Mike Cassidy Archives – Western Pennsylvania Healthcare News

Mike Cassidy, a shareholder in the Tucker Arensberg’s Business and Finance Department, concentrates his practice in Health Care Law, chairs the firm’s Health Care Practice Group, and is a member of the Employee Benefits Practice Group.
His practice as a health law attorney includes the fundamental business transactions relating to the formation and governance of healthcare entities. Mike has extensive experience in third party reimbursement, managed care contracting, fraud and abuse, Stark issues, medical staff, peer review and credentialing issues, corporate compliance, and tax exempt organization issues. Mike’s healthcare experience also includes HIPAA and HIT privacy and security issues, including serving as counsel for the Regional Extension Center (REC) program, and very active in PAeHI and the Healthcare Information and Management System Society (HIMSS) related projects.
Mike was named to the list of Best Lawyers in America® in 2009, 2010 and 2011 for Health Care Law, as well as one of Pennsylvania’s Super Lawyers® for Health Care Law in 2005, 2006, 2007, 2008, 2009, and 2010. He received the Pennsylvania Bar Association's "Excellence in Health Care Law Award" for 2003. Mike is the publisher of the Med Law Blog (www.medlawblog.com), the firm's health law blog.

Contact Information

Phone: (412) 594-5515
Email: mcassidy@tuckerlaw.com
LinkedIn: www.linkedin.com/in/michaelacassidy

The Progress and Promise of ACOs

May 14, 2012 by The Western PA Healthcare News Team

By Mike Cassidy, Esq.

Since Accountable Care Organizations (“ACO”) are one of the featured topics for the May edition of Hospital News, I thought it would be appropriate to revisit the progress and evaluate the promise of ACOs to date.

I last wrote on this topic in the December 2011 Thought Leader column, and indicated there had been little progress, at least with the federal ACO model, which is the Medicare Shared Savings Program as of that time. I also cited a study done by Leavitt Partners in November 2011 entitled the “Growth and Dispersion of Accountable Care Organizations.”

The key findings of the Leavitt study stated there were 164 ACOs being developed, 99 by hospitals, 38 by physician groups and 28 by insurers. Most of these commercial products were concentrated in higher income/higher population areas with the majority of the ACOs being concentrated in just eight states, the leader of which was California.

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Pioneer ACOs Announced by CMS

December 23, 2011 by The Western PA Healthcare News Team

Mike Cassidy

On December 19, 2011, CMS issued a press release announcing that 32 leading health care organizations across the country will participate in a new pioneer Accountable Care Organization (ACO) initiative. CMS believes that the pioneer ACO initiative will “encourage” providers to deliver better and more coordinated care and expects that this could save up to $1.1 billion over five years.

CMS describes the pioneer ACO model as an initiative complementary to the Medicare Shared Savings Program designed for organizations with existing experience providing integrated care across a variety of health care settings. The pioneer model is intended to test the rapid transition to a population-based model of care.

The pioneer initiative model differs from the Medicare Shared Savings Program in the following ways:

The first two years of the pioneer ACO model are a shared savings payment arrangement with higher levels of savings and risk than the Medicare Shared Savings Program.

Starting in year three of the initiative, those organizations that have earned savings over the first two years will be eligible to move to a population based payment arrangement and full risk arrangements that can continue through optional years four and five.
Pioneer ACOs are required to develop similar outcome-based payment arrangements with other payors by the end of the second year.
Under the pioneer ACO model, beneficiaries do not enroll in an ACO. Primary care providers and other health care providers make the decision to participate in ACOs, meaning that beneficiaries will not need to take a proactive action to receive the benefits offered through an ACO. Although ACOs are required to notify beneficiares of the ACO participation, insuring the beneficiary is aware of the new arrangement, but the beneficiary maintains complete freedom to visit any health care provider accepting Medicare.

Are ACOs the Answer?

