Summary of the workshop on Accountable Care Organizations (ACOs) in Anti-trust, Physician Self referral, and civil monetary penalty

ACOs were mandated by Congress in the Patient Protection and Affordable Care Act (PPACA).  ACOs will be integrated delivery systems comprising of doctors, hospitals, and other providers whose reimbursement will partially be based on meeting certain quality and cost targets. The goal of ACOs is to improve the overall quality of care provided to patients and slow rising healthcare costs, primarily by coordinating care. The provision for ACOs under PPACA requires that they are started by January 1, 2012.
Because ACOs can potentially wield strong market power and reduce competition, the Centers for Medicare and Medicaid Services (CMS), the Federal Trade Commission (FTC) and the Office of Inspector General (OIG) held a workshop on ACOs (on October 5, 2010) with stakeholders to discuss processes that these agencies can adopt to reduce the probability of ACOs stifling competition, promoting innovation within ACOs, and ensuring that the current anti-trust, physician self-referral and civil monetary penalty laws don’t impede the ACOs from accomplishing their quality and cost saving goals.
During the workshop, officials from CMS, FTC and OIG and the workshop panelists:

  • Recommended that anti-trust enforcement agencies refrain from prosecuting ACOs that violate anti-trust laws when ACOs legally comply with the statutory requirements for ACO formation
  • Discussed the impact of Anti-trust agencies’ requirement  for financial integration where members of the group share responsibility of financial risk (gains and losses) on ACOs
  • Advised against any national policies that replace single specialty groups with ACOs nationwide until CMS obtained evidence proving that doing so would create tangible healthcare savings
  • Explored ways to encourage the formation of multiple ACOs that will compete in regions
  • Advised that CMS should create a self monitoring compliance program for the ACOs to evaluate themselves or assign accrediting organization that will evaluate the ACO’s compliance
  • Suggested that CMS require interoperable EHRs to share data amongst providers, implement infrastructure to monitor whether the ACOs are making quality and cost improvements, and compare each ACO’s performance against its peers
  • Indicated that CMS needs to further clarify the guidelines for clinical integration in ACOs
  • Advised that CMS should not be too restrictive with its definition of an ACO to allow diversity in how it is formed and  encourage innovation
  • Advised that CMS should focus instead on ACOs’ requirements for optimal outcomes
  • Advised that CMS implement a single system of quality measures
  • Indicated that the shared savings concept might encourage higher costs for payers  especially in cases where ACOs would be able to show clinical integration with reduced costs, innovation, and high quality care (the shared saving concept comes from a Medicare physician demonstration that consisted of  groups with >200 physicians. Medicare projected costs attributed to each physician per patient. If the participating physician incurred savings, Medicare kept the first 2% of the savings and if there were saving s in excess of the 2%, Medicare shared these savings with the participating physicians -  assuming that they delivered quality care
  • Discussed how incentives would eventually disappear under a Shared saving s concept as the ACOs became more effective with reducing costs and improving quality
  • Mentioned that CMS would need to continually raise the bar, adopt transparent processes, and incorporate viable and easy ways to collect performance measures

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Posted on November 2, 2010


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