42 CFR 512.670 | Sharing arrangements

§ 512.670 Sharing arrangements.

(a) General. (1) A CJR-X participant may enter into a sharing arrangement with a CJR-X collaborator to make a gainsharing payment, or to receive an alignment payment, or both. A CJR-X participant must not make a gainsharing payment to a CJR-X collaborator, or receive an alignment payment from a CJR-X collaborator, except in accordance with a sharing arrangement.

(2) A sharing arrangement must comply with the provisions of this section and all other applicable laws and regulations, including the applicable fraud and abuse laws and all applicable payment and coverage requirements.

(3) CJR-X participants must develop, maintain, and use a set of written policies for selecting individuals and entities to be CJR-X collaborators.

(i) These policies must contain criteria related to, and inclusive of, the quality of care delivered by the potential CJR-X collaborator and the provision of CJR-X activities.

(ii) The selection criteria cannot be based directly or indirectly on the volume or value of past or anticipated referrals or business otherwise generated by, between or among the CJR-X participant, any CJR-X collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a CJR-X participant, CJR-X collaborator, collaboration agent, or downstream collaboration agent.

(iii) A selection criterion that considers whether a potential CJR-X collaborator has performed a reasonable minimum number of services that would qualify as CJR-X activities, as determined by the CJR-X participant, will be deemed not to violate the volume or value standard if the purpose of the criterion is to ensure the quality of care furnished to CJR-X beneficiaries.

(4) If a CJR-X participant enters into a sharing arrangement, its compliance program must include oversight of sharing arrangements and compliance with the applicable requirements of CJR-X.

(b) Requirements. (1) A sharing arrangement must be in writing and signed by the parties, and entered into before care is furnished to CJR-X beneficiaries under the sharing arrangement.

(2) Participation in a sharing arrangement must be voluntary and without penalty for nonparticipation.

(3) The sharing arrangement must require the CJR-X collaborator and its employees, contractors (including collaboration agents), and subcontractors (including downstream collaboration agents) to comply with all of the following:

(i) The applicable provisions of this part 512 (including requirements regarding beneficiary notifications in § 512.622, access to records in § 512.135(b), record retention in § 512.135(c), and participation in any evaluation, monitoring, compliance in § 512.130, and enforcement activities performed by CMS or its designees in § 512.160).

(ii) All applicable Medicare provider enrollment requirements at § 424.500 of this chapter, including having a valid and active TIN or NPI, during the term of the sharing arrangement.

(iii) All other applicable laws and regulations.

(4) The sharing arrangement must require the CJR-X collaborator to have or be covered by a compliance program that includes oversight of the sharing arrangement and compliance with the requirements of CJR-X that apply to its role as a CJR-X collaborator, including any distribution arrangements.

(5) The sharing arrangement must not potentially or actually negatively impact beneficiary access, beneficiary freedom of choice, or quality of care.

(6) The board or other governing body of the CJR-X participant must have responsibility for overseeing the CJR-X participant's participation in CJR-X, its arrangements with CJR-X collaborators, its payment of gainsharing payments, its receipt of alignment payments, and its use of beneficiary incentives in the CJR-X Model.

(7) The specifics of the agreement must be documented in writing and must be made available to CMS upon request (as outlined in § 512.150).

(8) The sharing arrangement must specify the following:

(i) The purpose and scope of the sharing arrangement.

(ii) The obligations of the parties, including specified CJR-X activities and other services, to be performed by the parties under the sharing arrangement.

(iii) The date range for which the sharing arrangement is effective.

(iv) The financial or economic terms for payment, including the following:

(A) Eligibility criteria for a gainsharing payment.

(B) Eligibility criteria for an alignment payment.

(D) Methodology and accounting formula for determining the amount of a gainsharing payment or alignment payment.

(9) The sharing arrangement must not do either of the following:

(i) Induce the CJR-X participant, CJR-X collaborator, or any employees, contractors, or subcontractors of the CJR-X participant or CJR-X collaborator to reduce or limit medically necessary services to any Medicare beneficiary.

(ii) Restrict the ability of a CJR-X collaborator to make decisions in the best interests of its patients, including the selection of devices, supplies, and treatments.

(1) Gainsharing payments, if any, must—

(i) Be derived solely from reconciliation payment amounts, or internal cost savings, or both;

(ii) Be distributed on an annual basis (not more than once per calendar year);

(iii) Not be a loan, advance payment, or payment for referrals or other business; and

(iv) Be clearly identified as a gainsharing payment at the time it is paid.

