KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Health Law’s Boost For ACOs Gains Momentum But Faces Possible Legal Hurdles

News outlets report on possible obstacles to the formation of accountable care organizations - hospitals and physicians working together to improve the quality of patient care while controlling costs. 

California Healthline: "Health care providers are rushing to create new structures that could eventually qualify as ACOs, putting them in line for added reimbursements under health reform. But are these actually ACOs? Federal agencies haven't finished defining the model, and regulators have yet to bless these new alliances. As a result, there's another word that could describe some would-be ACOs: illegal. If providers aren't careful, their new networks may violate current laws restricting provider competition."

"Through the [new health law's] Shared Savings Program, Medicare will reward ACOs for reducing total cost of care for an assigned population of patients. ... stakeholders [are] grappling with significant legal concerns. How will regulators interpret physician payments given anti-kickback statutes? Will these new ACOs violate existing anti-trust rules? And what will ACOs look like in California, given corporate practice of medicine laws that prevent hospitals from directly employing physicians?" Next week, the FTC, CMS and the HHS Office of Inspector General "will host an all-day open workshop designed to foster conversation and address potential changes to ease ACO development under current law" (Diamond, 9/29). 

Becker's Hospital Review: Meanwhile, "[i]n a letter to CMS, America's Health Insurance Plans, the insurers' trade group, is cautioning federal regulators against loosening antitrust and fraud regulations to accommodate accountable care organizations. ... Commenting on the need for antitrust enforcement, AHIP warned ACOs won't provide benefits to consumers 'if they are mere vehicles for price fixing or aggregating market power.' ... AHIP said federal agencies 'must continue their longstanding efforts, under [fraud] laws, to preserve the professional independence of health care providers and protect patients from improper relationships that may lead to inappropriate treatment or other potential harms'" (Page, 9/29).

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