medicare screens because the ACO entity itself is not enrolling in Medicare. Therefore, CMS is considering screening ACOs during the application process. ACOs whose screenings reveal a history of program integrity issues (and/or affiliations with entities with integrity issues) may be rejected or additional safeguards may be imposed. ACOs should select management and participants with such screening in mind.

5          Prohibition on Certain Required Referrals and Cost-Shifting. The most controversial aspect of the Program Integrity section is when to assign beneficiaries to an ACO. CMS also indicated that it is considering assigning beneficiaries to an ACO on a prospective basis at the conclusion of the performance period. CMS is concerned that ACOs or ACO participants may offer inducements to over-utilize services or to otherwise increase costs for Medicare or other Federal healthcare programs with respect to the care of individuals who are not assigned to the ACO under the Shared Savings Program. CMS believes the risk of such abuse might be heightened if the final rule provides for prospective assignment of beneficiaries. To address the risk of inappropriate cost-shifting, CMS is considering prohibiting ACOs and their ACO participants from conditioning participation in the ACO on referrals of Federal health care program business that the ACO or its ACO participants know or should know is being provided to beneficiaries who are not assigned to the ACO.

In this day and age, every healthcare business can expect to have stringent program integrity requirements and robust compliance activities. As the Medicare Shared Savings program continues to morph, ACO interested parties should expect continued emphasis on integrity and compliance subjects.

Richard G. Cowart, Chair Health Law and Public Policy Department; Baker, Donelson, Bearman, Caldwell & Berkowitz;

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