A Murky Future for Accountable Care Organizations

A must read on Accountable Care Organizations (ACOs). Maybe the feds should have read the Anti-Trust legislation before they proposed organizational structures that are illegal. Thanks, Bill.

http://blog.cardiosource.org/post/A-Murky-Future-for-Accountable-Care-Organizations.aspx

American College of Cardiology Blog

A Murky Future for Accountable Care Organizations

by Jack Lewin March 22, 2011 08:00

The ACO concept — while arguably still pretty foggy — is certainly attracting a lot of attention in the health sector.  But, are ACOs going to eat up the non-integrated private sector?  Certainly not imminently.  But the ACO concept is worth some serious consideration by the profession. The ACC is certainly going to explore how the concept might be beneficial to some members and patient populations. There is potential here — maybe.

Assuming the Affordable Care Act prevails in its legal challenges (and if it somehow does not, something similar to it needs to be created post haste to deal with the rising numbers of uninsured persons and costs of US health care), ACOs represent are a major element of the law, and the Secretary of Health and Human Services will have broad authority to provide financial incentives for them. Money is promised to flow here.

In fact, ACOs have become central to current thinking about how American health care might find ways to bend the cost curve and better organize health care. Huge conferences occur every week in DC it seems on what ACOs might be and how to build one. The idea is to bring doctors, hospitals, and health plans and Medicare (and Medicaid) together in ways that would hopefully streamline health care, improve patient health status and outcomes, reduce variation in care, and lower costs. Sounds like a fairy tale, doesn’t it? But, hospitals are wildly buying up physician practices to be ready to create ACOs. Health plans, particularly United and CIGNA, have already started buying up medical groups to build ACO networks and pilots — health plans do NOT want to see hospitals predominate in this proposed transition of the delivery system. Even many physician IPAs and medical groups in California, Colorado, and elsewhere are similarly gearing up. All are hoping to land CMS “innovation center” grants.  ACO policy wonks and consultants are multiplying and are in evidence everywhere one looks.

This frenetic activity is all certain to keep churning along, driven by market forces, even if the ACA controversy drags on through next year. However, the ACA directs the Secretary of HHS and CMS to publish regulations on how ACOs will be structured and financed. The big question is — where are the proposed regulations from CMS?  The ACO regulations were promised in January, then February, and now it’s mid-March. Whassup? 

Rumors are that the regs have gotten hung up over anti-trust concerns with DOJ and the FTC (Federal Trade Commission). Since ACOs will likely only be effective if they can bring physicians, hospitals, and health plans together to cover a large population and geography, issues around market dominance and anti-trust develop.  One of the ridiculous aspects of current US anti-trust policy that health plans are exempted from most market domination provisions. Hospitals and doctors are not. The Secretary supposedly has authority in the Affordable Care Act (ACA) to waive some anti-trust concerns for ACOs, and this is likely to be challenged by the FTC and the current Congress. So, the regs are in limbo. But that’s not stopping the action sans ‘regs.

Modern Health Care this week carried a story on an anti-trust debacle developing in Nevada as an ACO there tries to take shape. The Nevada attorney general’s office and the FTC have launched an inquiry into a patient-care collaboration between Reno-based Renown Health and a local cardiology practice, Sierra Nevada Cardiology Associates. The alliance was the first step in forming an accountable care organization for the two organizations. 

“Their interest is not unexpected given the size of the transaction, and we’ve met and are cooperating and providing requested information,” said Terri Hendry, Renown’s spokeswoman, said in the article. “We are confident that this change is in the best interest of consumers and will result in improved coordination of heart services in the region.” The ACC is monitoring this process and the entire process of the amazingly rapid changes occurring in the US health care delivery system around integration, physician employment, population based health systems, and payment reforms. Whew. A lot is happening, folks, despite what Congress thinks they can control.