Nursing homes want IRS guidance on accountable care organization participation

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Long-term care makes ADP's list of industries most challenged by upcoming health benefits requiremen
Long-term care makes ADP's list of industries most challenged by upcoming health benefits requiremen

Nursing home and hospital provider groups have asked the Internal Revenue Service for clarification and guidance regarding the participation of nonprofit providers in accountable care organizations. Many nonprofit groups are concerned that collaborating with for-profit partners will cause them to lose their exempt status, the Bureau of National Affairs reports.

In comment letters, groups have asked the IRS to articulate scenarios in which exempt providers participating in ACOs and the Medicare Shared Savings Program will be able to contract with private payers within ACOs prior to and after they exit the program. The MSSP and ACO programs were created under the Patient Protection and Affordable Care Act.

LeadingAge, which represents non-profit nursing homes, asks the IRS in its letter to clarify the requirements for continued tax exempt treatment of 501(c)(3) organizations participating in an ACO. LeadingAge advises that not all organizations involved in ACOs are contributing capital but looking to provide better quality of care for beneficiaries.

“The IRS should make clear that the ‘economic benefits' accruing to providers participating in an ACO specifically, receiving a portion of the shared savings — need not be in proportion to their capital contribution, but rather can be distributed on the basis of, or in proportion to, relative quality performance or contributions to cost savings,” the letter recommends.

LeadingAge also advised that the IRS work closely with the Centers for Medicare & Medicaid Services and suggests enlisting more CMS staff to coordinate with the IRS.

In related ACO news, CMS announced that it has moved back to Aug. 19 the deadline for provider groups looking to qualify for the Pioneer ACO model program, giving groups an extra month to apply. CMS expects about 30 Pioneer ACOs, which it claims would save Medicare about $430 million over a three-year period.