Kevin Siebs, Moore & Van Allen, and Derek Skoog, Principal, PricewaterhouseCoopers, discuss the Center for Medicare and Medicaid Innovation’s (CMMI’s) latest ACO model, ACO Realizing Equity Access and Community Health (REACH) Model. They cover reasons for provider participation in ACO REACH and common characteristics among participants, the model’s payment mechanisms, aspects of the model’s benchmark methodology, and key compliance issues related to the model. From AHLA’s Regulation, Accreditation, and Payment Practice Group.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
Kevin Siebs, Moore & Van Allen, and Derek Skoog, Principal, PricewaterhouseCoopers, discuss the Center for Medicare and Medicaid Innovation’s (CMMI’s) latest ACO model, ACO Realizing Equity Access and Community Health (REACH) Model. They cover reasons for provider participation in ACO REACH and common characteristics among participants, the model’s payment mechanisms, aspects of the model’s benchmark methodology, and key compliance issues related to the model. From AHLA’s Regulation, Accreditation, and Payment Practice Group.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
This episode of A H L A speaking of health law is brought to you by A H L A members and donors like you. For more information, visit american health law.org.
Speaker 2:Hello, my name is Kevin Seas. I am an attorney that practices in the healthcare group at the firm, Warren Van Allen, based in Charlotte, North Carolina. Um, my practice focuses on healthcare related transactions and advising clients on applicable state and federal healthcare law and regulations. And, uh, I'm really excited to be joined by my colleague Derek Chuge, uh, who is a principal at Pricewaterhouse Coopers today to, to talk about, uh, the latest a c o model from the Centers for Medicare and Medicaid innovation, a c o realizing equity access and community health model, more commonly known as the a c o Reach model. Um, so Derek, you wanna say a few words about yourself?
Speaker 3:Sure. Uh, yep. So, Derek's, who here? So I, I lead our health actuarial practice and really spend a lot of time, uh, helping, uh, entities, whether they're payers or providers or broadly health services companies, think about, uh, value-based care and risk-based contracting in particular, and, and how they really ought to position themselves for, for success and, and, uh, really set themselves up for a, a long-term, uh, route to, to delivering value for, uh, themselves and their payer partners, but, but particularly for the, the patients that they serve. So, really looking forward to the conversation.
Speaker 2:Great. Um, you know, and before we get started, I'll just do the, uh, the honors of providing the obligatory disclaimer that all of the views, statements, and opinions expressed by Derek and myself are our own and do not necessarily reflect the views or opinions of our respective organizations. Um, but, you know, I think before we we're gonna explore the, the model's payment mechanisms, aspects of the model's benchmarking methodology, and some key compliance issues related to the model. But before we dive into that, I think it's probably, uh, probably helpful to do some level setting background information on ACO reach. So, ACO reach is a, uh, it's a redesign population based model that replaced the global professional direct contracting model on January 1st, 2023. And it's a section 1115 A model. And as many of the listeners probably know, section 1115 A was added to the Social Security Act by the Affordable Care Act, which established C M M I for the purpose of testing innovative payment and service delivery models, uh, to reduce program expenditures while preserving and enhancing quality of care furnished, uh, to individuals under those programs. And so, ACO reach is, uh, one of these, these models, and because it's a redesigned model, there are two ways an ACO could have ended up in reach. Um, the first is an aco, uh, could have been participating in the G P D C model, uh, and then transitioned into a c o reach when it went live this year on January 1st, um, or, uh, an ACO o could have applied as a new aco, um, into the REACH model last year. And so, to give you a flavor of the breakdown, uh, there's, based on CM S'S announcement in January, there are 132 ACOs participating in the model 48 of which are new participants, and 84 of which are carryovers from G P D C. Uh, and I think it's also important to note that the, the model application deadline was April 22nd of last year, and c m s has stated that it's, it doesn't anticipate that it'll be accepting applications for new ACOs into the model. So therefore, as of right now, no new ACOs can join the model. However, it's, there are 132 ACOs currently participating, as I stated, with over a million, uh, 2 million beneficiaries to these ACOs. So it, you may have clients that are, providers that are considering joining a reach aco or potentially lenders, um, that are considering lender too, or investors that are considering investing in, um, an ACO that's in this model. So having some familiarity with the model and how it works, I think is, is valuable for, uh, for a healthcare practitioner's prac, uh, lawyers practitioner's practice. Um, so Derek, you know, I'm, now that we've gone through that background, why would, why do you, why would you, why do you think providers participate in ACO reach, and what are some common char characteristics that you see among participants?
