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13 Hot ACO Buzzwords All Providers Should Know

Cheryl Clark, for HealthLeaders Media, April 6, 2011

3. Primary Service Area or PSA. This is defined as "the lowest number of contiguous postal zip codes from which the [ACO participant] draws at least 75 percent of its [patients]" for that service.

4. Retrospective Assignment. To eliminate the possibility that an ACO would pick the healthiest, easiest-to-manage patients, groups of 5,000 beneficiaries would be retrospectively assigned to each ACO by CMS. Here's CMS' explanation from page 114 of the regulations:

"One reason for this is that we believe that the ACO should be evaluated on the quality and cost of care furnished to those beneficiaries who actually choose to receive care from ACO participants during the course each performance year. Another reason for retrospective assignment is to encourage the ACO to redesign its care processes for all Medicare FFS beneficiaries, not just for the subset of beneficiaries upon whom the ACO is being evaluated."

5. Procompetitive. ACOs that are procompetitive are likely to be approved and not endure any further scrutiny from the DoJ or the FTC. Likewise, anticompetitive ACOS will not be approved, or will subsequently face review.

6.  Rule of Reason. The guidelines that the DoJ and the FTC will use to ensure procompetitiveness. In its statement of Antitrust enforcement policy, the DoJ and the FTC explain that "antitrust laws treat naked price-fixing and market-allocation agreements among competitors as per se illegal.

"Joint price agreements among competing health care providers are evaluated under the rule of reason, however, if the providers are financially or clinically integrated and the agreement is reasonably necessary to accomplish the procompetitive benefits of the integration."

When physician and multiprovider organizations or joint ventures "have agreed to share substantial financial risk as defined in the Health Care Statements, their risk-sharing arrangement generally establishes both an overall efficiency goal for the venture and the incentives for the participants to meet that goal. Accordingly, the setting of price is integral to the venture's use of such an arrangement and therefore warrants evaluation under the rule of reason."

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