Lawmakers push CMS to prevent fraud, abuse in ACO REACH model

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U.S. Senator Elizabeth Warren (D-Mass.) and Representative Pramila Jayapal (D-Wash.) are spearheading an effort by lawmakers to compel the Centers for Medicare and Medicaid Services to look at the ACO REACH model, with an eye toward preventing program participation in 2023 for organizations with a history of fraud.

According to CMS, the ACO REACH model will replace the Global and Professional Direct Contracting Model beginning in January, with participants in the latter allowed to enroll in the former if they agree to meet the compliance requirements.

Warren, Jayapal and others wrote a letter to the agency expressing reservations about the model, saying it may allow insurers and providers to harm the Medicare system.

According to the letter,  a preliminary review of these Direct Contracting Entities (DCEs) participating in the GPDC found at least 10 of these organizations have records – in some cases, extensive records – of healthcare fraud, abuse, and violations of healthcare laws prior to 2021.

“These entities were accepted into the GPDC program in 2021, and have continued to operate in the program even as CMS pushes for additional oversight, vetting, and transparency,” lawmakers wrote.

They’re particularly alarmed by the findings of a preliminary review of the DCEs conducted by Physicians for a National Health Program (PNHP), which lawmakers said identified at least 10 participating organizations that have documented cases of defrauding Medicare and other government health programs.

“The inclusion of these DCEs in the Global and Professional Direct Contracting Model is a significant concern after these companies’ previous failures to follow the law,” they wrote. “The ability of organizations with known histories of fraud and abuse to take part in the program increases the risks for Medicare beneficiaries, and raises concerns that CMS screening procedures for participants are inadequate, putting taxpayer dollars at risk.”

WHAT’S THE IMPACT

The letter singled out several major insurers by name in citing cases of fraud and abuse. For instance, they cite an audit by the Department of Health and Human Services Office of Inspector General finding that Humana, which operates a DCE in 13 states, improperly collected nearly $200 million in 2015 through upcoding and “overstating how sick some patients were.”

Clover Health, meanwhile, was investigated by Congress for allegedly giving Wall Street insiders opportunities to make millions “while retail investors lost over 65% of their stock value,” lawmakers said. And Bright Health, the parent company to multiple DCEs, described the Medicare fee-for-service market as a “$430 billion opportunity” in a 2021 regulatory filing. The Colorado Division of Insurance received over 100 consumer and healthcare provider complaints regarding Bright Health since 2021, leading to a $1 million fine and a formal agreement with the company to address operational improvements, according to the Wall Street Journal.

“The ACO REACH model’s 2022 request for applications includes required disclosures of any sanctions, corrective actions, and fraud investigations faced by the organization or any individuals with ownership interests, but similar requirements did not appear to be able to keep these organizations out of the predecessor Direct Contracting program,” lawmakers wrote. “In addition, if these organizations are automatically included in the ACO REACH program without further review of their histories of fraud and abuse will further undercut these requirements.”

They suggest that, before the ACO REACH program begins, CMS should halt participation by any organizations that have committed healthcare fraud, and terminate DCEs that don’t meet the new standards for the program.

THE LARGER TREND

The ACO REACH Model will require all participating ACOs to have a robust plan describing how they will meet the needs of people with traditional Medicare in underserved communities and make measurable changes to address health disparities. This includes greater access to enhanced benefits, such as telehealth visits, home care after leaving the hospital, and help with copays, CMS said in February. 

CMS said it would use an innovative payment approach to better support care delivery and coordination for people in underserved communities.

REACH ACOs can include primary and specialty care physicians.

The Global and Professional Direct Contracting Model was controversial because opponents, including progressive Democrats, believed it would lead to the privatization of Medicare.

Physicians for a National Health Program, an organization of 25,000 doctors who support Medicare for All and oppose Medicare privatization, has rejected the ACO REACH model, as it did the GPDC. Others applauded CMS’s redesign, including Premier and The National Association of ACOs.
 

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