Speaker 3:Yeah, it's a, a good couple of questions there. I, I think one, uh, maybe as an entry point, um, it, it does require an appetite for risk. So, um, the, the providers that we see jumping into ACO reach, but just, uh, CMSs a c uh, models within Medicare more broadly, uh, ha have, uh, uh, a desire to take on some amount of financial risk. And that's often, uh, driven in part by the, the motivation that, or the thought that, uh, they're creating value in excess of the fee for service billings that they're creating. Uh, and, and for a primary care physician or primary care practice, um, it, it's pretty, uh, easy to imagine how that might be the case, right? So, to the extent that they're spending time being really thoughtful about care referrals or care coordination, uh, and, and just sort of connecting the dots with within a very, uh, disconnected healthcare system, uh, those might not be, uh, particularly, uh, billable encounters necessarily, but, but will certainly add value to the member and often result in either better quality outcomes or, uh, better cost outcomes. And so, uh, certainly the providers that are entering into the REACH model have an appetite for, for taking on risk and, and basically put putting, uh, some skin in the game, so to speak. Uh, but, but why, uh, ACO reach in particular as opposed to, say, M S P or, or other potential risk models. Um, and, and really the, the main couple of drivers there are one, a desire to have a little bit more model flexibility. So, uh, M S S P or the Medicare Shared Savings Program, it's a little bit more rigid in, in its program design. Um, and so, uh, ACOs have a little bit less, uh, in terms of the levers they can pull. Uh, and then the other, uh, interest area that we see that that's a little bit more unique, each ACO reach participants or reach ACOs is an interest in health equity and, and really designing, uh, care plans and care models around, uh, serving historically underserved populations or high need populations that, uh, is a little bit more in focus than in, uh, in the other a c o models. And then may, maybe the, the last bit is perhaps more, more financial and, and slightly more cynical, uh, view. And, and that, um, ultimately, uh, that they view that there's a risk reward tradeoff, as I mentioned, but the cash flows and revenue recognition of the A C O reach model or, or, or certainly, uh, a little bit more, uh, advantageous than, than that of the MSS P model where, uh, there's, uh, more significant monthly cash flows that are coming through and there's a higher likelihood of being able to recognize much larger revenue stream than you might otherwise. Uh, and so tho those tend to be, uh, some of the drivers than, than when you said, what are some of the common characteristics of ACO reach entities? I'd say one, they, they tend to be m mso like entities or management service organizations that are often aggregating providers onto their, their risk platform. Um, you know, they, they're maybe second to that. They're often independent physician groups. You don't tend to see a whole lot of integrated delivery systems in the ACO reach model. Uh, but, but there's certainly interest there to, to participate perhaps with one of those mso like, uh, entities as well. So, uh, there's, even though the application window and is closed, there's is still, uh, certainly the, the chance to participate, uh, alongside an existing reach entity and, and join their participating roster. And then the last thing that kind of makes ACO virginities, uh, uh, a little bit different from other providers is it is a little bit disproportionately urban still, um, still trying to, to crack the, the V B C and risk contract, uh, rural, uh, issue that, uh, m MSS P had, um, maybe a a half step, uh, in, in the right direction here. But, um, still disproportionately urban, uh, and, and still some head room for growth I, I, I'll say in the, in the rural settings.
