Ask the legal expert: What legal considerations should providers ponder before joining an ACO?

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Attorney John Durso, Ungaretti & Harris LLP
Attorney John Durso, Ungaretti & Harris LLP
Q: What should we, as operators, be aware of legally when it comes to getting into or forming an accountable care organization (ACO)? 

A: Your organization can add value by integrating with acute care providers, in an ACO or otherwise, and ensuring that individuals receive efficient, high-quality care as they transition from the acute to the post-acute and long-term care environments.

The creation of an ACO, or otherwise integrating acute and post-acute providers, does however, implicate a variety of legal issues.

For example, if your organization is exempt from federal income tax, probably the most important legal issue for you is ensuring that participation in the ACO does not jeopardize your tax-exempt status. The IRS has specific rules regarding the ability of tax-exempt entities to collaborate with taxable entities, so ensure that your ACO is organized and operated in a way that complies with those rules.

You also want certainty that the distribution of any shared savings or payments are structured to meet exceptions and regulatory safe harbors to the fraud and abuse laws so the government does not consider the distribution of shared savings to be a disguised payment for a patient referral.

Further, ACOs should be organized to mitigate risk that an antitrust enforcement agency would interpret the effort as collusion on the part of otherwise competing healthcare providers. Coordination in an ACO is permissible if entities can demonstrate that their efforts create certain efficiencies that benefit consumers.

Fortunately, federal agencies have issued ACO-specific legal guidance, which provides more certainty for operators interested in taking advantage of these new financial incentives.

Please send your legal questions to John Durso at ltcnews@mcknights.com.
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