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Could Health Plans Derail ACOs?

Jeff Elliott, for HealthLeaders Media, October 27, 2010

AHIP is calling attention to anything and everything that could potentially run afoul of antitrust laws such as prohibitions against physician self-referrals, anti-kickback statutes and civil monetary penalty laws. And it appears the group has some unlikely allies in smaller physician groups who could be left out of the ACO mix as well as consumer advocates who fear that powerful ACOs could limit choices and raise costs.

At the moment, the health insurance industry is being diplomatic saying that it supports the ACO concept as a way to "improve quality and reduce costs for consumers and payers alike," provided regulators allow the exploration and formation of a wide range of structural models. It's even shown willingness to go so far as supporting special "narrowly tailored" exceptions such as safe harbors, waivers, or advisory opinions that would allow beneficial ACOs to skate through antitrust regulations.

But if a health insurance industry that's already irritated by ACA pressures gets even a whiff of impropriety by ACOs, expect it to recall attention to stiff price fixing and collusion laws that have brought down many greats (think Kodak and AT&T).

The ACO has a place in healthcare's future if there is a balance in power between providers and payers. Let's just hope federal regulators can get this tricky issue right.

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3 comments on "Could Health Plans Derail ACOs?"


J. Kuriyan (10/28/2010 at 9:58 AM)
ACOs are nothing more than the PHOs & IDSs of the 90's - an Avatar of a system that failed for many reasons. There are new lawyers and young Professors promoting the concept. We must be aware of the history or .... None of the reasons for failure have been corrected. Why should it succeed now? As for Direct contracting, except in some very closed communities dominated by one provider network, employers rejected the notion in no uncertain terms. Employees wanted the privilege to access any and all providers - and employers didn't see any reason for denying them. Meg Whitman-borrowed Gov. Schwarzenegger's definition of insanity applies here - "doing the same thing over & over, hoping the results will be different this time."

Mike D'Eramo (10/28/2010 at 8:27 AM)
The ACO does provide a means for the consumer to be reengaged into the health financing process. We have allowed the modern health plan to evolve into a non-value added third party that does not benefit patient, provider, or employer. However, the employer/patient dyad must ensure that providers are fully disclosing quality and cost data as part of their access process.

Kevin Lieb (10/27/2010 at 2:59 PM)
ACO's, if done right and as they mature, could eliminate the need for Health Insurance. The doctor is absolutely correct. In theory, you buy insurance to cover risk whether its for your car/home/or health. But if that risk is now pushed to the doctors, via capitation, why do you need an insurance company? They're just skimming off a percentage of revenue for little to no added value. If I ran an ACO and felt that I could take on risk I would go directly to the employers in my town/county and eliminate the middle man - insurance companies. Direct contracting makes much more sense that our healthcare insurance system.