An Overview of the Administration's ACO Policy

Reproduced with permission from BNA's Health Care Policy Report, 19 HCPR 788 (May 16, 2011). Copyright 2011 by The Bureau of National Affairs, Inc. (800-372-1033)

The Medicare Shared Savings Program (MSSP) creates large accountable care organizations to govern and manage the finances of disparate health care providers.

For a century, the medical care industry has operated under Laissez-Faire policies that have favored growth over efficiency. It is time to consider long-term restructuring.

Accountable care organizations (ACOs), a legislative tool of the Patient Protection and Affordable Care Act, are corporate entities that manage costs for groups of health care providers; participating institutions share the resulting savings. This article describes the legal framework that created ACOs; the author considers the broad authority given to the Secretary of the Department of Health and Human Services; other topics include ACO payment models and anti-trust, fraud and tax considerations.

Key Findings:

  • ACOs must serve at least 5,000 beneficiaries in order to participate in the MSSP.
  • The MSSP legislation allows for broad inclusion of health professionals beyond physicians.
  • The MSSP statute fails to address the avoidance of high-risk patients.

This article delves into the legal structure of ACOs. The MSSP statute made a number of policy changes that will likely have considerable downstream effects.