Health Plan, Provider Partnerships May Trump ACOs

Margaret Dick Tocknell, May 2, 2011

With more than four million Medicare fee-for-service beneficiaries expected to receive medical care through accountable care organizations beginning in 2012, hospitals and physicians are aligning to provide the coordinated care that could eventually entitle them to federal financial incentives.

A briefing paper from the actuarial and consulting firm Milliman, however, suggests that becoming an integrated delivery system, partnering with a health plan and focusing on the Medicare Advantage market may make more sense.

"I always advise my clients not to take risk for things they can't control," explains Rob Parke, Milliman's lead researcher on the project. ACOs, he says, as designed by the Center for Medicaid & Medicare Services, carry significant financial risk because CMS will share only aggregate data about beneficiaries. An ACO can request individual data, but the patient can decide not to allow CMS to release the information. "Providers could be financially responsible in terms of incentives for a patient they know nothing about."

Parke suggests that the system CMS will use to benchmark quality and performance standards will favor inefficient ACOs because the improvement bar will be set lower. "If you have been doing well you will have to work much harder to show improve than someone who hasn't been doing quite as well."

Margaret Dick Tocknell Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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