(a) General. (1) The IOTA participant—

(i) May enter into a sharing arrangement with an IOTA collaborator to make a gainsharing payment, or to receive an alignment payment, or both; and

(ii) Must not make a gainsharing payment or receive an alignment payment 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) The IOTA participant must develop, maintain, and use a set of written policies for selecting providers and suppliers to be IOTA collaborators.

(i) The selection criteria must include the quality of care delivered by the potential IOTA collaborator.

(ii) The selection criteria cannot be based directly or indirectly on the volume or value of referrals or business otherwise generated by, between or among any of the following:

(A) The IOTA participant.

(B) Any IOTA collaborator.

(C) Any collaboration agent.

(D) Any individual or entity affiliated with an IOTA participant, IOTA collaborator, or collaboration agent.

(iii) The written policies must contain criteria related to, and inclusive of, the anticipated contribution to performance across the achievement domain, efficiency domain, and quality domain by the potential IOTA collaborator.

(4) The board or other governing body of the IOTA participant must have responsibility for overseeing the IOTA participant's participation in the IOTA Model, including but not limited to all of the following:

(i) Arrangements with IOTA collaborators.

(ii) Payment of gainsharing payments.

(iii) Receipt of alignment payments.

(iv) Use of beneficiary incentives in the IOTA Model.

(5) If an IOTA participant enters into a sharing arrangement, its compliance program must include oversight of sharing arrangements and compliance with the applicable requirements of the IOTA Model.

(b) Requirements. (1) A sharing arrangement must be—

(i) In writing;

(ii) Signed by the parties; and

(iii) Entered into before care is furnished to an attributed patient during the PY under the sharing arrangement.

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

(3) Participation in the sharing arrangement must require the IOTA collaborator to comply with the requirements of this model, as those pertain to their actions and obligations.

(4) The sharing arrangement—

(i) Must set out the mutually agreeable terms for the financial arrangement between the parties to guide and reward model care redesign for future performance across the achievement domain, efficiency domain, and quality domain;

(ii) Must not reflect the results of model PYs that have already occurred; and

(iii) Where the financial outcome of the sharing arrangement terms are known before signing.

(5) The sharing arrangement must require the IOTA collaborator and its employees, contractors (including collaboration agents), and subcontractors to comply with all of the following:

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

(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.

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

(7) The sharing arrangement must not pose a risk to beneficiary access, beneficiary freedom of choice, or quality of care.

(8) The written agreement memorializing a sharing arrangement must specify all of the following:

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

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

(iii) The date of the sharing arrangement.

(iv) Management and staffing information, including type of personnel or contractors that would be primarily responsible for carrying out IOTA activities.

(v) The financial or economic terms for payment, including all of the following:

(A) Eligibility criteria for a gainsharing payment.

(B) Eligibility criteria for an alignment payment.

(C) Frequency of gainsharing or alignment payment.

(D) Methodology and accounting formula for determining the amount of a gainsharing payment that is substantially based on performance across the achievement domain, efficiency domain and quality domain, and the provision of IOTA activities.

(E) Methodology and accounting formula for determining the amount of an alignment payment.

(9) The sharing arrangement must not—

(i) Induce—

(A) The IOTA participant;

(B) The IOTA collaborator; or

(C) Any employees, contractors, or subcontractors of the IOTA participant or IOTA collaborator to reduce or limit medically necessary services to any attributed patient; or

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

(c) Gainsharing payments and alignment payments. (1) Gainsharing payments, if any, must meet all of the following:

(i) Be derived solely from upside risk payments.

(ii) Be distributed on an annual basis (not more than once per performance year).

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

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

(2) To be eligible to receive a gainsharing payment an IOTA collaborator must contribute to performance across the achievement domain, efficiency domain or quality domain for the PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment. The contribution to performance across the achievement domain, efficiency domain, or quality domain criteria must be established by the IOTA participant and directly related to the care of attributed patients.

(3) To be eligible to receive a gainsharing payment, or to be required to make an alignment payment:

(i) An IOTA collaborator other than PGP, NPPGP, or TGP must have directly furnished a billable item or service to an attributed patient that occurred in the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment or incurred a downside risk payment.

(ii) An IOTA 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 an attributed patient that occurred during the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment or incurred a downside risk payment.