December 6, 2011 by The Western PA Healthcare News Team

Mike Cassidy

By Mike Cassidy

It may seem contradictory that Accountable Care Organizations (ACO) are championed as the new answer to manage more efficiently (i.e. improve quality and reduce costs) when the most popular form of ACOs, i.e. the Medicare Shared Savings Program, established in 2010 as a component of the Patient Protection and Accountable Care Act has yet to launch a single ACO. In fact, the regulations have just recently been finalized, and CMS is just now beginning to receive applications to participate in the Medicare Fee for Service Program as an ACO.

The ACO concept is probably misunderstood because there is no generally accepted definition. Many people think of ACOs as the legal entities that will participate in the Medicare Program, but the term is generically being applied to many types of health care delivery systems. Perhaps the simplest definition is one coined by Mark McClellan, who describes an ACO as “an organization seeking per capita improvements in quality and costs.”

While CMS has been developing the regulations for the Medicare ACO program, generic ACOs are already up and running, and in some cases have been for quite a few years. A recent study by Leavitt Partners indicates that there are 164 identified ACOs across the country. Of those, 99 are primarily sponsored by hospitals, 38 by physicians’ groups and 28 by insurers, and they tend to be developed in higher income and more populated areas of the country. In fact, a majority of the ACOs are identified as being headquartered in only eight states, with California having almost twice as many as the next highest states.

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Final CMS Accountable Care Organization Regulations Provide ACOs More Flexibility

October 28, 2011 by The Western PA Healthcare News Team

Mike Cassidy

By Mike Cassidy

CMS has finally released the final rule for the Medicare Shared Savings Program, which is the program that establishes the rules for Accountable Care Organizations (ACOs).

The initial industry objections to the ACO concept and the proposed regulations was that it was so complicated, so limited and potentially so expensive that it would be impossible, or at least impractical, for any organization other than an all ready large and well established integrated delivery system to actually qualify as an ACO. Interestingly enough, the entities that were already in existence and best suited for Medicare ACO qualification expressed little interest in the concept, presumably believing that they would qualify for the incentive programs and savings programs available from Medicare and other third party payors without the need of establishing an entity that qualified as an ACO within the requirements specified by CMS. The final rules expect to relax those requirements and make ACOs more available and less risky, in an attempt to attract more potential participants.

Early predictions were that ACOs would be developed to cover less than 5% of the available Medicare fee for service beneficiaries. It is too early to tell whether these relaxed regulations will change that outlook.

The ACO regulations are voluminous. For those interested in establishing ACOs there is no substitute for actually parsing the regulations section by section. However, for those interested in simply understanding what the changes have been, the Commonwealth Fund has published a well written and organized summary of the changes and a table identifying those changes, which is linked to this article.

U.S. Physician Practices Spend Four Times As Much As Payer Administrative Money As Canadian Counterparts

August 12, 2011 by The Western PA Healthcare News Team

Mike Cassidy

A commonwealth fund supported studies reported some key findings:

1. Physician practices in the United States spent $82,975.00 per physician per year interacting with payers compared with $22,205.00 in Canada.

If U.S. physicians had similar administrative costs to their Canadian counterparts, the total annual savings would be $27.6 billion dollars.
U.S. nurses and medical assistants spent 20.6 hours per week on administrative tasks related to health plans, which is nearly 10 times the 2.5 hours spent by Canadian nursing staff.

I have attached a link with a scan of the highlights of the study.

Healthcare Industry Groups Comment on EHR and Health Reform

July 11, 2011 by The Western PA Healthcare News Team

Mike Cassidy

By Mike Cassidy

In two separate letters, one just by the American Hospital Association and one by a consortium of industry groups, AHA, AMA, AMDIS, CHIME, EHRA, FAH and HIMSS, industry has submitted extensive comments to HHS regarding these issues. Comments focus on five areas of opportunity and challenge:

1. Reduce regulatory complexity;
2. Clarify certification and site certification processes;
3. Address meaningful use issues;
4. Clarify and improve the compliance process; and
5. Evaluate/coordinate the overlapping regulatory time line

Although both letters are instructive, the attachments to the AHA letter provide a useful summary of the issues. Attachment A charts the legal barriers to clinical integration, i.e.

