By Rupasri S. Lloyd
The virtual group option under the Merit-based Incentive PaymentSystem (MIPS) has been toutedby the Centers for Medicare & Medicaid Services (CMS) as an opportunity to enable solo and smaller provider groups to participate in incentive programs for which they would not otherwise be eligible. The concept behind CMS allowing for participation through virtual groups is that when a solo or small provider group does not have enough volume to be reliably measured on their own, they are permitted to virtually combine with other provider or small groups to increase their performance volume. A larger patient volume, CMS claims, is needed for the group to be reliably measured, share resources and best practices, and optimize participation to increase their MIPS performance scores and related payment adjustments.
At first glance, participation appears to be a necessary step, if solo and smaller provider groups wish to remain competitive with larger organizations and receive the incentives for which they are eligible through MIPS. However, delving deeper into the practical aspects and legal requirements of actually forming and participating in one of these virtual groups raises many questions and associated legal considerations that leave providers wary of whether the risks and uncertainty outweigh the potential benefits of forming a virtual group. Many providers fear that by joining a virtual group they may be inadvertently opening themselves up to potentially costly legal liabilities.
To help providers navigate the process to form and participate in MIPS through these virtual groups, CMS came out with toolkits for 2018 and 2019. While these resources offer helpful guidance, providers are advised to proceed cautiously. The template agreement that is part of this toolkit is barebones and does not fully address all required elements of a formal written agreement between each solo provider and group that composes a virtual group. Providers need to make sure the required elements are covered in the virtual group agreement and are set forth in the agreement in a manner that protects their best interests.
The following is an excerpt of a select few of the required elements in the virtual group agreement:
Note that each of these elements places legally binding responsibilities and obligations on the provider joining the virtual group but, at the same time, offers providers joining the group assurances that others in the group are bound by these terms. The virtual group agreement is the key vehicle through which a provider has some certainty that others in the group can be held accountable if they do not fulfill their contractual promises and work toward optimizing their performance. In addition to meeting the basic elements required by CMS for the formal agreement, providers should consider adding language to require indemnification and a hold harmless by others in the group for any negligence or misconduct.
Sharpening the Tips
There are ancillary interoperability, corporate governance, tax, and professional liability considerations that arise from forming a virtual group that are also not addressed in the toolkit guidance. Examples include the following:
With due diligence and these types of contractual protections in place, providers can take comfort in knowing that some of the risks associated with participating in virtual groups have been proactively mitigated. The virtual group option is not a fit for all solo and group providers, and each provider needs to independently assess the pros and cons based on their specific circumstances.
Virtual groups are an example of an innovative attempt to enable physicians to remain independent but benefit from incentives that are part of a larger organized system of care. Time will tell whether this effort is effective in accomplishing that goal. In the meantime, through the virtual group agreement, providers have the ability to choose with whom they will participate in these programs and contractually define the terms of those relationships with other providers.
In addition, the virtual group agreement can limit the term to a performance period of one year. This gives solo and small group providers the opportunity to test out the pros and cons of participation in the virtual group and, if the initial group presents problems, keep open the option in future years to form a virtual group with other solo or small group providers.
The deadline to form a virtual group for 2019 is fast approaching. A defined election process must be followed and submitted via e-mail to CMS. The period to make this election started in October and ends on December 31, 2018.
*Legal Disclaimer: This article is informational only and should not be construed as formal legal advice or the formation of a lawyer/client relationship.— Rupasri ("Rupa") S. Lloyd is a shareholder with the health law practice of GrayRobinson, PA. As an adjunct professor of law with the Pitt Law Graduate Healthcare Compliance program, she teaches on the topics of patient safety, health care quality, and fraud and abuse.