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The Impact of ACOs on Our Health System

by Jamaal R. Jones on Categories: health law

The Impact of ACOs on Our Health System
Healthcare providers are seeing sweeping changes in the way they administer care to patients as a result of the emergence of accountable care organizations. The Obama administration sought to reform the existing healthcare model with the passage of the Patient Protection and Affordable Care Act (“PPACA”). The hope was that it would become a viable and accountable system for delivering accessible and affordable healthcare. Accountable care organizations (ACOs) hope to achieve that by reinventing the way healthcare providers associate, treat patients, and receive compensation.

An ACO is comprised of a group of providers who organize themselves to take on the shared responsibility of administering care to a group of patients while seeking to improve quality of care, lowering of healthcare costs, and increased access to care. ACO providers are reimbursed by federally funded welfare programs, such as Medicare.

ACOs provide certain regulatory advantages to participating providers. The Federal Self Referral law — commonly known as the “Stark law” generally waives prohibition for distribution of shared savings for ACO participants, and for providers’ activities that are related to the ACO. However, providers are not necessarily immune from anti-kickback law violations as participants in an ACO.

Under an ACO, provider members are generally to be reimbursed based on the quality of care they provide their patients. ACOs’ shared savings may be shared annually as a bonus, so long as they meet the requirements in the quality metrics. Providers are to be reimbursed according to the following quality metrics: (1) patient satisfaction; (2) safety; (3) preventative treatment; (4) care coordination; (5) at-risk population. Providers working with the elderly for example, will not be penalized because they treat patients with more advanced conditions.

Providers will be impacted by the development of ACOs throughout the country. On January 1, 2013, the Medicare bundled payment program will begin and the increased Medicaid payments for primary care doctors will take effect. Under the ACO model, providers are incentivized to work together. Earlier coordinating from initial doctor’s offices visits to long-term care facilities may become the norm. Additionally, there is hope that because ACOs may largely be run by groups of providers, the cost-quality communications gap between providers and the boardroom may finally be bridged.

There are, however, downsides for providers participating in ACOs. Transitioning from a solely fee-for-service model to quality-based reimbursement may be difficult for some providers. Providers in private practice will face financial pressure due to increased overhead and a decrease in reimbursement. Additionally, providers may also experience an increase in regulatory restrictions. Further, over the years, providers will see varying reimbursements because ACOs are still in their infancy. The Secretary of Health and Human Services wields much discretion in how the providers will be reimbursed over time. The change in reimbursement may take away some of the control providers have over how they are paid.

The ACO model is not without controversy. Some providers may argue that it is not always in their power to control quality measures leading to re-admissions because patients often misunderstand directions, fail to take medications, don’t seek physical therapy, etc. Further, some may argue that ACOs may contribute to fewer providers choosing areas of practice like primary care; provider shortages and mis-distribution; and changing workplace and lifestyle expectations.

Whatever one’s view of ACOs and their coming impact, providers will likely limit the number of tests they order from specialists that are costly and instead may be incentivized to come up with other solutions to reduce over utilization and overuse of expensive technology that contributes to significant healthcare expense because such tests and technologies are so interconnected with their reimbursement. Further, providers may use more holistic approaches to diagnosing and treating patients at the primary care level. Recent graduates might find this difficult, because many medical schools heavily rely on the use of technology and testing in order to diagnose and treat patients.

In summary, as with every major market sea-change, providers will need to educate themselves about ACOs and the changes they will bring, in order to keep their seat at the negotiating table. ACO membership is growing in size, and the number of ACOs in Florida is increasing. Providers need to carefully consider what ACOs will mean for their practices, for the treatment they administer, and the reimbursement they will receive for services rendered.

By Jamaal R. Jones
Zumpano, Patricios & Winker P.A.
312 Minorca Ave.
Coral Gables, FL 33134

South Florida Legal Guide 2013 Edition

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