Speaker 2:Yeah, no, that, that's great. And I think, you know, the, you touched on the point of the flow of funds, um, and, you know, and when I've reviewed this model, I've, I've always found that the, the flow of funds is, is fairly, or the flow of funds is fairly complex, or just the payment mechanisms are fairly complex. And, you know, I, I think when I conceptualize it, I try to simplify the flow of funds into four for transactions. And, you know, that's not, um, it, it is a generalization and you probably miss some nuance there, but I think it's helpful to, to put it in that framework, to understand it, um, to understand what's going on with the, the flow of funds. And, you know, in my mind, the, the first transaction is, um, the ACO participant and preferred providers submit claims to C M s, uh, for services that they render, uh, and then to their patients. And then c m s reimburses the providers for those, uh, for those claims. But subject to the fee reduction that the, uh, participant, provider or preferred provider agrees to with the A C o, um, so second, the second transaction would be CMS pays a monthly, uh, risk adjusted capitation payment for managing the care of the beneficiaries aligned to it. Um, the third transaction after that, the ACO pays the, um, its providers based on the negotiated, uh, consideration for whatever, uh, the, the provider agreed to take as fee reduction, which we talked about in the first transaction. And then the fourth I is the distribution of shared savings or losses between the C M S and ACO based on the, the, the final record affiliation from, um, actual expenditures to benchmark. And I'll note that, you know, Derek mentioned that there's risk, uh, appetite. It's organizations that are, um, interested and have an appetite for risk in ACO reach. There are two rich sharing, um, lo uh, options, and that is the professional, which is 50%, and then the global, which is 100%. Uh, but, um, you know, I think, I think it's probably worth exploring a little more of that second transaction that I talked about, which is the, the risk adjusted capitation payment. Um, so this is really, it's, it's a A P P M payment, and there are two payment mechanisms under ACO reach. There's total care capitation and primary care capitation, uh, each of which are based on the, the beneficiaries aligned at the ACO and the, the calculated benchmark for the aco. And so under tc, the total care capitation, T c, basically an ACO receives a monthly capitated payment to estimate all covered services furnished to align beneficiaries subject to fee reduction. Um, and then for P C c, professional or primary care capitation, ACOs received capitated payments that estimate the total cost of primary care services furnished by ACOs, ACOs, providers, subject to fee reduction. Um, I'll also note that an ACO can receive a p o payments, and I, I think, um, if they choose the P C C payment mechanism, I think of these as essentially capitated payments for the non-primary care services, uh, for, um, subject to fee reduction. So they're kind of like gap fillers, um, between PCC and tcc. Um, so, you know, Derek, I think it's probably worth talking a little bit more about how the benchmark is calculated. Um, it's a highly technical process, I think without visuals and more time, it's probably not feasible to get to all the technical details, but, you know, generally I think of the benchmark as it, the a base, it starts with a baseline of historical expenditures or the ACOs aligned beneficiaries, and then it's adjusted to account for regional trends, current healthcare costs, risk, health equity, and among other things. Um, but I, there are some features I think that are worth exploring in more detail. I'm thinking particularly about risk adjustment, retroactive change adjustment, um, and new health, the new health equity benchmark. So Derek, you wanna talk a little bit more about those?
Speaker 3:Yeah, yeah. They're, they're really all three interesting, uh, dimensions to this that, that reach a c o program has, has taken, uh, sort, sort of a new flavor, uh, to how, uh, they want to incentivize plans. So, so maybe first starting on the risk adjustment side, um, backing up from ACO reach for a second. Uh, the Medicare Shared Savings Program, uh, has existed for quite some time and has had just bluntly a, a fairly arbitrary cap on the growth in, in risk scores or normalized risk scores, rather, for any particular ACO between the third bench benchmark year in any performance year where, uh, your risks score on a normalized basis can't grow by more than 3%. Uh, that's fairly arbitrary as I mentioned, because let's say, uh, you are seeing a, a materially different and, and let's say, uh, sicker patient population and your risk score, uh, will have gone out 10%. Um, then, uh, sort of you're outta luck and, and you're kind of stuck with that, that 3% growth. Uh, the a C O reach program is, is a little bit different, um, and has, uh, a couple layers of, of normalization for, for risk score, uh, that I, I think try and get to some of the criticism of risk adjustment, which has been that there's, uh, a bit of a coding arms race, uh, and, and you continue to see investments in, uh, clinical condition documentation as opposed to clinical outcomes. Uh, and so there's a couple of coding elements that are added, uh, to the risk investment model within reach, which are, uh, not just normalization, but also a coding intensity factor where, uh, you're being judged against, uh, the broader a c o reach population