September 13, 2016 Articles

Fraud, Abuse, and the Value-Based Payment Regime: Is New Thinking Needed?

The structure of healthcare payment in the United States is changing.

By Jeremy D. Sherer – September 13, 2016

The structure of healthcare payment in the United States is changing. For decades, the Centers for Medicare & Medicaid Services (CMS) has reimbursed physicians under a straightforward fee-for-service methodology. The Medicare Shared Savings Program (MSSP) initiated a shift away from that payment system, and the value-based payment regime is picking up steam after enactment in 2015 of the Medicare Access and Chip Reauthorization Act (MACRA), which created a new physician payment methodology through the Merit-Based Incentive Payment System (MIPS) and Advance Payment Models (APMs). Stated simply, this system rewards physicians who are able to create cost savings while also increasing the level of care provided, as demonstrated by achieving discipline-specific quality metrics.

Accountable care organizations (ACOs) were created as vehicles to implement the MSSP, which is premised on a value-based payment methodology. Importantly, with the advent of the MSSP, CMS granted ACOs waivers to protect them from many of the federal fraud and abuse laws that apply in the healthcare sector. As healthcare financing continues to move toward value-based care, ACOs will continue to grow, and fraud and abuse practitioners will be well served to review the fraud and abuse waivers that apply to ACOs. Beyond compliance with the waivers themselves, the introduction of a new payment system that determines physician compensation differently than the fee-for-service system may mean that it is time to reconfigure the federal fraud and abuse laws.

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