Member Input Needed: Federal Waivers for ACOs and Participating Providers

LeadingAge is seeking member comments on waivers under consideration for certain Accountable Care Organizations (ACOs) and post-acute care providers serving ACO patients. The waivers are referenced in proposed federal regulations governing Medicare Shared Savings Program ACOs (see the Dec. 9 issue of Intelligence for an overview of the proposed regulations). These proposed regulations, released by the Centers for Medicare & Medicaid Services (CMS) in December, include in the preamble a request for comments on four types of waivers that may directly impact long-term/post-acute care providers. The waivers relate to:

the Skilled Nursing Facility (SNF) three-day stay requirement;
the prohibition on hospital recommendations of post-acute care providers;
the homebound requirement for home health care; and
originating site requirements for telehealth payment.

The proposed ACO regulations are intended principally to encourage ACO participation in two-sided risk sharing (arrangements that require ACOs to share in both savings and losses in relation to benchmark spending), while extending the permissible duration of one-sided (shared savings only) arrangements. Under current regulations, ACOs may initially elect either one-sided risk sharing (Track 1) or two-sided (Track 2) risk sharing, but must transition to Track 2 after three years. Over 98 percent of ACOs currently participating in the Shared Savings Program have chosen Track 1. Only 5 ACOs have chosen Track 2 at the outset.

According to CMS, ACOs that bear both up-side and down-side risk have "the greatest potential to induce more meaningful systematic change in providers' and suppliers' behavior" and promote better outcomes at a lower overall cost.¹ However, CMS recognizes that some ACOs may not be willing to take on the level of risk that Track 2 requires, some may not be ready for significant performance-based risk after only three years, and some might be more willing to take on risk if the up-side were greater. Accordingly, the proposed regulations would:

allow ACOs to transition to two-sided risk after six years (i.e., after two 3-year agreement periods) if certain conditions are met;
reduce the level of risk inherent in Track 2 by modifying the thresholds that trigger shared savings or losses; and
create a new payment arrangement (Track 3) with higher rates of shared savings and losses.

In addition to these proposals, CMS is considering waivers of certain regulatory requirements in order to encourage ACOs to take on two-sided risk. A more detailed summary of these provisions is available here.

Skilled Nursing Facility (SNF) Three-Day Stay Rule

CMS is considering the possibility of waiving, for patients of qualifying ACOs, the requirement of a three-day hospital stay as a prerequisite for the Medicare SNF benefit. This requirement has been waived for other risk-bearing models, such as the Pioneer ACO and some Medicare Advantage plans. CMS maintains that the financial incentives associated with two-sided risk in the ACO model would promote appropriate treatment within the hospital and prevent over-utilization of SNF care. CMS also notes the potential to maximize savings by eliminating, where appropriate, the prior inpatient stay and admitting patients to a SNF directly. Currently, CMS is contemplating this waiver only for ACOs participating in the new Track 3 model, which provides stronger incentives to manage costs.

CMS is seeking comments in the following areas related to the three-day stay waiver for ACOs:

Should such a waiver apply to all Shared Savings Program risk tracks and not just the two-sided risk model?
Should the same criteria used for the Pioneer ACOs' waiver be applied to the Shared Savings Program ACOs (e.g., long-term residents of nursing homes would not be eligible for the waiver in relation to Medicare coverage of a post-acute nursing home stay)?
Should CMS require that the ACO patient be admitted to a SNF that is an ACO participant or an ACO provider/supplier, or could the patient be admitted to any SNF that meets specified criteria?
What specific activities should be monitored, and what quality standards should be applied, to ensure that items and services are properly delivered to eligible patients, that patients are not being discharged prematurely to SNFs, and that patients are able to exercise freedom of choice over their care setting?

