Medicare board fears public backlash to ACOs

The Medicare payment advisory panel is warning that accountable care organizations (ACOs), boosted by the new healthcare reform law, might face public backlash similar to what managed care organizations experienced in the 1990s.

The reform law provides incentives to ACOs — groups of providers and hospitals that coordinate efficient and quality care to a certain set of Medicare patients.

However, prior history shows that patients felt forced into managed care by their employers without seeing any benefits from the change, and some doctors who opposed the organizations helped stoke patients’ fears, the Medicare Payment Advisory Commission (MedPAC) wrote in a letter to the Medicare chief last week.

Legislative changes may be necessary to provide incentives, such as reduced beneficiary cost sharing or providing a share of the savings, to help beneficiaries accept ACOs, MedPAC wrote. Further, Medicare should allow beneficiaries the choice to switch from an assigned primary care provider to another provider who is not in an ACO, it said.

Meanwhile, physician and hospital groups said the government needs to create explicit safe harbors from antitrust enforcement and anti-kickback laws. The American Medical Association asserted that current laws and guidelines favor hospital-based systems with employed physicians, as opposed to small, independent physician practices.

The Department of Justice told a House judiciary subcommittee last week that it intends to offer expedited guidance to ensure that providers can form ACOs compliant with antitrust laws.