Doctors and hospitals eager to pursue a new model of health care being promoted by the Obama administration are raising concerns that they could run afoul of antitrust and anti-fraud laws, while insurers are warning that the new arrangements could lead to higher prices for medical care.聽
The differences will be hashed out Tuesday, when hundreds of health care representatives attend a meeting with federal officials in Baltimore. The session is being conducted by the Federal Trade Commission, the Centers for Medicare and Medicaid Services and the Office of the Inspector General of the Health and Human Services Department.
A key part of the health overhaul law encourages the development of 鈥渁ccountable care organizations鈥� that would allow doctors to team up with each other and hospitals in new ways to provide medical services. Health care providers want to make sure their ACOs won鈥檛 be accused of stifling competition or trying to fix prices when they bargain with insurance companies. Insurers, meanwhile, are expressing concern that providers could use the leverage of ACOs to demand higher prices.聽
Whether ACOs 聳 which are just a concept for now 聳 can be made to work could determine whether the health care law ultimately succeeds in lowering costs and improving care for consumers.聽 As envisioned by the law, the organizations would be paid to cover the cost of care for Medicare beneficiaries in a given area and receive financial rewards if they met quality and cost-saving targets.
The federal health program for the elderly and disabled is due to start trying out ACOs in 2012, and some providers are scrambling to figure out how to apply the idea to privately insured patients as well. The antitrust rules mostly concern the聽 private insurance market; in Medicare, the government sets the payment rates.
Today, most hospitals and doctors work independently of each other, which experts say tends to drive up costs and hurt quality.聽 鈥淎COs could transform the way care is delivered and financed and we want the government agencies to take a fresh look at how anti-trust and anti-fraud laws apply,鈥� said Chet Speed, vice president of policy at the American Medical Group Association,聽 which represents large physician groups. 鈥淭his open dialogue could be the first step to overcoming these legal obstacles.鈥�
The new ACOs could mimic, for example, the tightly integrated Mayo Clinic, though other variations will likely be tried as well.
In the lead-up to the meeting the hospitals and doctor groups asked regulators聽 for clear, 鈥渦ser-friendly鈥� guidance to make sure they don鈥檛 violate federal laws in forming ACOs. Speed said his members don鈥檛 want to spend $1 million to form an ACO without knowing ahead of time whether it will be deemed legal. Hospitals also want HHS to spell out how doctor-hospital ACOs can get waivers on anti-kickback and other fraud and abuse rules.
But America鈥檚 Health Insurance Plans, the insurers鈥� trade group, warned government officials against being too accommodating. It said in a recent letter聽 that ACOs won鈥檛 help consumers 鈥渋f they are mere vehicles for price fixing or aggregating market power, and the antitrust agencies must continue their efforts in this area, using enforcement, guidance, and other tools.鈥�
Cory Capps, an economist at Bates White Economic Consulting, said, 鈥淲e could end up in the worst world,鈥� one in which the delivery of care isn鈥檛 made more efficient but providers accumulate 鈥済reater pricing power.鈥�
Dr. Elliott Fisher, a Dartmouth Medical School researcher credited with coining the term 鈥渁ccountable care organizations,鈥� said the dispute captures a central contradiction in health care policy today: While many argue that closer relationships among doctors and hospitals are essential to improving care and holding down costs, others worry that will lead to consolidation and higher prices for medical care.
Susan DeSanti, director of policy planning at the FTC, said that the agency is working with CMS on the issues, and that guidance on ACOs will be issued to reduce uncertainty. 鈥淭he antitrust laws are actually consistent with the goals of ACOs,鈥� she said. 鈥淭he antitrust laws encourage collaborations when they are going to produce good things for consumers, like improved health care, and the only caveat is that the creation of market power shouldn鈥檛 go along with that. But antitrust is not a barrier here.鈥�
A few healthcare systems around the country already are embracing the notion of ACOs, and developing them for their private insurance busines. In February, two competing hospitals in Omaha 鈥� the Nebraska Medical Center and Methodist Health System 鈥� announced they would form the Accountable Care Alliance in an effort to reduce duplication of services, limit unnecessary tests and increase communication between doctors and hospitals. Rita Potter, who is on the board of the alliance, says officials realize there鈥檚 a risk in going ahead so soon, but concluded that 鈥渨e just couldn鈥檛 wait.鈥� For now, the alliance is playing it safe by not jointly negotiating rates with insurers.
In Louisville, Norton Healthcare, a large hospital system, and the health insurer Humana are working to create an ACO that will provide care to 21,000 employees of both companies. If the ACO reduces spending by a certain amount and meets quality targets 鈥� such as making sure patients get antibiotics in a timely way聳 the hospital system will share in the insurer鈥檚 cost savings.
Humana Medical Director Dr. Tom James said the insurer wants to show that 鈥渉ealth plans have a role with ACOs,鈥� adding that it鈥檚 important that ACOs be seen as more than cost-cutters. 鈥淚f not done right, it could give the whole movement a bad name,鈥� he said. 鈥淲e learned that with HMOs in the 1990s.鈥