and, and normalized, uh, again, uh, and then there's a contemplation for, um, uh, your actual demographic change over time. So there's just a, a lot more nuance, uh, to the new risk adjustment calculation. Um, still, uh, with, with, with caps in place, not, not sort of, where I think many actuaries would, would argue that, uh, actuarial soundness might imply where a risk adjustment program ought to land, but it perhaps a half step in the right direction relative to what we saw with, uh, MSS P. Um, a couple of the other, uh, points that you mentioned. One is on the retrospective trend adjustment. This one actually caught many participating reach ACOs, uh, by surprise in their first participation year. And, and that's really because, uh, ACOs were more or less under the impression that when they entered into the program, their benchmarks were more or less known in advance. Uh, as it turned out, uh, there was a, a clause that allowed c m s to the extent that benchmarks were over or under projected by more than 1%. Uh, they, CMS had the right to go back and apply retrospective trend adjustment on a national basis to adjust benchmarks up or down. In this case. Uh, what we ended up seeing was substantial decreases in benchmarks at the ACO level. Uh, so, uh, what would've or would've otherwise been a feature for the ACO reach program, which was stable benchmarks relative to, uh, mss S p or MSS p, there's a whole lot of uncertainty around exactly what your benchmark is, because it's a function of, uh, regional and national cost trend. Uh, ms uh, rather ACO reach was supposed to have sort of solve for that with this, this retrospective, excuse me, with, with this, uh, rate book that's utilized. Um, and, and the last, uh, uh, it ended up being, uh, just as tricky, frankly, to estimate your, your benchmark for reach. And that certainly frustrated, uh, participants. Um, and, and that is unlikely to go away anytime soon, given just the, the challenges of, of estimating claims trend these days. And then that, that last point that you mentioned, I think is really interesting is maybe the, the first example of C m I really putting their money where their mouth is when it comes to the goal of health equity. And that's explicitly paying, uh, uh, an incentive, uh, to providers who are serving, uh, really the most underserved or most historically underserved, uh, beneficiaries as measured by area deprivation index. Um, and so, uh, to the extent that you're seeing kind of the, the, the least served decile of beneficiaries, so you get a, a roughly$13, uh, kicker, uh, to your benchmark, which is, which is not nothing, it's, it's not, uh, game changing perhaps, but, but it's definitely a decent incentive to, to make sure you've got programs to enroll, uh, uh, historically dis, uh, underserved populations. And, and that's, uh, it is really exciting just getting creative, frankly, with how we create incentives for, for providers and risk bearing entities to, to, uh, solve some of the historical, uh, challenges that we we've had with health equity across the industry.
Speaker 2:Yeah. And it, and I mean, it, it goes in, in hand with C M M Cmmis, uh, sort of Plans and goals that it stayed at the end of 2021, where it, it ha it said, you know, that health equity is a big focus for them going forward. So Yeah, I, I agree. It's, it is, as you said, putting their money where their mouth is. Um, but you know, I, I think it, it's interesting because, so you, you're, you're right in that we're looking at the, okay, so these beneficiaries, you, how are they aligned though to the aco? And I think it's an important question for people to understand those mechanics. And, you know, beneficiaries are aligned to an ACO through the ACOs participant providers, um, e essentially, your, your participant providers are listed on the ACOs participant provider list, whereas preferred providers are listed on the ACOs preferred provider list. I'll note that there's some, um, differences that result from being a participant provider versus a preferred provider. Uh, for example, as we'll talk a little bit about later, 75% of the ACOs governing body must be controlled by participant providers. And also, you know, participant providers must take fee reduction, whereas preferred providers can choose to take pre fee reduction. So the, because of those factors where a participant we're a provider lands, whereas it's whether it's participant or preferred, um, it will, will differ. Um, the, the one thing I'll note is that, uh, because beneficiaries are aligned, uh, voluntarily, or the one thing I'll note is beneficiaries can be aligned either voluntarily, uh, or through claims based alignment. And, um, the claims based alignment, essentially we're, we're looking at the plurality of primary care services furnished to the beneficiary and the relevant lookback period. And so they would be aligned to the participant provider that, uh, delivered the plurality of service, uh, primary care services. Um, but also in a c o reach, you have voluntarily, uh, voluntary alignment where the beneficiary essentially voluntarily chooses the participant provider. And it's important to note voluntary alignment always, uh, takes precedent over claims-based alignment. And so, because beneficiaries can voluntarily align in ACO reach. Derek, I, I'm curious to get your thoughts. Um, you know, what are some advantages? I, I know there's been some advantages to voluntary alignment from a benchmarking perspective that has been talked about. Can you talk a little bit about that?
