Accountable Care Organizations and Antitrust

Aimed at delivering higher quality care to Medicare patients while reducing costs, a new initiative of the Affordable Care Act (ACA), known as accountable care organizations (ACOs), received final rules from the Centers for Medicare and Medicaid Services on October 20, 2011.

Since ACOs are expected to become a significant new type of health care organization, competing for both Medicare and fee-for-service patients, the Federal Trade Commission and Department of Justice issued guidelines on that same day regarding potential antitrust issues that could result.

This paper summarizes the five major issues likely to be raised and addressed in the development and growth of ACOs which include: (1) market definition and power; (2) efficiency and quality metrics; (3) physician and hospital exclusivity; (4) public-private cost-shifting; and (5) monitoring.

This new ACO model is the latest effort to balance quality health care delivery and its cost.