The Federal Trade Commission and the Department of Justice, released a proposed policy statement on accountable care organizations on March 31. In a three-hour workshop hosted by the FTC on May 9, groups representing major stakeholders provided their input on the statement to officials from both agencies. Here Susan DeSanti, director of the Office of Policy Planning at the FTC, shares her impressions of some key issues raised by each group.
1. Hospitals. Melinda Reid Hatton, senior vice president and general counsel of the AHA, said the proposed rules contain too many antitrust barriers for ACOs. She said the AHA was disappointed with the agencies' choice of proposed primary service areas to represent markets. She said they were not necessarily accurate and calculating them appeared to be burdensome. In the proposed rule, the PSA 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." The proposed rule also lays out the methodology and data necessary to calculate an ACO’s PSA share for each service provided.
2. Physicians. Henry Allen, antitrust counsel for the American Medical Association, asked the two antitrust agencies to clarify what role their 1996 statement allowing practices to share financial risk would have for ACOs. Mr. Allen also commented that setting up an ACO would be too financially burdensome for practices.
3. Payors. Joseph Miller, general counsel for America's Health Insurance Plans, reiterated concerns that ACOs might gain too much market power. But he said he was pleased that the agencies propose to require review of all ACOs with a primary service area share of more than 50 percent. Meanwhile, he and others noted the guidance only applies to entities formed after March 23, 2010. Entities formed before this date could operate as ACOs with no guidance offered.
4. Consumers. Elizabeth Gilbertson, chief strategist forof a union health plan for hotel and restaurant employees, said she was concerned about ACOs shifting savings from the Medicare program by charging higher rates to private payors. For example, a hospital in an ACO might lose money by admitting fewer patients, which then would have to be made up in higher charges for other payors.
Learn more about the FTC workshop.
Related stories on ACOs:
6 Ways ACOs Differ From HMOs
6 Points on Creating ACO Contracts for Physicians
Not Ready to Form an ACO? Three Value-Based Alternative Models
1. Hospitals. Melinda Reid Hatton, senior vice president and general counsel of the AHA, said the proposed rules contain too many antitrust barriers for ACOs. She said the AHA was disappointed with the agencies' choice of proposed primary service areas to represent markets. She said they were not necessarily accurate and calculating them appeared to be burdensome. In the proposed rule, the PSA 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." The proposed rule also lays out the methodology and data necessary to calculate an ACO’s PSA share for each service provided.
2. Physicians. Henry Allen, antitrust counsel for the American Medical Association, asked the two antitrust agencies to clarify what role their 1996 statement allowing practices to share financial risk would have for ACOs. Mr. Allen also commented that setting up an ACO would be too financially burdensome for practices.
3. Payors. Joseph Miller, general counsel for America's Health Insurance Plans, reiterated concerns that ACOs might gain too much market power. But he said he was pleased that the agencies propose to require review of all ACOs with a primary service area share of more than 50 percent. Meanwhile, he and others noted the guidance only applies to entities formed after March 23, 2010. Entities formed before this date could operate as ACOs with no guidance offered.
4. Consumers. Elizabeth Gilbertson, chief strategist forof a union health plan for hotel and restaurant employees, said she was concerned about ACOs shifting savings from the Medicare program by charging higher rates to private payors. For example, a hospital in an ACO might lose money by admitting fewer patients, which then would have to be made up in higher charges for other payors.
Learn more about the FTC workshop.
Related stories on ACOs:
6 Ways ACOs Differ From HMOs
6 Points on Creating ACO Contracts for Physicians
Not Ready to Form an ACO? Three Value-Based Alternative Models