Speaker 3:Yep, yep. So, so voluntary alignment, just without getting too technical here, ha has a couple of attractive qualities to it. But, but one is that, um, the, uh, sort of basis for the benchmark for those beneficiaries is based off of the, the county rate book published by C M s. And so, uh, for providers, many of whom are participating in the a c reach program that are more efficient than average, uh, utilizing that county rate benchmark, uh, for, uh, those patients is, is a great starting point, uh, because they know that they're, uh, more efficient than average and more the county rate benchmark more or less reflects average. And so, uh, they have a, a stronger probability, I'll say, of, of being able to deliver savings, uh, relative to, to those benchmarks for those patients. So, so that, that's definitely an advantage. And then the other aspect to it is that, um, uh, the risk investment model where there are, uh, caps in place for, uh, other beneficiaries that's lacked for, for voluntarily, uh, aligned beneficiaries and, uh, you know, rightly so, or at least reasonably rightly so, where, um, the, the references, uh, to historical risk scores for your claims based beneficiaries, um, it might make sense, uh, that those, uh, have caps in place because you actually have the historical data for those patients, but in this case, um, they are more or less not new for you. And so, uh, that might take time to get a complete and accurate, um, set of diagnoses for, for those patients. And so you, you, uh, have more flexibility in terms of, uh, how those, uh, caps get applied, uh, which is favorable as well. Um, so, so the combination of those two things makes voluntary alignment attractive from a benchmark perspective. But then the other element of it is, is, um, you often will more or less kind of know, uh, who the patient is. You've established a relationship good enough to, to drive that voluntary alignment. And I know you'll talk a bit more about that, but, um, that often has some, some good, uh, dynamics from a clinical outcomes perspective and an integration of care perspective where, uh, a claims-based, uh, beneficiary, uh, under prospective alignment here, uh, you may have had a relationship past tense, uh, but that may have weakened over time, whereas this is gonna be, uh, uh, much more, uh, kinda real time. Uh, and that creates some benefits as well on the, on the cost side.
Speaker 2:Yeah. And so it's kind of an interesting thing because in, in ACO reach you, you are, you can market provided you follow restrictions, um, it engendered in the program, which we'll get to in a little bit. But, uh, you know, I, I'm curious, Derek, what, what have you seen in terms of how ACOs and their providers are, are driving voluntary alignment?
Speaker 3:Yep. Um, it, it, it, it's, uh, it's a kind of a brave new world. Uh, you know, historically, uh, voluntary alignment, you know, it did exist under s p, but we rarely saw voluntary alignment get to more than maybe 1% of a total patient base. And it's just because it was very hard to voluntarily align a beneficiary. They had to go online, uh, and, and, uh, click through a a, a number of pages and, and align themselves to an aco. And as you can imagine what the Medicare eligible population that creates all sorts of challenges. Uh, in this case, what we've seen is a, is a strong focus on, uh, adjusting in office workflows to drive that paper-based voluntary alignment. Uh, and, and really just make sure that you're, you're driving that in the office. Uh, but then just from a, an attractiveness of, of that alignment perspective, um, we've seen, uh, ACOs really focus on, uh, sort of the marketability of their, uh, reach ACOs and, and particularly, uh, from a, a benefit enhancement perspective and a, and a beneficiary, uh, incentive perspective. And so the combination of altering the office workflows and, and making, uh, the a c reach sound and, uh, clearly attractive to to patients, uh, has definitely been where we've seen, uh, a c o reach entities really push over the last couple of years here.
