Christensen Law Explains Accountable Care Organizations
Accountable Care Organizations are a part of the Affordable Care Act that’s designed to give doctors incentives to keep people healthy and out of the hospital. Christensen Law explains this new denomination of healthcare in the article below.
Written By: D. Wade Christensen, JD^ , J. Clay Christensen, JD^^ , L. Nazette Zuhdi, JD, LLM^^^, Adam W. Christensen^* , JD, MBA, Blake Christensen, DO, and S. Sandy Sanbar, MD, PhD, JD^**
The Patient Protection and Affordable Care Act (PPACA) was signed into law by President Barack Obama on March 23, 2010. It created the Medicare Shared Savings (MSS) program*. The MSS program promotes accountability for a patient population, coordinates items and services under part A and B; and encourages investment in infrastructure and redesigned care processes for the purpose of providing high quality and efficient service delivery.
In 2011, the Centers for Medicare & Medicaid Services (CMS), which is one of the HHS agencies, issued the rule that established Accountable Care Organizations (ACOs)** . The ACO initiative is a doctor-hospital partnership which heavily emphasizes integration through technology. The goals or benchmarks of ACOs are the provision of good quality care to Medicare beneficiaries, the reduction of waste when rendering medical services, and ultimately the containment of health care cost.
The doctors and hospitals will jointly be accountable for the health of their patients. They are expected to utilize, meaningfully, the use of electronic medical records and to effectively coordinate care among all providers, and are discouraged from repeating tests on patients. The Accountable Care Organizations providers contractually agree to manage all of the health care needs of a minimum of 5,000 Medicare beneficiaries for at least three years. They are given strong incentives to cooperate and save money by avoiding unnecessary tests and procedures.
They will get paid more in bonuses for keeping their patients healthy and out of the hospital. On the other hand, the ACOs may have to pay a penalty if they do not meet performance and savings benchmarks. And patients in Accountable Care Organizations would still be free to see doctors of their choice outside the network without paying more. In this regard, ACOs differ from HMOs (Health Maintenance Organizations) where patients do not have that choice. In an attempt to become integrated systems, U.S. hospital systems have been buying up physician practices in hopes of becoming ACOs that directly employ the majority of their physicians.
The novel idea of the ACO doctor-hospital partnership has raised some important legal concerns, including:
(1) anti-trust and anti-fraud laws
(2) novel contracts between doctors and hospitals
(3) direct liability of ACOs for integrated system failure or improper integration of care, failure to properly credential and re-credential physicians, and failure to properly train or oversee personnel, vicarious liability extending to both old and new duties which are based on general corporate and agency law principles
(4) liability for independent contractors under the theory of apparent authority, or ostensible agency
(5) liability of primary care physicians for any system breakdown, even at a third-party level
(6) ACO liability caused by self-insurance which protects physicians as long as the system remains financially stable
(7) malpractice claims resulting from incentivizing physicians to not repeat tests or not to refer patients for needed treatment, delay some admissions or discharge patients prematurely
(8) the standard of care for ACOs may be higher than the prevailing standard because the physician may have to explain why he or she did not follow the ACO application, assessment and individualized care plan
(9) when providing informed consent, physicians should ascertain that the patient comprehends the alternative therapies presented and their risks in order to make an informed choice; patient understanding is pivotal in the informed consent process.
An ACO should put the beneficiary and family at the center of all its activities, honor individual preferences, values, backgrounds, resources, and skills, and should thoroughly engage people in shared decision-making about diagnostic and therapeutic options. This is referred to as patient engagement, which allows the patient to assess the merits of various treatment options in the context of his or her values and convictions. The ACO standards may indeed be stricter than the prevailing informed consent standards. Physicians may be liable for lack of informed choice for failure on the part of the physician to demonstrate that a patient understood all reasonable alternatives and made decisions accordingly.
^ First Gentleman of Oklahoma; Owner, Christensen and Associates; ^^ Owner and Managing Director, Christensen Law Group ^^^ Chair, Health Law Section, Christensen Law Group ^* Attorney, Health Law Section, Christensen Law Group ^** Of Counsel, Health Law Section, Christensen Law Group Address for all: 210 Park Avenue Suite 700, Oklahoma City, OK 73102.
Don’t forget, the lawyers at Christensen Law can answer any other questions you have on Accountable Care Organizations.