ACO's: Regulations Cometh

The government came out with its final regulations for ACO’s, or Accountable Care Organizations, all 696 pages of information. As a medical practice manager, my main concern is still “How do I get paid?” The original scheme was a capitation plan, similar to the HMO’s of the 1980’s. In this plan a physician receives a set amount of money to care for the patient, medical care, labs, imaging, etc. If the physician spends less than the insurance company paid him, then the doctor keeps the left-over. If the treatment plan goes over what was paid then the doctor not only is not paid for his treatment, he may owe the insurance carrier. Running the word capitation through the legislation I came across this paragraph.

“Comment: Several comments reflected confusion about the proposed payment model under the Shared Savings Program. For instance, some commenter’s asserted that the program will, in fact, make partial capitation payments, or questioned if providers electing not to participate in the program will continue to receive payment as usual.

Response: We would like to clarify that consistent with section 1899(d)(1)(A)of the Act, fee-for-service providers will continue to receive payments "under the original Medicare fee-for-service program under Parts A and B in the same manner as they would otherwise be made" regardless of whether they participate in the Shared Savings Program. Also, as indicated previously, we do not plan to adopt partial capitation (or other such payment methodologies) at this time, but may do so in the future through appropriate rule-making, depending on lessons learned through demonstrations.”

The reason for ACO’s is to deliver quality healthcare for fewer dollars. It is thought that if the provider is in charge of the money then he will be more judicious on how it is spent. The only problem with this mindset, and why capitation models do not work, is that human beings are not mind readers and all people have different health care needs. A set amount of money per person per year is assuming that the person will not have any life threatening injuries or illnesses. It assumes that diseases that are expensive to treat will not be diagnosed. It assumes that the worst health care issue the individual will encounter is a cold.

Fee for Service plans assumes that each medical patient is unique, that care and treatment will be based on the need of that individual and payments will be made for appropriate services rendered, regardless of cost.

The first paragraph of the 696 page document speaks to new payment methods for Medicare patients. “Value-based purchasing is a concept that links payment directly to the quality of care provided and is a strategy that can help transform the current payment system by rewarding providers for delivering high quality, efficient clinical care.” This is an unneeded process because providers are rewarded right now for delivering high quality, efficient clinical care through the legal system and malpractice suits. If a physician practices poor medicine, then he risks having a malpractice suit brought against him and in some cases, criminal charges. The legal system already has in place safeguards against poor medical practice.

The concept of an ACO is a way to enable the government control over healthcare treatment by pre-setting how much your medical care should cost. In our current system, even with heavy government control, your medical care is still your decision.