Speaker 2:Yeah, it, it is a sort of a brave new world. Um, and<laugh> with that always comes, uh, restrictions, uh, in terms of what you can do for marketing. Cuz there, you know, you can imagine there's opportunities for abuse there from a, a targeting perspective if, if you will. Um, so there are restrictions that are set forth in, uh, the participation agreements regarding marketing. And, you know, I'll note, as a general rule of thumb, the restrictions that apply to an ACO regarding marketing are also generally gonna reply to the participant and preferred providers of that aco. And the ACO really bears the responsibility of making sure its participant preferred providers comply with the restrictions. Um, you know, I think, and I'll, I'll highlight a a few of the restrictions that I, you know, I think, uh, providers need to be aware of or, you know, uh, people attend, people considering transactions with ACO involving reach ACOs should be aware of. Um, you know, one is that there is a requirement that the ACO must submit all their marketing materials for CMF approval, um, prior to any of the participant providers, preferred providers or the ACO using those materials. Um, and there is the, the materials are deemed, uh, approved after a certain amount of time, um, once they're submitted with for review with proper certification. However, c m s can disapprove of those materials, um, during any time during the performance here. And so is, it's important to know, you know, what you can and can include in those marketing materials, um, so that you don't fall, um, you don't get caught in that, uh, that pitfall. Um, so one of those is, is, as I alluded to earlier, is you, you can't, you can't do certain targeting, um, with your marketing activities or marketing materials. Uh, so an ACO cannot discriminate or selectively target beneficiaries based on certain demographics, um, disability, medical history, evidence of insurance history, geography, uh, among other things. And so, um, you wanna make sure that your materials, you have a process in place to make sure your materials are not engaging in such discrimination. And a additionally, there is a, a prohibition on targeting beneficiaries enrolled in other Medicare managed care plans, um, such as Medicare Advantage for the purposes of recruiting them to re, uh, reach a c o and inversely other Medicare managed care programs. It, they can't, they can't, uh, market to reach beneficiaries for purposes of recruiting them to Medicare managed care plans. Uh, so that's, that's tar Those are some targeting issues you need to be aware of, uh, content wise. Um, you know, marketing materials and marketing activities can't mislead beneficiaries about the the model. Um, they can't claim that the ACO or participant provider is recommended by C M S. And the one I'll stress here is they, they cannot expressly state or imply to a beneficiary that selecting the participant provider restricts or any way removes that beneficiary's right to select providers of their choosing that are other Medicare providers. There, there's a big emphasis that, uh, beneficiaries are still free to choose their providers. Uh, Medicare beneficiaries are free to choose their, their providers that accept Medicare. And so it is imperative that, um, ACOs and their providers do not imply otherwise. Uh, Derek also mentioned in-kind remune or beneficiary engagement incentives that, uh, potentially make the a c o the reach a c o more attractive than fee for service. Uh, so in a c o reach, there's some kind of unique beneficiary engagement incentives that reach ACOs can provide to beneficiaries. As we know, beneficiaries, inducements to Medicare beneficiaries are generally prohibited in the Medicare program by the anti-kickback statute and also the beneficiary inducement C M P. However, under breach there are certain, um, beneficiary engagement incentives that can be provided, uh, since, and they fall within the CMS sponsored model, safe harbor to the safe, uh, anti kickback statute, uh, provided the ACO and its providers meet the applicable requirements under the model. And so, you know, I'll touch on those, uh, requirements and restrictions a little bit here. Uh, so one thing that ACOs can provide is in-kind remuneration, um, there two patients. Um, but the, there are explicit conditions that must be pro, that must be met for the in-kind remuneration, uh, the, it must relate to the patient's care, for example. And, um, ACOs and applicable providers must also maintain records sufficient to establish, uh, whether the in-kind remuneration did, uh, did actually meet the required conditions for its provision, um, regarding beneficiary engagement incentives. So ACOs actually under ACO reach may offer part B cost sharing support, as well as what's called chronic disease management rewards provided, once again, they comply with the requirements set forth and participation agreement. Um, and if an ACO wants to offer these engagement incentives, they, they must be included in the ACOs initial, uh, performance year selections, and also included in the ACOs implementation plan that is submitted to cms. And additionally, what I'll say about the engagement incentives and, um, the beneficiary engagement incentives is that applicable providers must again, uh, must also keep sufficient records and the ACO must compete, uh, keep sufficient records for the these incentives. And additionally, the ACO must have a written agreement with its applicable participant, preferred providers for part B cost sharing support. Um, so, you know, that was a, as Derek mentioned, it is kind of a brave new world on this marketing, but there are, there's quite a bit of, um, explicit restrictions on what you can do with marketing. It's important to be, be mindful of those and be aware of those, uh, as you drive voluntary, uh, engagement. So there are some additional compliance issues I think that are worth getting into. Derek, um, you know, what, um, what are some of the main compliance issues that you are, that you have identified with a ACO reach?
