PPACA Quick Review

1. Corporate Supercitizen
Privately owned physician practices have become specialized in the
area of separating quality care and expensive fees in a patients needs
when it comes to treatment and providing surgical services for heart
disease, orthopedic, surgical, and spinal care. These collective actions
over the past thirty-years has led to operating outside of the guided
scope of quality care for patients. Doctors had become fed up with
receiving low fee-for-service reimbursement and felt they were entitled
to higher fees in return for the expertise and self-cost of obtaining a
professionalism status. The low reimbursement rates set for treating
Social Security patients who were insured by Medicare or Medicaid
dealing with major surgery and their outcomes was not enough. In
association to provided continual routine care no reward in incentives
to physicians for patients receiving the best care was available. To get
around the stipulations of certain regulatory laws, physicians sought to
partner with peers and private investors as health care delivery
businesses, instead of operating under a low reimbursement fee-for-
service hospital payment system. Thus resulting in the forbidden
creation of roles of formed sole proprietorship in practical medicine.
These impartial efforts to evade regulation by the government resulted
in Stark Laws. A set of rules used to prohibit physician self-referrals to
facilities offering additional services for inpatients and outpatients.

2. Fee-For-Services Reimbursement
Methodology
CMS Medicare Set Fee
Schedule
Billing practices of fraud:
 100% reimbursement fees for
Medicare Services
 80% is paid by Medicare
 20% is regulated to be paid by
patient with legal
consequences if not received
in full
 115% can be charged for a
service rendered under
Medicare’s set fee schedule
Specialized Professional
Surgical Fees
 Private Practicing Physicians
can receive:
 80% from Medicare
 35% from the Patient

3. Legalized Efforts
Advance Beneficiary Notices:
 If Medicare does not cover the elective services physicians can
legally bind patients to paying the full 115% of care out of pocket
 Not to seem harsh some medical practices only require 70% to high
cost or 95% for low cost fee-for-services to be paid out of pocket on
a reasonable payment plan option for fixed income patients
through the duration of extended care
 Private insurers often have to pay 70% upfront in order to receive
care they schedule out on a future date while making
arrangements to set up a payment plan prior to their service date

4. Specialty Care is often Routine Care
 Heart surgery requires monitoring and updating of equipment if you
do not service your equipment at a rendered fee-for-service your
equipment will fail and diminishing the quality of life
 Accountable Care is a plan to work with providing patients the
opportunity of utilizing preventive medicine in hopes of improving
ones health before a major illness becomes an acute or chronic
condition

5. Regulatory Agencies
 1899 and 115A give the Secretary of Health and Human Services
authority to waive certain fraud and abuse laws and add Safe
Harbors as necessary to achieve the goals of each section,
respectively. In conjunction with the issuance by CMS of the
proposed rule that would establish ACOs, CMS and the Health and
Human Services Office of Inspector General (OIG) issued a joint
notice with comment period outlining proposals for waivers of
certain Federal Laws – the physician self-referral law, the anti-
kickback statue, and the civil monetary penalty law – for Shard
Savings Program. CMS and OIG have also solicited comments on
further waiver design consideration for the Shared Savings Program
and Innovation Center.

6. Regulations
 The Physician Self-Referral Law (Section 1877(a) of the Social
Security Act ((the Act)), which prohibits physicians from making
referrals for Medicare “designated health services,” including
hospital services, to entities with which they or their immediate
family members have a financial relationship, unless an exception
applies.
 The Federal Anti-Kickback Statue (Section 1128B(b) of the Act),
which provides criminal penalties for individuals or entities that
knowingly and willfully offer, pay, solicit, or receive remuneration to
induce or reward the referral of business reimbursable under any
Federal Health Care Program, as defined in section 1128B of the
Act.

7. Waivers
 The Civil Monetary Penalties law (Section 1128A(b)(1) and (2) of the
Act) that prohibits a hospital form making a payment, directly or
indirectly, to induce a physician to reduce or limit services to
Medicare and Medicaid beneficiaries under the physician’s direct
care the (CMP).
 Waivers only for Anti-Kickback statue and CMP, certain financial
relationships that are necessary for and directly related to the ACOs
participation in the Shared Savings Program and fully comply with
an exception to the physician self-referral law.

8. Monopolizations, Anyone…. Anyone!
Antitrust concerns focus on whether Providers will exercise Market
Power to raise prices above competitive levels. Typically targets
Medical Doctors negotiations with Health Plans, joint negotiations of
Physicians under the Sherman Act in three steps.
I. Economic Integration among Physicians: Joint negotiations by
completely independent practices are condemned as “Naked,”
price fixing.
II. Whether they are reasonably necessary to achieve efficiencies.
III. “Rule of Reason,” to assess its effect on competition collaborating
that gives Physicians Market Power to raise rates above
competitive levels are unlawful. Entities that market below 30 –
40% are unlikely to have such power. Rule of Reason places heavy
burdens on Antitrust enforcers, who must define relevant
geographic markets that render Market-shares too high or prove
that prices (after adjustments for quality improvements) have
increased as a result joint negotiations.