(B) The PGP, NPPGP, or TGP must have contributed to IOTA activities and been clinically involved in the care of attributed patients during the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment or incurred a downside risk payment.

(4) The total amount of a gainsharing payment for a PY paid to an IOTA collaborator that is a physician or nonphysician practitioner must not exceed 50 percent of the Medicare-approved amounts under the PFS for items and services billed by that physician or nonphysician practitioner to the IOTA participant's attributed patients during the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment being made.

(5) The total amount of a gainsharing payment for a PY paid to an IOTA collaborator that is a PGP, NPPGP, or TGP must not exceed 50 percent of the Medicare-approved amounts under the PFS for items and services billed by that PGP, NPPGP, or TGP and furnished to the IOTA participant's attributed patients by the PGP members, NPPGP members, or TGP members respectively during the same PY for which the IOTA participant earned the upside risk payment that comprises the gainsharing payment being made.

(6) The amount of any gainsharing payments must be determined in accordance with a methodology that is substantially based on contribution to the performance across the achievement domain, efficiency domain or quality domain and the provision of IOTA activities. The methodology may take into account the amount of such IOTA activities provided by an IOTA collaborator relative to other IOTA collaborators.

(7) For a PY, the aggregate amount of all gainsharing payments that are derived from the upside risk payment the IOTA participant receives from CMS must not exceed the amount of that upside risk payment.

(8) 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 referrals or business otherwise generated by, between or among the IOTA participant, any IOTA collaborator, any collaboration agent, or any individual or entity affiliated with an IOTA participant, IOTA collaborator, or collaboration agent.

(9) An IOTA participant must not make a gainsharing payment to an IOTA collaborator that is subject to any action for noncompliance with this part, or the fraud and abuse laws, or for the provision of substandard care to attributed patients or other integrity problems.

(10) The sharing arrangement must require the IOTA participant to recoup any gainsharing payment that contained funds derived from a CMS overpayment on an upside risk payment or was based on the submission of false or fraudulent data.

(11) Alignment payments from an IOTA collaborator to an IOTA 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 payment amount reflected in the notification of the downside risk payment;

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

(iii) Assessed by an IOTA participant if the IOTA participant does not owe a downside risk payment.

(12) The IOTA participant must not receive any amounts under a sharing arrangement from an IOTA collaborator that are not alignment payments.

(13) For a PY, the aggregate amount of all alignment payments received by the IOTA participant must not exceed 50 percent of the IOTA participant's downside risk payment amount.

(14) The aggregate amount of all alignment payments from a single IOTA collaborator to the IOTA participant may not be greater than 25 percent of the IOTA participant's downside risk payment over the course of a single PY for an IOTA collaborator.

(15) 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 referrals or business otherwise generated by, between or among the IOTA participant, any IOTA collaborator, any collaboration agent, or any individual or entity affiliated with an IOTA participant, IOTA collaborator, or collaboration agent.

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

(17) All gainsharing payments and alignment payments must be made by check, EFT, or another traceable cash transaction.

(d) Documentation requirements. (1) The IOTA participant must do all of the following:

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

(ii) Maintain accurate current and historical lists of all IOTA collaborators, including IOTA collaborator names and addresses. With respect to these lists the IOTA participant must—

(A) Update such lists on at least a quarterly basis; and

(B) On a web page on the IOTA participant's website, the IOTA participant must—

(1) Publicly report the current and historical lists of IOTA collaborators; and

(2) Include any written policies for selecting individuals and entities to be IOTA collaborators required by the IOTA participant.

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

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

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

(C) Date of the payment.

(D) Amount of the payment.

(E) Date and amount of any recoupment of all or a portion of an IOTA collaborator's gainsharing payment.

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

(2) The IOTA participant must keep records of all of the following:

(i) Its process for determining and verifying its potential and current IOTA collaborators' eligibility to participate in Medicare.

(ii) A description of current health information technology, including systems to track upside risk payments and downside risk payments.

(iii) Its plan to track gainsharing payments and alignment payments.

(3) The IOTA participant must retain and provide access to, and must require each IOTA collaborator to retain and provide access to, the required documentation in accordance with §§ 512.460 and 1001.952(ii).