Speaker 3:Yeah. Uh, you know, I, I think it would be impossible to talk about a, uh, a risk-based contract in the Medicare setting without mentioning, uh, coding and risk adjustment is a potential compliance concern. I think the exact application of, uh, how, uh, coding and and risk assessment rules would apply here and kinda what recourse for, uh, recovery there might be, I think is maybe a little bit murier than, uh, what we see in Medicare Advantage, uh, or even the individual me market, um, where there's, you know, clear, uh, data validation on its, uh, here it's a, a little bit less, less obvious, but I think, um, ensuring that, uh, you've got, uh, resources dedicated to, uh, coding accuracy and, and regulatory, uh, changes is definitely gonna be key. Making sure that you have got, uh, more or less all parties involved in, in, in, and the amount of coding, uh, well educated and they have the supporting, uh, documentation that they need and the requirements, uh, for, for coding for sure. Uh, uh, and, and then really the, the simple blocking and tackling of, to the extent that say you're doing a, a chart review, you're, you're thinking about things and from both an ad perspective as well as a delete perspective, um, and, and just making sure that, uh, you know, to the extent that document, uh, conditions are documented, uh, at the time of the encounter, um, they, they really should require, uh, or affect patient care treatment or management. Uh, we're not, we're not coding for coding sake here, so I think we'd be remiss not to, to highlight risk assessment here as it's one, a critical element of just success in the program. But, but it's also a, a key compliance point. Then the other I think is, is, uh, executing against, um, your, your health equity, uh, goals and, and intentions. I think this is another one where, um, the exact kind of ramifications of, of, of failure I think are, are less obvious. But, um, certainly the expectation and, and just within the name itself, right? Uh, that there's clearly a, a focus on, uh, working through health equity issues. And so, um, in the applications it was required to, uh, have a, a health equity plan and, and make sure that your a c was, was aligned to solve health equity issues. And so making sure that we're actually executing against that while we're monitoring our, our progress and, and collecting data, I think are all gonna be key elements there.
