CMS pilot programs aim for multipayer platforms

June 1, 2011

As payment reform demonstrations begin in earnest, streamlining provider incentives across all payers deserves increased attention.

The Obama administration has indicated its preference for demonstrations and pilot programs that leverage multiple payers to drive reform. Most recently, the announcement regarding the community-based care transitions or readmissions program emphasized that applicants must address how they will align their care transition programs with care transition initiatives sponsored by payers other than Medicare, including Medicaid, Medicare Advantage and the private sector.

Corporate governance-Recent guidance promulgated by the administration for payment reform efforts indicates that regulators are placing specific requirements on applicants with respect to corporate governance, including the individuals that should be represented on the boards of the organizations. In the case of the proposed rules for Accountable Care Organizations (ACOs), for example, ACOs must have a compliance program certified by "a designated compliance official or individual who is not legal counsel to the ACO and who reports directly to the ACO's governing body."

This requirement is in line with the administration's efforts to hold officers and directors individually accountable for organizational activity by ensuring the board is aware of compliance activities.

Increased monitoring-Entities participating in multi-payer demonstrations may be subject to additional audits by various payer groups. Requirements could include providing government agencies, their contractors and other entities the right to inspect documents, data, corporate systems and organizational relationships, including quality performance measures and financial arrangements impacting the demonstration. Be prepared to locate and produce this information quickly.

Regardless of the construct of the demonstration, contracts with CMS present unique challenges. Payment reform demonstrations can help you drive innovative payment policy by showing policymakers what works and what does not.

Yet, entering into an agreement with CMS to conduct a demonstration requires appropriate legal consideration, including compliance, corporate governance and reporting and monitoring requirements, among other concerns. Entities should be mindful of these tradeoffs and take appropriate steps to prepare accordingly.

Summer Martin is a partner at McKenna Long & Aldridge LLP

Jessica Abrahams is a partner at McKenna Long & Aldridge LLP

This column is written for informational purposes only and should not be construed as legal advice.