On October 29, 2015, the Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG), Health & Human Services issued a final rule (Final Rule) regarding waivers (ACO Waivers) of the physician self-referral law (Stark law), the federal Anti-Kickback Statute, and the Civil Monetary Penalties Law (CMP) provision relating to beneficiary inducements for Medicare accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP). The ACO Waivers waive the application of these fraud and abuse laws to certain ACO activities that are reasonably related to the purposes of the MSSP. The Final Rule’s ACO Waivers are effective as of October 29, 2015.

The five ACO Waivers are:

  1. ACO Pre-Participation Waiver – covers certain start-up arrangements that predate an ACO’s MSSP participation agreement.
  2. ACO Participation Waiver – covers arrangements of an ACO, one or more of its participants, or its ACO providers or suppliers during the term of its MSSP participation (and for a specified period thereafter).
  3. Shared Savings Distribution Waiver – covers distributions or use of shared savings earned by an ACO under the MSSP.
  4. Compliance with the Physician Self-Referral Law Waiver – covers financial relationships among an ACO, its ACO participants, and its ACO providers or suppliers that implicate the Stark law and satisfy the requirements of an existing Stark law exception.
  5. Waiver for Patient Incentives – covers items or services provided by an ACO, its ACO participants, or its ACO providers or suppliers to Medicare beneficiaries for free or below fair market value.

To take advantage of an ACO Waiver, an arrangement must comply with certain conditions, which are largely unchanged from the Interim Rule and are further described here. The Final Rule, however, makes several changes from the Interim Rule. The ACO Waivers no longer apply to the so-called “Gainsharing CMP” because the Agencies determined that such a waiver is no longer necessary due to recent revisions to the Gainsharing CMP which no longer prohibits making payments to physicians to reduce medically unnecessary services. The Final Rule also clarifies that, with respect to the ACO Pre-Participation Waiver and the ACO Participation Waiver, documentation of the ACO governing body’s authorization must (rather than “should” as in the Interim Rule) include the basis for the governing body’s determination that the arrangement is reasonably related to the MSSP’s purposes.