Categories: Health Care, Hospital, Prices,

An accountable care organization, or ACO, is a health care organization that uses a payment and care delivery model to bring together provider reimbursements and quality health care. ACOs have been touted as a key feature of the impending federally-sponsored health care reform. The group of health care providers who make up an ACO aim to reduce the total cost of care for any given group of patients. These providers agree to be held responsible for the quality, care, and cost of their patients. But health care lawyers in Miami report that these ACOs may introduce new risks to private practices and hospitals that join them. 

A recent article in the Journal of the American Medical Association (JAMA), co-authored by H. Benjamin Harvey, a radiologist at Massachusetts General Hospital, and I. Glenn Cohen, from Harvard Medical School, highlights the problems ACOs will face when getting off the ground. Similar to the managed care organizations (MCOs) of the 1990s, ACOs will face problems in explaining their cost containment policies, especially in cases where the outcome is unfavorable. 

The ACO model is noted for its flexibility, but all organizations share the same three core principles—a strong base in primary care that is, as a group, responsible for the quality of care and the total cost of this care; payments that work in conjunction with improvements in health, and reduce overall cost; and reliable, cutting-edge standards by which to measure progress in promoting care and achieving monetary savings. With these three tenets firmly in place, organizations with this model hope to make health care affordable for the patient as well as their doctor or hospital. 

The cost savings come into play in the relationship between the ACO and the insurance providers. The organization places some of the responsibility for affordability in the providers’ laps, and seeks to cut unnecessary expenses without compromising a patient’s ability to choose his medical services. To do this successfully, the ACO must build up relationships between physicians, hospitals, and insurance providers through an incentive program, so that coordinated, cost-efficient care can be delivered. And this cost-efficient care, although it is on the surface consumer-friendly, can backfire if patients feel their care is being compromised for the sake of saving dollars. 

As the article in JAMA points out, ACO providers have a better shot than the MCOs at balancing the line between cost containment and patient care, with built-in safeguards like the mandatory quality and outcome standards, and stringent reporting systems. ACOs will also benefit from superior data supplies, and working relationships with physicians. To lower liability risks, ACOs can take steps to purchase adequate medical liability insurance, and work to keep their individual “institutional care algorithms” in line with the established practice guidelines.

As the fields of health care and insurance coverage evolve under the federal government’s new laws, the health care lawyers at Miami-based law firm Lubell Rosen offer guidance and legal counsel to anyone who has to choose new insurance plans or work with doctors operating within accountable care organizations.