(2) Gainsharing payment eligibility-

(i) To be eligible to receive a gainsharing payment, a CJR-X collaborator must meet quality of care criteria for the performance year for which the CJR-X participant accrued the internal cost savings or earned the reconciliation payment that comprises the gainsharing payment. The quality of care criteria must be established by the CJR-X participant and directly relate to the episode.

(ii) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment, a CJR-X collaborator other than ACO, PGP, NPPGP, or TGP, must have directly furnished a billable item or service to a CJR-X beneficiary during an episode that was attributed to the same performance year for which the CJR-X participant accrued the internal cost savings or earned the reconciliation payment amount or repayment amount that comprises the gainsharing payment or the alignment payment.

(iii) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment, a CJR-X collaborator that is a PGP, NPPGP, or TGP, must meet the following criteria:

(A) The PGP, NPPGP, or TGP, must have billed for an item or service that was rendered by one or more PGP member, NPPGP member, or TGP member, respectively to a CJR-X beneficiary during an episode that was attributed to the same performance year for which the CJR-X participant accrued the internal cost savings or earned the reconciliation payment amount or repayment amount that comprises the gainsharing payment or the alignment payment.

(B) The PGP, NPPGP, or TGP, must have contributed to CJR-X activities and been clinically involved in the care of CJR-X beneficiaries during the same performance year for which the CJR-X participant accrued the internal cost savings or earned the reconciliation payment amount or repayment amount that comprises the gainsharing payment or the alignment payment. A non-exhaustive list of examples where a PGP, NPPGP, or TGP might have been clinically involved in the care of CJR-X beneficiaries includes—

(1) Providing care coordination services to CJR-X beneficiaries during or after inpatient admission;

(2) Engaging with a CJR-X participant in care redesign strategies, and performing a role in implementing such strategies, that are designed to improve the quality of care for episodes and reduce episode spending; or

(3) In coordination with other providers and suppliers (such as PGP members, NPPGP members, or TGP members the CJR-X participant; and post-acute care providers), implementing strategies designed to address and manage the comorbidities of CJR-X beneficiaries.

(iv) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment, a CJR-X collaborator that is an ACO must meet the following criteria:

(A) The ACO must have had an ACO provider/supplier that directly furnished, or an ACO participant that billed for, an item or service that was rendered to a CJR-X beneficiary during an episode that was attributed to the same performance year for which the CJR-X participant accrued the internal cost savings or earned the reconciliation payment amount or repayment amount that comprises the gainsharing payment or the alignment payment; and

(B) The ACO must have contributed to CJR-X activities and been clinically involved in the care of CJR-X beneficiaries during the performance year for which the CJR-X participant accrued the internal cost savings or earned the reconciliation payment amount or repayment amount that comprises the gainsharing payment or the alignment payment. A non-exhaustive list of ways in which an ACO might have been clinically involved in the care of CJR-X beneficiaries could include—

(1) Providing care coordination services to CJR-X beneficiaries during or after inpatient admission;

(2) Engaging with a CJR-X participant in care redesign strategies and performing a role in implementing such strategies that are designed to improve the quality of care and reduce spending for episodes; or

(3) In coordination with providers and suppliers (such as ACO participants, ACO providers/suppliers, the CJR-X participant, and post-acute care providers), implementing strategies designed to address and manage the comorbidities of CJR-X beneficiaries.

(3) The methodology for accruing, calculating, and verifying internal cost savings will be determined by the CJR-X participant. The methodology—

(i) Must be transparent, measurable, and verifiable in accordance with generally accepted accounting principles (GAAP) and Government Auditing Standards (The Yellow Book).

(ii) Used to calculate internal cost savings that reflect the actual, internal cost savings achieved by the CJR-X participant through the documented implementation of CJR-X activities identified by the CJR-X participant and must exclude—

(A) Any savings realized by any individual or entity that is not the CJR-X participant; and

(B) “Paper” savings from accounting conventions or past investment in fixed costs.

(4) The amount of any gainsharing payments must be determined in accordance with a methodology that is based solely on quality of care and the provision of CJR-X activities. The methodology may take into account the amount of CJR-X activities provided by a CJR-X collaborator relative to other CJR-X collaborators.

(5) For a performance year, the aggregate amount of all gainsharing payments that are derived from reconciliation payment amounts must not exceed the amount of that year's reconciliation payment amount.

