News & Insight

It’s Time for ACOs to Properly Follow MSSP Compliance Regulations

By Carol Hogan and Kathleen Salzer.  Edited by Mary Grace Babbo.

Time for a Reexamination: Why ACO Compliance is Important 

When an Accountable Care Organization (ACO) files for renewal after their initial three-year participation agreement, CMS reviews all of the ACO’s materials to ensure that the ACO group follows all regulations under the 2010 Affordable Care Act, including specifically the 2016 revisions to the Medicare Shared Savings Program. These recent revisions underscore the importance of members of ACOs taking on performance-based risk to strengthen the value of ACOs as an alternative to fee-for-service (FFS) health systems, with the ultimate goal of radically improving the cost and quality of health care. 

ACOs must also have a comprehensive compliance plan in place. This includes a “designated compliance official/individual who is not legal counsel;” a mechanism to address compliance issues; compliance training for the ACO, ACO participants, and provider and suppliers; and methods for ACO employees or contractors to anonymously report problems to the compliance officer. CMS conducted audits of ACOs to determine whether these programs were meeting the new 2016 quality measures. 

Every ACO must commit to a three-year participation agreement, which is subject to regulatory changes in all areas except for governance structure and management, calculation of sharing rate, and beneficiary assignment. ACOs with a 2015 start date would need to have renewed their agreement by January 1, 2018. However, an ACO is subject to a change in the quality performance standard: this can result in possible audits, penalties, and termination.

Given changes in MSSP regulations and their complex, legal nature, it’s important that ACO groups review their internal processes and documents to ensure they comply with the regulations. ACOs that fail to comply with these regulations face penalties or, in more extreme cases, termination. CMS required that all ACO participant agreements submitted for performance years 2017 and following “comply with the new rules.” Despite this requirement, many ACOs still do not fully understand how to properly implement the rules they agreed to. 

Crucial Areas of ACO Compliance

  • Governance Structure and Management:  It is essential that an ACO be provider driven, not entrepreneur driven, and that it gives Medicare beneficiaries agency in ACO decisions. This goal of placing the patient first, dictated by an ACO’s “patient-centeredness criteria.” guides the CMS’s regulations concerning the management and board of an ACO, which include:
    • The board of directors must be comprised of 75% ACO participants, including a Medicare beneficiary served by the ACO;
    • Restrictions against conflicts of interest on the governing board; 
    • Operational and clinical management officers in accordance with the regulations.
  • Limits on Reserved Powers: An ACO’s member can’t appoint and remove the ACO board and management. They also can’t determine how shared savings are used and distributed. 
  • Waivers: Identification and processes for achieving waiver protection must comply with the pre-participation and/or participation waivers, the beneficiary inducement waiver, and the shared savings distribution waiver. 
  • Marketing: While the Affordable Care Act itself says nothing in regards to the marketing of ACOs, CMS requires approval for the marketing activity of ACOs before such materials can be used. CMS provides template language for marketing campaigns: ACOs must refer to participants as “beneficiaries.” Additionally, CMS does not specifically endorse any ACOs, and does not allow ACOs to use marketing language that reflects a false endorsement. 

Common Errors in ACO Compliance

  • Data Entry and Data Analysis Around Quality Metrics: In CMS’ audits of ACOs to determine whether these programs were meeting the new 2016 quality measures, CMS found that many of the problems stemmed from the same area: quality metrics. Issues such as failure to correctly file patient screenings for diseases like cancer and depression, failure to report required quality measure elements in screenings, and exclusion of elements from the denominator that calculates the shared savings of an individual ACO were among the most common. 
  • Beware of Box-Ticking: “Box-ticking” refers to an ACO merely going through the motions with a compliance team to indicate the minimum level of required compliance. Often, hospitals have only a shallow understanding of the regulations they agree to with this method, and this can lead to problems later, as the compliance does not deliver any true benefit to the ACO. 
  • Prohibitions on Beneficiary Referrals: Naturally, an ACO would prefer that its beneficiaries, or patients benefiting from an ACO’s “patient-centered” care that is “coordinated among providers”, receive care within their network. This gives the ACO greater control over a patient’s cost and quality of care. CMS anticipates this preference, yet still mandates that exclusively recommending patients to members of an ACO violates a patient’s freedom to seek “high quality care from the providers or suppliers of their choice.” For an ACO to achieve its goals within the MSSP regulations, it must encourage in-network referrals to its patients without violating the CMS freedom of choice requirement. This allowable gray area, while vital to the success of an ACO, is murky, and would benefit from examination by a lawyer with expertise in ACO compliance. 
  • In-house Compliance Department: A hospital’s compliance department, already in place from HIPAA or the Stark Law and Anti-Kickback statue, is not always capable of handling the specific intricacies of MSSP regulations. It’s necessary for a compliance department to be well-educated in the common problems that can arise with ACOs. Hospitals should consider outsourcing their ACO-specific compliance to a firm with expertise in these regulations.

How We Can Help 

As a firm with long-standing expertise in health care policy, HMBR is committed to helping hospitals overcome confusing legal barriers so they can focus on providing high-quality, low-cost patient care. A careful, detail-oriented review of ACO documentation and personnel to ensure that everything complies with current MSSP regulations is essential to ensure the renewal of your ACO. 


  Aug 7, 2018  |  By    |   On Health Care