Prohibition on Hospital Recommendations of Post-Acute Care Providers

CMS proposed allowing ACOs participating in two-sided risk models to obtain a waiver of the regulation prohibiting a hospital from recommending a particular post-acute care provider as part of the discharge planning process. This waiver would allow ACOs and their participating hospitals to make more specific recommendations concerning post-acute care based on the performance of available providers. According to CMS, it would also facilitate continuity of care and care coordination.

CMS specified that it is not considering a complete waiver of the prohibition on specifying or otherwise limiting the qualified providers that are available to a patient. Under the terms of any waiver, hospitals would be required to inform the patient or the patient's family of his/her freedom to choose among participating Medicare providers of post-hospital care and must, when possible, respect patient and family preferences when they are expressed. CMS notes that such a waiver would not cover a situation in which a post-acute provider has paid a fee to be included as a recommended post-acute provider.

CMS is seeking comment on the specific activities that should be monitored to ensure that items and services are properly delivered to patients and that patients' freedom of choice is protected. CMS is also seeking comments in the following areas under this waiver:

What quality criteria should be applied to recommended providers (e.g., a minimum Star Quality Rating)? Should recommendations be based only on data that are publicly reported?
Are there other cost and quality criteria that should be considered?
Should the ability to recommend a post-hospital provider be available only to those hospitals that are ACO participants or ACO provider/suppliers, since these entities would have incentives that are most directly aligned with those of the ACO?
Should a hospital be permitted to recommend any post-hospital provider or only post-hospital providers that are ACO participants or ACO provider/suppliers?
Would it be feasible to waive the prohibition on recommendations only for certain Medicare Fee-For-Service (FFS) beneficiaries (i.e., those assigned to an ACO), or should the waiver apply to all FFS beneficiaries receiving care at ACO-participating hospitals?

CMS anticipates that if a waiver is found to be necessary, it would establish a waiver that would apply to all hospitals that are ACO participants or ACO providers/suppliers and that these hospitals would have the ability to recommend any post-hospital provider; however, CMS is also interested in receiving comments on alternative approaches to a waiver.

Homebound Requirement for Home Health Care

CMS is considering a waiver of the homebound requirement for the Medicare home health benefit for qualifying ACO beneficiaries. The rationale for this waiver would be to avoid hospital admissions through the expanded use of home health visits by non-homebound beneficiaries who are otherwise eligible for home health services. Home health agencies designated by ACOs to provide services to non-homebound beneficiaries would have to have a Star Quality Rating of at least three stars. Currently, CMS is considering this waiver only for ACOs participating in Track 3, but would like comments on whether it should apply to any two-sided track. In addition, CMS is seeking input into the following questions:

Should the home health agency providing services to a non-homebound beneficiary be an ACO provider/supplier?
Are there specific categories of providers or beneficiaries to whom the waiver should or should not apply?
What quality metrics should be incorporated in the ACO quality measure framework to evaluate quality of care for non-homebound home health patients?
Are there circumstances in which home health services should be available without being triggered by some health event? How would these differ from non-covered custodial care?

Waivers for Telehealth Services

CMS is considering waivers of telehealth billing requirements for patients receiving treatment under an ACO model. Specifically, CMS is considering waivers of the originating site requirements that specify the types of sites at which a beneficiary must be located when receiving telehealth services. CMS also indicates that it would consider additional waivers to increase the flexibility of ACOs to provide a broader range of telehealth services. It seeks comments on the following issues:

How should telehealth be defined? Should it include remote monitoring, remote visits, and/or e-consults?
What capabilities or additional criteria should ACOs meet in in order to qualify for waivers?
What activities should be monitored to ensure that services are properly delivered?
Should the waivers apply only to ACOs in Track 3 or to ACOs in any two-sided risk track?

Please provide feedback to Heather Boyd at LeadingAge (hboyd@leadingage.org) by Fri., Jan. 23 or Karen Lipson at LeadingAge New York by Tues., Jan. 27. Comments are due to CMS by close of business on Fri., Feb. 6, 2015.

Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8383 ext. 124.

¹ 79 Fed. Reg. 72803 (Dec. 8, 2014).