Speaker 2:Yeah, and you know, it, it's<laugh> I think it's probably fair to say that ACO reach or arose out of some controversy, you know, I just as a bit of background, the, the, the Biden administrative scrapped G P D C in response to criticism, um, particularly from congressional Democrats around, uh, concerns that G P D C was privatizing Medicare and, and ACO reach, it was kind of the Biden administration's response of these efforts. And, you know, in addition to that, C M s emphasized that it, it had enhanced its monitoring and vetting efforts in the model. Um, and so, you know, I, I think it's, it's fair to say that I, I would expect that the level of scrutiny over this model and compliance expectations will go beyond what might have been experienced previously. And, you know, I, I think there's some other, um, compliance issues in addition to what you, uh, you mentioned about health equity and also coding and risk adjustment. And one of those I would highlight is also the, the governance and ownership requirements under reach. Um, so as most of us know, the, the ACO must be a distinct legal entity with its own governing body, uh, and that governing body must have the exclusive authority to execute the functions of the ACO and make final decisions on behalf of it. And what's new to ACO reach relative to G P T C is the composition of, um, votes in term the composition of control of the governing body. So under ACO reach, 75% of the votes of the governing body must be held by participant providers, whereas previously under uh, G P T C G P D C, it was only 25%. And this is really, this emphasizes that these are st, these are provider led organizations. And so I, I I, I make that comment just because I, I think, you know, anyone interested in potentially, uh, transactions involved with, uh, a reach a c o you, you wanna, you'll wanna make sure that you're comfortable with that, um, that sort of, uh, control arrangement for the governing body. And, you know, potentially maybe some might want to explore the possibility of a, a friendly PC arrangement with participant providers of the A C o, uh, as an alternative. Um, a couple of other notes regarding the governing board, uh, the consumer advocate and the, the governing board must consist of at least one, uh, consumer advocate as well as one beneficiary representative. And this is also a change from G P D C in that both the consumer advocate and beneficiary representative must have voting rights and they cannot be the same person. Uh, the la and lastly, I'll highlight one, um, new change regarding ownership is that, uh, no person or entity that holds an ownership interest in a standard or new aco. O There are three types of ACO standard new and high needs. If you own a interest in a standard ownership interest in a standard or new aco, you cannot hold an interest in a high needs ACO that operates in the same ACO service area. And ownership interest, just so everyone knows, is defined to be 5% or greater combined director indirect ownership interest in the aco. Um, the last thing I'll get to on, on compliance is downstream provider contracting. I think, uh, the, this is a bit of a bedrock to the, the pro the model because the, the relationship between the providers and the ACO is really going to be what drives success. And, um, but there, so there are explicit requirements regarding these provider contracts, and one of which is, unless, uh, two applicable exceptions apply, uh, which I won't fully describe here, uh, the ACO must have executed written agreements with each of its participant and preferred providers, and they must add a minimum satisfied the prescribed requirements set forth in an ACOs participation agreement. So, you know, for those who have clients that are contemplating transactions with REACH ACOs, um, you'll probably wanna make sure that the, you know, form agreements for the ACO comply with these requirements set forth in the participation agreement. Uh, additionally, um, ACOs must require their participant and preferred providers to comply with many requirements set forth in participation agreement. I touched on this a little bit with the marketing restrictions. Um, so, you know, before joining an aco, a provider will, will want to carefully review the a c o provider agreement, understand what obligations the provider will have under the agreement, and how certain responsibilities, you know, such as the record keeping requirements that I mentioned, and the, and the, uh, marketing restrictions, um, how those are gonna, how that responsibility is gonna be allocated, and does the provider have the infrastructure to handle that. Um, and, uh, so as an aside, um, physicians and non-physician practitioners can be added to a participant during a performance here only in limited circumstances. And also furthermore, no provider, regardless of the, the type of provider can participate in capitation for a performance year in which they are added during. Um, so it's all that I, I add that to say providers probably or, or may prefer to join ACOs per participation at the start of a subsequent performance year rather than, than during our performance here. Um, so that's, you know, I think that touches on some of the main compliance issues. And I, I think, Derek, you know, from my perspective, it's coordination among ACOs and their providers is gonna be key in making sure there's compliance success throughout the program and make sure making sure that there's a, a strong governing body that's monitoring that the ACO is actually executing against its health equity plan and other, um, other plans. Uh, are there any other, you know, last words regarding compliance that you have?
Speaker 3:Yeah, I, I think, uh, well said this is not exactly a, a set it and forget IT type type model. It's definitely gonna require active management and, and coordination. Uh, and so, um, where I, I think, uh, historically say compliance with, uh, the M S S P program was fairly straightforward. I think there's a whole lot of complexity that comes along with all that model flexibility and, and all the bells and whistles that come with, with the REACH G C O program. And so definitely requires a lot more active monitoring.
Speaker 2:Well, great. Well, that wraps up the content we were, we wanted to cover today regarding a c o reach. Uh, I really thank the listeners for sticking with us, and I hope you found this, uh, this content beneficial as you learn more about the, uh, the ACO reach program.
Speaker 3:Thanks so much, Cohen. Great talking to
Speaker 2:You. Thanks Terry.
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