(6) No entity or individual, whether a party to a sharing arrangement or not, may condition the opportunity to make or receive gainsharing payments or to make or receive alignment payments directly or indirectly on the volume or value of past or anticipated referrals or business otherwise generated by, between or among the CJR-X participant, any CJR-X collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a CJR-X participant, CJR-X collaborator, collaboration agent, or downstream collaboration agent.

(7) A CJR-X participant must not make a gainsharing payment to a CJR-X collaborator if CMS has notified the CJR-X participant that such CJR-X collaborator is subject to any action by CMS, HHS or any other governmental entity, or its designees, for noncompliance with this part or the fraud and abuse laws, for the provision of substandard care to CJR-X beneficiaries or other integrity problems, or for any other program integrity problems or noncompliance with any other laws or regulations.

(8) The sharing arrangement must require the CJR-X participant to recoup any gainsharing payment that contained funds derived from a CMS overpayment on a reconciliation payment amount or was based on the submission of false or fraudulent data.

(9) Alignment payments from a CJR-X collaborator to a CJR-X participant may be made at any interval that is agreed upon by both parties, and must not be—

(i) Issued, distributed, or paid prior to the calculation by CMS of a repayment amount;

(ii) Loans, advance payments, or payments for referrals or other business; or

(iii) Assessed by a CJR-X participant in the absence of a repayment amount.

(10) The CJR-X participant must not receive any amounts under a sharing arrangement from a CJR-X collaborator that are not alignment payments.

(11) For a performance year, the aggregate amount of all alignment payments received by the CJR-X participant must not exceed 50 percent of the CJR-X participant's repayment amount.

(12) The aggregate amount of all alignment payments from a CJR-X collaborator to the CJR-X participant may not be greater than with respect to a CJR-X collaborator—

(i) Other than an ACO, 25 percent of the CJR-X participant's repayment amount; or

(ii) That is an ACO, 50 percent of the CJR-X participant's repayment amount.

(13) The amount of any alignment payments must be determined in accordance with a methodology that does not directly account for the volume or value of past or anticipated referrals or business otherwise generated by, between or among the CJR-X participant, any CJR-X collaborator, any collaboration agent, any downstream collaboration agent, or any individual or entity affiliated with a CJR-X participant, CJR-X collaborator, collaboration agent, or downstream collaboration agent.

(14) All gainsharing payments and any alignment payments must be administered by the CJR-X participant in accordance with generally accepted accounting principles (GAAP) and Government Auditing Standards (The Yellow Book).

(15) All gainsharing payments and alignment payments must be made by check, electronic funds transfer, or another traceable cash transaction.

(d) Documentation requirements.

(1) CJR-X participants must—

(i) Document the sharing arrangement contemporaneously with the establishment of the arrangement;

(ii) Post (and update on at least a quarterly basis) on a publicly available web page on the CJR-X participant's website the following:

(A) Accurate lists of all current CJR-X collaborators, including the CJR-X collaborators' names and addresses as well as accurate historical lists of all CJR-X collaborators.

(B) Written policies for selecting individuals and entities to be CJR-X collaborators as required by § 512.670(a)(3).

(iii) Maintain, and require each CJR-X collaborator to maintain, contemporaneous documentation with respect to the payment or receipt of any gainsharing payment or alignment payment that includes all of the following, at a minimum:

(A) Nature of the payment (gainsharing payment or alignment payment).

(B) Identity of the parties making and receiving the payment.

(D) Amount of the payment.

(E) Date and amount of any recoupment of all or a portion of a CJR-X collaborator's gainsharing payment.

(F) Explanation for each recoupment, such as whether the CJR-X collaborator received a gainsharing payment that contained funds derived from a CMS overpayment of a reconciliation payment or was based on the submission of false or fraudulent data.

(2) The CJR-X participant must keep records of all of the following:

(i) A process for determining and verifying its potential and current CJR-X collaborators' eligibility to participate in Medicare.

(ii) A plan to track internal cost savings.

(iii) Information on the accounting systems used to track internal cost savings.

(iv) A description of current health information technology, including systems to track reconciliation payment amounts, repayment amounts, and internal cost savings.

(v) A plan to track gainsharing payments and alignment payments.

(3) The CJR-X participant must retain and provide access to, and require each CJR-X collaborator to retain and provide access to, the required documentation in accordance with § 512.135.