Accountable Care Organization: A Case Study

Accountable Care Organizations (ACOs) are comprised of doctors, practitioners, and hospitals, to give healthcare services to patients. The goal of coordinated care is provide high quality of care through an integrated service model while avoiding unnecessary duplication of services and preventing medical errors. The ACO is evaluated through a quality metrics to assess care provided to patients in a cost efficient manner.

CMS has established five domains in which to evaluate the quality of an ACO 's performance which include 1) patient/caregiver experience, 2) care coordination, 3) patient safety, 4) preventative health, and 5) at-risk population/frail elderly health. When the ACO is successful in providing care through this system, the savings

Now, under the recent proposal the FTC/DOJ recommends all ACOs formed after March 23, 2010 to a voluntary 90-day antitrust review. Prior to participating in the Shared Savings Program, the ACO applicant may submit a request for review to the Agencies, who will promptly notify the applicant whether the FTC or DOJ will conduct the review. In order to begin the 90-day review period, the ACO applicant must then submit to the reviewing agency a variety of documentation, including (1) the ACO application and all supporting documents, (2) documents discussing business strategies and competition, (3) certain competitive and market information, and (4) information related to restrictions that prevent ACO participants from obtaining information regarding prices that other ACO participants charge to private payers that do not contract through the ACO. Within 90 days after receiving all documents and information, the reviewing agency will advise the ACO that the formation of the ACO (1) does not likely raise competitive concerns or does not do so conditioned on the ACO 's written agreement to take specific steps to alleviate the agency 's concerns, (2) potentially raises concerns, or (3) likely raises competitive

The activities and formation of ACOs that do not fall within the "antitrust safety zone" will generally be evaluated by the Agencies under the Rule of Reason, which weighs the potential anticompetitive effects of collaboration against its potential pro-competitive effects, such as enhancing efficiency. The Policy Statement notes that the Rule of Reason will be applied by the Agencies "if providers are financially or clinically integrated and the agreement is reasonably necessary to accomplish the pro-competitive benefits of the integration."

Converting from fee-for-service (FFS) model to value based reimbursement has brought many challenges to healthcare providers. These challenges include shift in payor mix, shared savings and increase in tracking provider quality and performance. The shift in payor mix relates to the decrease in commercial patients with higher reimbursement rates while Medicare and Medicaid patients with lower reimbursement rates will increase. This will shift impacts the provider’s bottom line because with the increases in drugs, supplies and salaries and the decrease in reimbursements, hospitals profit margins will