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Aetna, Carilion Clinic Building ACO in VA

John Commins, for HealthLeaders Media, March 11, 2011

Carilion Clinic will continue to offer Medicare Advantage products and will buy administrative services through Hartford, CT-based Aetna to lower administrative costs. Aetna will become the administrator of Carilion's health benefits plan for its employees.

"Carilion Clinic would be the ACO, but the ACO needs a contracting vehicle and an insurance payment vehicle and that would be Aetna," Murphy says. "You will see co-branded insurance products with Aetna so we can bring insurance product to commercial market here that would carry Aetna's name and Carilion's name."

Murphy says Aetna would likely "begin taking over the back room management" for Medicare Advantage next month, and begin an open enrollment on July 1 for Carilion's 17,000 or so employees and dependents. Phase in for the commercial market and Medicaid are targeted for completion by the end of the year.

Charles Saunders, MD, president of Strategic Diversification at Aetna, said in a statement that the "collaboration is designed to bring new models of healthcare delivery, advanced technology and payment reform to the market that creates improvements in both quality and affordability of care. By bringing the best capabilities of each organization and aligning incentives across all stakeholders, we can create real value."

ACOs are a high priority for healthcare leaders. Seventy-four percent of hospital chief executives surveyed for the HealthLeaders Media Industry Survey 2011said they either already have the components in place to be considered an accountable care organization or that they will within the next five years.

Carilion's ACO features an integrated electronic medical record to support information sharing and a network of primary care physicians, specialists, hospitals and outpatient facilities.Aetna members using Carilion can access Aetna's online resources including pricing and quality, and wellness tools

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1 comments on "Aetna, Carilion Clinic Building ACO in VA"


bob sigmond (3/11/2011 at 2:38 PM)
My suggestion is that the two parties go much further to global payment. This would involve three feasible additional steps: [1] develop a common vision and strategic plan as the basis for a collaborative annual budget which provides Carillon Clinic all the money required to carry out the collaborative strategic plan each year and also reflects collaborative cost containment initiatives that enables Aetna to market very competitive Carillon benefit packages. Next, [2] Carillon contracts out to Aetna all of the responsibility for billing and collections from other third party payers, government, individual uninsured patients, etc. Next, [3] Aetna takes over Carillon billing and collection staff and sends a single monthly check to Carillon for the entire monthly amount of income in the collaboratively developed Carillon budget, eliminating the necessity to pay Carillon for specific services to individual patients. This guarantees Carillon of complete financial stability, while eliminating any Carillon responsibility for billing and collection. Of course, both parties will be monitoring conformance with the budget month to month, with necessary adjustments when the budget projections turn out to be unrealistic, and setting out procedures for distributing any surpluses or deficits at the end of the budget year. Also, the contract between Carillon and Etna would include effective processes for resolving any differences between the two parties and must also include provision for resolving any difference about budget making and management as well as in distributing any surpluses or deficits., etc. To the extent that Etna would market comprehensive benefits, billing activity would be eliminated, with great cost savings. Conflicts about individual patient utilization would be replaced by collaborative initiatives relating to classes of patients and classes of conditions, with much more effective outcomes. With this approach, you will be the leaders in the new direction that will become the standard in a few years. For more details, call me at 215-561-5730. Right on! Bob