9. Fortney H. (Pete) Stark 1989 the
Revisions & Now
 These waivers would cover shared savings earned during the
agreement period with CMS and, as applicable, financial
relationships existing during the agreement period. The notice and
solicitation of public comment explains the conditions that would
apply to the waivers in more detail. There are five fraud and abuse
waivers…! These waivers protect providers against the application
of certain civil monetary policy law provisions, the Federal Anti-
Kickback Statue, and the Physician Self-Referral law (known as the
Stark Law). These waivers include:

10. Ethics in Patient Referral Act
I. an “ACO pre-participation” waiver that is available for a limited
duration to cover startup arrangements between providers in
anticipation of participation in the Shared Savings Program;
II. an “ACO participation waiver that extends for the term of
participation in the Shared Savings Program as well as a six month
period after expiration of termination.
III. an “Shared – Savings distribution” waiver that applies to
distributions of Shared – Savings payments and their uses;
IV. a “Compliance w Physician Self-Referral Law” waiver that is
applicable to ACO arrangements implicating the Physician Self-
Referral Law meeting an existing Stark Exemption; and
V. a “Patient Incentive” waiver that will allow ACOs to offer
incentives to beneficiaries to encourage preventive care and
compliance w treatment regimens. Examples: DME blood
pressure machines for self management…

11. Proposed Antitrust Policy Statement
 The DOJ and FTC have worked together to facilitate the creation of
ACOs by giving providers the clear and practical guidance they
need to form innovative, integrated health care delivery systems
without running afoul of the antitrust laws.
 Antitrust Agency review of ACOs: DOJ and FTC will provide rule of
reason treatment to an ACO if, in the commercial market, the ACO
uses the same governance and leadership structure and the same
clinical and administrative processes as it uses to qualify for and
participate in the Program.

12. Regarding ACO Participation in the
Medicare Shared Savings Program:
 Safety Zone: The Antitrust Policy Statement describes a Safety Zone
for certain ACOs that participate in the Shared Savings Program.
ACOs that fall within the Safety Zone are highly unlikely to raise
significant competitive concerns and the Antitrust Agencies will not
challenge ACOs that fall within the Safety Zone, absent
extraordinary circumstances. To fall within the Safety Zone,
independent ACO participants that provide a common service
must have a combined share of 30 percent or less for each
common service in each participant’s Primary Service Area (“PSA”),
wherever two or more ACO participants provide that service to
patients from that PSA.

13. Scope of Jurisdiction
 Mandatory Antitrust Review: An ACO applicant that has a share
above 50 percent for any common service that two or more
independent ACO participants provide to patients in the same PSA
is required to obtain a letter from one of the Antitrust Agencies
advising that the reviewing Agency has no present intent to
challenge or recommend challenging the ACO.
 If DOJ or FTC advises it is likely to challenge or recommend
challenging an ACO if it proceeds, the ACO as proposed will be
ineligible to participate in the Shared Savings Program.
 DOJ and FTC have committed to provide a 90 day expedited
review of ACOs that exceed the 50 percent PSA shared threshold.
All required documents must be received at least 90 days before
the last day on which CMS has stated that it will accept applications
to participate in the Shared Savings Program for the relevant
calendar year.

14. Mandatory Exemption Zones
 Additional Antitrust Guidance: ACOs that are outside the Safety
Zone and below the 50 percent mandatory review threshold that do
not impede the functioning of a competitive market and that
engage in pro-competitive activities will not raise competitive
concerns and may participate in the Shared Savings Program w/o
Antitrust Agency review.
If an entity believes that an ACO is engaging in anticompetitive
conduct, it can pursue an appropriate private action or bring the
conduct to the attention of Antitrust Agencies. ACOs should seek
guidance regarding their antitrust risks in an expedited fashion, while
also providing appropriate safeguards so that potential or actual
anticompetitive harm can be identified and remedied.

15. Medical Professionalism Qualifies as
911
Abuse
 Established areas of concern in
private owned physician
facilities is the adequacy of
being able to provide
appropriate care under all
operative situations. Findings in
erroneous care showed that
specialty physician-owned
practices were not equipped
to provide other stabilizing
medical care outside of their
own area of expertise.
Neglect
 Issues of ethics and efficacy
arose with no emergency
centers onsite, lack of other
stabilizing equipment, and
resulting to calling 911 to
provide care to treated
patients because no available
physicians or qualified staff
were at the location of these
highly dangerous operating
facilities when adverse
reactions took place.

16. Business Law Legal Concepts and
Practices
 The source of information is valid because it gives a detailed history
of how we have ended up at the point of implementing a form of
government controlled Health Care in the United States today. A
form of deductive reasoning is used throughout the article,
providing the detailed history, as an overview ½ to 2/3rds of each
page in the article are footnotes. Even though we are at a
benchmark of receiving taxed healthcare services heavily
regulated by the government and operating agencies, clarified
business ethics learned throughout the course explains how we
have arrived here. The guidance and interconnected legal
business knowledge obtained has given an added appreciation in
the efforts used to control fraudulent activities being practiced by
physicians and newly invented corporate supercitizens who have
made a practice of being above the law and outside of quality.

17. Perry, J. E. (2012). Physician-Owned Specialty Hospitals and the Patient Protection
and Affordable Care Act: Health Care Reform at the Intersection of Law and
Ethics. American Business Law Journal 49 369-417. Retrieved from
http://web.a.ebscohost.com.offcampus.lib.washington.edu/ehost/pdfviewer/pdfvi
ewer?sid=427b5fcb-fb3a-4c13-aef2-
1ec207cae27b%40sessionmgr4005&vid=4&hid=4112
QUESTIONS?