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Iowa Healthcare Law Blog News & Updates on Legal, Policy, & Business Issues Facing the Health Care Industry in Iowa

Accountable Care Organizations

Posted in Accountable Care Organizations (ACO)

I recently attended a CLE entitled “Accountable Care Organizations: Physician Perspective,” presented by the American Bar Association, Health Law Section, which was presented by David W. Hilgers and Amy K. Fehn.  As a result of the Affordable Care Act mandating that the Medicare Share Savings Program be implemented, many have moved to Accountable Care Organizations (ACOs) as the implementing tool.  Some of the key features of the ACO is that each must have 5,000 beneficiaries (patients) that are assigned to it.  Thus, primary care physicians have a special role in the ACO environment.  ACOs do not need to include hospitals, but many do.  Physician groups, individual physicians and hospitals across Iowa are scrambling to define their roles in this new ACO world.  Iowa Health Clinic attempted to position itself for an early place in the ACO venture world.  Recently the Tri-Health Systems in Fort Dodge Iowa, was identified as one of the pioneer ACOs.  The two large hospital systems in Des Moines, Iowa, Iowa Health Systems and Mercy Hospital, also recently announced their plans for ACOs.  Individual physicians and physician groups will need to carefully analyze the ACO structure and whether they want to be part of it.  There is a fear that without an ACO affiliation, then the physicians or physician groups will not be able to survive.  Thus recently, I helped form an Independent Physician Association (IPA) of primarily family practitioners, which joined a virtual ACO (a very new concept) to share in the shared savings program.  A great deal of information will be learned as this plays out.  In a decision as to whether to join an ACO,  several legal issues need to be considered, including, but not limited to:

1) organizational structure of the entity (both in type and governance);

2) the tax treatment of the organization (will it be tax exempt);

3) antitrust laws;

4) regulatory restrictions (anti-kickback statutes, Stark, Civil and Monetary Penalty Law); and

5) state laws (insurance regulations within each state).