Doctors and hospitals eager to pursue a new model of health carebeing promoted by the Obama administration are raising concerns thatthey could run afoul of antitrust and anti-fraud laws, and insurersare warning that the new arrangements could lead to higher pricesfor medical care.
The differences will be hashed out Tuesday, when hundreds ofhealth-care representatives are to attend a meeting with federalofficials in Baltimore. The session is being conducted by theFederal Trade Commission, the Centers for Medicare and MedicaidServices and the Office of the Inspector General of the Health andHuman Services Department.
A key part of the health overhaul law encourages the developmentof accountable care organizations (ACOs) which would allow doctorsto team up with one another and with hospitals in new ways toprovide medical services. Health-care providers want to make surethat their ACOs won't be accused of stifling competition or tryingto fix prices when they bargain with insurance companies. Insurers,meanwhile, are expressing concern that providers could use theleverage of the organizations to demand higher prices.
Whether ACOs, which are just a concept, can be made to work mightdetermine whether the health-care law succeeds in lowering costs andimproving care for consumers. As envisioned by the law, theorganizations would be paid to cover costs for Medicarebeneficiaries in a given area and get financial rewards if they meetquality and cost-saving targets.
The federal health program for the elderly and disabled is tostart trying out ACOs in 2012, and some providers are scrambling tofigure out how to apply the idea to privately insured patients aswell. The antitrust rules mostly concern the private insurancemarket; in Medicare, the government sets the payment rates.
Today, most hospitals and doctors work independently of oneanother, which experts say tends to drive up costs and hurt quality.
'ACOs could transform the way care is delivered and financed, andwe want the government agencies to take a fresh look at howantitrust and antifraud laws apply,' said Chet Speed, vice presidentof policy at the American Medical Group Association, whichrepresents large physician groups. 'This open dialogue could be thefirst step to overcoming these legal obstacles.'
The new ACOs could mimic, for example, the tightly integratedMayo Clinic, though other variations will probably be tried.
In the lead-up to the meeting, the hospitals and doctor groupsasked regulators for clear, 'user-friendly' guidance to make surethey do not violate federal laws in forming ACOs. Speed said hismembers do not want to spend $1 million to form an ACO withoutknowing whether it will be demed legal.
But America's Health Insurance Plans, the insurers' trade group,warned government officials against being too accommodating. It saidin a recent letter that ACOs will not help consumers 'if they aremere vehicles for price fixing.'
Cory Capps, an economist at Bates White Economic Consulting, saidthat 'we could end up in the worst world,' in which the delivery ofcare is not made more efficient but providers accumulate 'greaterpricing power.'
A few health-care systems around the country are alreadyembracing the notion of ACOs and are developing them for theirprivate insurance business.
In February, two competing hospitals in Omaha, the NebraskaMedical Center and Methodist Health System, announced they wouldform the Accountable Care Alliance to reduce duplication ofservices, limit unnecessary tests and increase communication betweendoctors and hospitals. Rita Potter, who is on the board of thealliance, says officials realize there's a risk in going ahead sosoon, but concluded that 'we just couldn't wait.'
Kaiser is an editorially independent news service and a programof the Kaiser Family Foundation, a nonpartisan health-care policyorganization that is not affiliated with Kaiser Permanente.