Antitrust
Stark
Anti-Kickback
Civil money penalties
IRS tax exemption issues

Attachment B indicates the complexity of the overlapping requirements for transition to ICD-10, meaningful use, health reform and HIPAA 5010.

Easier Softer ACOs

May 31, 2011 by The Western PA Healthcare News Team

Mike Cassidy

Although the ink is barely dry on the proposed regulations for Accountable Care Organizations (ACOs), there are already harbingers that ACOs may not be the Health Care Reform savior they were intended to be.

First, a study by the American Hospital Association states that the estimate initially made by CMS for the cost of establishing an ACO, which was $1.8 million, is significantly understated. The AHA has estimated that a 200 bed single hospital system would need $1.6 to create an ACO and that a five hospital system with 1,200 beds would need $26.1 million to create this larger version of the ACO.

Second, CMS is already offering easier softer versions of ACOs, and have issued a press release announcing the following:

Pioneer ACOs: The Pioneer ACO process is intended to entice existing integrated systems which have already adopted significant care coordination processes to move further and faster into seamless coordinated care by utilizing the new ACO payment methodology.

Advanced Payment ACOs: This model would give certain ACOs participating in the Medicare Shared Savings program access to their shared savings upfront, which is intended to assist with the now presumably greater investment necessary to establish the ACO.

Accelerated Development Learning Sessions: This initiative is a free program funded by CMS to educate providers regarding the ACO process.

For more information or to contact Mike Cassidy, visit his Featured Thought Leader Page on this site.

ACOs and Anti-Trust

April 13, 2011 by The Western PA Healthcare News Team

Mike Cassidy

By Mike Cassidy

In last month’s post entitled “Reform Redux,” I mentioned that one of the foremost issues for the coming year would be the development of Accountable Care Organizations (ACOs). The two most troublesome issues in developing ACOs will probably be the Anti-Trust and the Anti-Kickback/Stark issues. Traditionally, this regulatory structure has made it almost impossible for multiple providers to agree in any joint venture to provide health care services:

The Anti-Trust laws basically prohibit agreements (affectionately known as conspiracies) among competitors to fix prices, which is evident by the many enforcement actions taken against IPAs, PHOs, etc.

The combination of the Stark law prohibiting referrals to entities with which physicians have financial relationships, the Anti-Kickback statutes prohibiting payment in exchange for referrals, and the Civil Money Penalties statute prohibiting incentives to withhold care, basically eliminate any meaningful opportunities to operate as anything other than an integrated delivery system, which operates as a single entity.

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ONC Announces Open Public Comment Period on the Federal Health IT Strategic Plan: 2011-2015

April 12, 2011 by The Western PA Healthcare News Team

Mike Cassidy

By Mike Cassidy

Several days ago, I posted an article about health reform and it’s Top Ten Issues. Just this week, CMS and ONC have launched massive projects along those line, i.e. the combined regs from CMS, FTC, OIG and the IRS regarding Accountable Care Organizations, and the 2011-2015 Heath IT Strategic Plan. Links to all material are available at www.medlawblog.com, and we’ll be addressing those issues here in the near future.

The Office of the National Coordinator for Health Information Technology (ONC) today announced an open public comment period on the Federal Health IT Strategic Plan: 2011-2015 (“the Plan”). The Plan reflects ONC’s strategy, developed in collaboration with other federal partners, over the next five years for realizing Congress and the Administration’s health IT agenda.

Despite evidence of the benefits of the use of health IT, today only 25-percent of physician offices and 15-percent of hospitals take advantage of electronic health records (EHRs). Two major pieces of legislation, enacted over the past two years, are dramatically changing the health IT landscape and providing an opportunity to modernize the way care is delivered and improve the health of all Americans – the Health Information Technology for Economic and Clinical Health (HITECH) Act and theAffordable Care Act. The Plan, originally published in 2008, is being updated to reflect the significant impact of these two pieces of legislation.

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