ACO Rule under Reform Aims to Increase Cooperation among Providers, Hospitals

No April Foolery here. The time has come: HHS has finally issued longstanding rules as part of reform with regard to accountable care organizations. ACOs are nothing new, of course; but the federal government is betting that greater incentives for increased numbers of physicians to become a part of the process in their health systems is a novel — if not slightly controversial — part of healthcare reform.

Calling the fed govt a “bystander” in the process by which health systems have previously dealt with the quality sector in healthcare delivery, Secretary Kathleen Sebelius figures the time is right for government intervention, noting the move could save almost $1B costs to taxpayers over three years upon program’s inception next year. Providers who are ready to take the “quality plunge” will have to have the beneficiary number to back that up — with the requirement of serving at least 5000 patients under Medicare.

Quality incentives will outweigh penalties and losses for the completely voluntary participation of health organizations (among other things, the lack of compulsory participation for orgs has left many lawmakers somewhat muted on the issue as chief mode of criticism in the overall debate on reform).To sweeten the pot for participation, though, the government will offer two tiers of oversight: one under which orgs would be at risk for losses only in the third year and another in which they’d be at risk for losses in all three years but would also get to keep more of the rewards.

Detractors say the downside to health org participation is not benign — citing market price fixing and even antitrust concerns among hospital-centered systems. But there is a glimmer of hope for the implementation of such a program — apparent building of bipartisan support. There are aspects of this rule that benefit both sides. Given the earnest attempt at cost-savings ($960M over 3 years) and the use of incentivization for participating systems, healthcare policy watchers could be observing a crafty provision of reform at work that just may show results. | LINK