Bloomberg Health Law Q&A

March 5, 2012Articles Bloomberg Law Reports

The shared savings program regulations have certainly occupied more of our time than any other guidance under the ACA, but their impact on our health law practice is still evolving. We believe that the fee-for-service reimbursement system is unsustainable in its current state and that some form of alternative method or methods that reward quality of care and cost-effectiveness over quantity will inevitably rise to prominence in the coming decade. ACOs as envisioned under the CMS Shared Savings model represent a tentative first step toward that goal.

In order to participate in any Shared Savings Program, providers will need to rethink their historical operations, incentives, governance and organizational structure. Adapting to these changes will involve the Stark physician referral law, the Anti-Kickback Statute, HIPAA, the Civil Money Penalties Act, the antitrust laws, and in many cases, tax exemption considerations. Preparing for this revolution in the health care system will require lawyers to unlearn and relearn many previously settled areas of their daily practice and to understand new dynamics at play. Whether or not CMS’s efforts succeed, payors are likely to adopt some of the initiatives and concepts included in the Shared Savings Program, particularly the quality measures, the focus on outcomes and the changes in incentives. The advent of ACO-style reimbursement may prove to be as game changing to healthcare reimbursement as was the introduction of DRGs in 1982.