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Feds Reassure Hospitals, Doctors On Cooperation Through ACOs

Oct 05, 2010

BALTIMORE — Federal Trade Commission Chairman Jon Leibowitz told a meeting of 300 health industry representatives Tuesday his agency would explore an "expedited review process" for hospitals and doctors looking to determine if new partnerships they form to provide care would violate antitrust laws.

He was one of several top federal officials trying to address the concerns of hospitals and doctors. A key part of the new health law encourages the development of "accountable care organizations" that would allow doctors to team up with each other and with hospitals, in new ways, to provide medical services. Health care providers want to make sure their ACOs won’t 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.

Donald Berwick, administrator of the Centers for Medicare and Medicaid Services, promised the industry that the government agencies that oversee doctors and hospitals will work together to give unified guidance on how to form ACOs. "We will need a regulatory framework that nurtures cooperation, while it guards against the lingering threat of inappropriate practices," he said at CMS headquarters, the site of the meeting.

"It’s not the status quo repackaged—it’s a new and better way to organize care," Berwick said of ACOs. But in a country where most doctors work independently of hospitals, the new health care financing and delivery model will be a major shift. "The transition from fragmented system to an integrated-person centered system is not going to be an easy one."

Leibowitz also praised the ACO concept: "If ACOs stifle rather than unleash competition then we will really have let one of the best opportunities to improve health care slip away."

Health and Human Services Inspector General Daniel Levinson promised "fresh thinking" on how his agency enforces anti-fraud laws that prohibit hospitals from giving doctors any financial inducement for referring patients. "We want to make sure ACOs are not unduly inhibited by existing fraud and abuse laws … Our rules should not stand in the way of improving quality and reducing costs through ACOs."

"Today is an important step in government and industry efforts to develop a new health care delivery model that will help provide quality health care at lower costs," Levinson said.

Douglas Hastings, a health care attorney and chairman of the law firm Epstein Becker & Green, said he was encouraged from what he heard at the meeting that federal officials would allow hospitals to pay performance bonuses to doctors for meeting quality targets, or share in the cost savings that the ACOs might provide.

Despite the praise of ACOs, they cause anxiety among some in the health industry. Ann-Marie Lynch of the Advanced Medical Technology Association, which represents medical device makers, said she fears ACOs could encourage doctors to use less costly devices instead of what works best for the patient.

"We are worried about the market power ACOs may wield…and it may present significant risks to patients," she said.

Related story: Health Care Providers, Insurers: Accountable Care Organizations Bring Legal Worries (Gold and Galewitz, 10/5)

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