The option of capitated payments for accountable care organizations makes it possible for ACOs to lose money if they fail to reduce the cost of care, according to a report by the Wall Street Journal Health Blog.
In addition to the shared savings models most commonly associated with ACOs, the healthcare law allows CMS to use a "partial capitation model," which exposes ACO to financial risk for certain items and services. The law also leaves the door open for other payment models that could "improve the quality and efficiency" of Medicare services.
The capitation model, which pays a flat per-member, per month fee, can provide higher payments than shared savings for efficient organizations but it can bankrupt inefficient organizations, as occurred in the 1990s. Some healthcare policymakers, such as MedPAC, think ACOs may need a stronger incentive than shared savings.
CMS is currently devising payment models for ACOs as part of proposed ACO regulations to be released in the next few weeks. Jonathan Blum, deputy administrator of CMS, said the agency wants to "make sure our payment models provide the opportunity for different types of organizations to participate," including small organizations that could not handle financial risks.
Read the Wall Street Journal Health Blog report on ACOs.
Read the MedPAC comment on ACO payments
http://www.medpac.gov/documents/11222010_ACO_COMMENT_MedPAC.pdf
Read more coverage on ACOs:
- Four Medical Associations Release Joint Principles for ACOs
- AMA Meeting to Consider Requiring Physicians Lead ACOs, Dropping Support of Insurance Mandate
- More Than Half of Healthcare Leaders See Shared Savings as Very Effective Strategy for ACOs
In addition to the shared savings models most commonly associated with ACOs, the healthcare law allows CMS to use a "partial capitation model," which exposes ACO to financial risk for certain items and services. The law also leaves the door open for other payment models that could "improve the quality and efficiency" of Medicare services.
The capitation model, which pays a flat per-member, per month fee, can provide higher payments than shared savings for efficient organizations but it can bankrupt inefficient organizations, as occurred in the 1990s. Some healthcare policymakers, such as MedPAC, think ACOs may need a stronger incentive than shared savings.
CMS is currently devising payment models for ACOs as part of proposed ACO regulations to be released in the next few weeks. Jonathan Blum, deputy administrator of CMS, said the agency wants to "make sure our payment models provide the opportunity for different types of organizations to participate," including small organizations that could not handle financial risks.
Read the Wall Street Journal Health Blog report on ACOs.
Read the MedPAC comment on ACO payments
http://www.medpac.gov/documents/11222010_ACO_COMMENT_MedPAC.pdf
Read more coverage on ACOs:
- Four Medical Associations Release Joint Principles for ACOs
- AMA Meeting to Consider Requiring Physicians Lead ACOs, Dropping Support of Insurance Mandate
- More Than Half of Healthcare Leaders See Shared Savings as Very Effective Strategy for ACOs