Don't become ensnared by physician ACO exclusivity clauses

If you are a specialist physician considering signing with an accountable care organization, it is important to consider if your contract stipulates that this will be the only ACO in which you and your practice colleagues can be a part.

That's because the physician exclusivity provisions of the Medicare ACO regulations potentially may preclude physicians within many specialties from participating in more than one ACO.

Patient assignment and physician exclusivity to an ACO are based on “primary care services” provided to a Medicare beneficiary under a Medicare billing number linked to the federal taxpayer identification number, or TIN, of an ACO participant. However, primary care services are broadly defined under the ACO regulations and include any service within specified HCPCS billing codes (e.g., 99201-99215, 99304-99340, 99342-99350, G0402, G0438, G0439).

Many of these HCPCS billing codes are used by primary care physicians and specialists alike. For example, some of the evaluation and management codes within the definition of primary care apply to E&M services provided by both primary care and specialist physicians in office, outpatient, home and nursing facility settings.

ACO regulations state that if Medicare patient assignment to an ACO is dependent on the TIN of a participant, it must be exclusive to that ACO. The exclusivity standard extends to all physicians within a group practice. When a TIN is exclusive to an ACO, all physicians providing services that are billed through the group practice will be exclusive to that ACO.

Alternately, if patient assignment is not dependent on the TIN of an ACO participant, that ACO participant's TIN is not required to be exclusive to a particular ACO, and the physicians may participate in multiple ACOs.

For a single-specialty or multispecialty group practice, the ACO exclusivity analysis will focus primarily on whether any physician in the group provides services that are billed under the E&M codes for office, outpatient, home or nursing facility visits, and whether the Medicare patient sees a primary care physician during the applicable time period.

This patient assignment process can ensnare unsuspecting physicians due to the broad definition of primary care services under the ACO regulations that can trigger assignment and exclusivity; the lack of any minimum threshold for assignment; and the interdependence of all physicians, physician assistants, nurse practitioners and clinical nurse specialists within a group practice.

For example, a specialist providing an E&M service that falls under any of the primary care service codes to a single Medicare patient who does not see a primary care physician within a particular time frame can trigger patient assignment and group practice exclusivity to an ACO.

Ways to avoid exclusivity

Specialty physicians and group practices can take steps to avoid exclusivity under the ACO regulations and enhance their ability to participate in multiple ACOs.

For one, specialists should encourage their patients to see a primary care physician. Specialists may want to consider providing a list of primary care physicians' names and contact information to better streamline the process for the patient. If the Medicare patient sees a primary care physician, the services provided by the specialist would not be considered in determining the assignment of the patient.

This approach has some risk, in that a Medicare patient who obtains services within the primary care service codes might not see a primary care physician during the applicable time period and still would be assigned to an ACO based on E&M office visits furnished by specialists. The patient's freedom of choice of physician is an additional consideration.

Another way for specialty physicians to increase the probability of participating in multiple ACOs is to furnish services under a separate entity that bills under a separate TIN, rather than billing the services under the TIN associated with the group practice. One way to accomplish this separation is to provide some services under a professional services or employee leasing agreement with a hospital or other health care provider, which bills for the services under its TIN.

Other options include forming a separate entity to retain physicians and bill for their services, or allowing physicians to work part time for other health care entities. Another option is for a physician to enroll and bill under his or her Social Security number.

Billing under separate TINs or under the physician's SSN is a start, but it is subject to limitations and pitfalls. Such arrangements should be structured carefully to comply with contractual obligations and legal requirements. In particular, health care practices whose physicians split their practices among multiple entities may find it difficult to avoid the reimbursement restrictions of the anti-markup rule or to satisfy the Stark law “group practice” definition and in-office ancillary services exception.

Billing through multiple entities can complicate the administrative responsibilities for the practice's office personnel and billing company. For example, if a specialist bills under multiple TINs within a single group practice, it may be challenging for office staff to ensure that records and billings reflect the appropriate health care provider for each patient. An additional concern is that the use of multiple TINs may require written consent by third parties (e.g., payers) to avoid breaching contractual and fiduciary obligations.

Specialists also could consider if they can bill appropriately for certain services under billing codes that are not primary care services as defined under the ACO regulations. For example, office visits may be billed as part of a global fee for surgery or other procedures. In many cases, however, billing under multiple codes may be limited, as it may require the group practice to forgo payment for part of the services performed.

Until the Centers for Medicare and Medicaid Services amends or interprets the ACO regulations to provide greater flexibility, specialists across various fields of medicine will continue to run some risk by participating in multiple ACOs. In light of the legal landscape for ACOs and specialist physicians in particular, careful consideration and planning is imperative for specialists seeking participation in multiple ACOs.