Attorney says time will tell is ACOs are good for W.Va.

By Kyla Asbury | Apr 27, 2011


CHARLESTON – The U.S. Department of Health and Human Services has recently released proposed new rules to help physicians, hospitals and other healthcare providers better coordinate healthcare for Medicare patients through Accountable Care Organizations.

ACOs create incentives for healthcare providers to work together to treat an individual patient across care settings, including doctor's offices, hospitals and long-term care facilities.

Chuck Johnson, an attorney at Frost Brown Todd in Charleston, said the Medicare Shared Savings Program, which is a purely voluntary program, will reward ACOs that lower healthcare costs while meeting performance standards on quality of care and putting the patients first.

"The program is trying to develop value-based healthcare purchasing instead of volume-based," Johnson said. "This is trying to get healthcare providers to work together for the good of the patient."

ACOs seek to generate savings by providing efficient and high-quality care.

The network of providers and healthcare facilities in an ACO must provide and manage the care of at least 5,000 Medicare patients for a minimum of three years and the savings generate by more efficient care with less waste leaves money available as a reward to the providers for the high-quality care.

Physicians will strive to provide the highest quality and most efficient care possible since they will receive rewards based on the quality of care.

But, Johnson said, if the standards of care are not met, the physicians do not receive a share in the overall savings and run the risk of possibly losing their contracts.

Johnson said there are two options when developing an ACO; a one-sided model and a two-sided model.

"In the one-sided model, participants only share the savings," Johnson said. "But in the two-sided model, participants share in both the savings and the losses. The second option is riskier, but there is also a higher percentage of savings."

Johnson said ACOs intend to change how healthcare is delivered.

"With ACOs there are going to be many changes made in healthcare, but these changes are being made to ensure healthcare of a higher quality," Johnson said.

Johnson said there are still some gray areas in ACO special rules when it comes to legal concerns, such as how federal anti-trust laws will affect ACO development and how rural states like West Virginia will be able to deal with the challenge of obtaining 5,000 Medicare beneficiaries in a single ACO.

"Only time will tell," Johnson said. "There are challenges and risk with ACOs, just has there are with other programs, but there are also opportunities, too."

Johnson is participating in a Healthcare Law seminar that is part of West Virginia's Continuing Legal Education program on May 20 in Charleston, where he will be speaking about ACOs.

For more information on the seminar, visit

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