Legal hurdles in ACO process to dissuade participants

The legal challenges associated with accountable care organizations (ACOs) might dissuade healthcare institutions, providers, and payers from hopping on the bandwagon, according to an article in The National Law Journal yesterday.

Slated for January 2012, the ACO program lacks the support of many leading hospitals, including Cleveland Clinic, Mayo Clinic, Geisinger Health System, and Intermountain Healthcare, who are forgoing participation. One reason may be that ACO hopefuls face legal burdens to investigate and abide by existing laws that keep a competitive market in place.

For example, Christi Braun, a partner at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo said that one client already has spent $50,000 on economist and legal fees and is not even halfway through the ACO program application process, according to the Journal article.

Skeptics and supporters of ACOs, alike, might worry that care collaboration will turn into monopolies and lead to price fixing. However, ACOs are currently under the watchful eye of the regulatory agencies of the Department of Justice's (DoJ) Antitrust Division and the Federal Trade Commission (FTC).

The DoJ and the FTC on March 31 released a ground-breaking policy, which essentially says if they find an ACO formation to be anticompetitive, the would-be ACO cannot participate in the Shared Savings Plan, a decision for which there is no appeal, according to the article.

"It's an unusual scenario--an agency having mandatory review prior to allowing participation in another government program," said Hogan Lovells Washington partner Robert Leibenluft, who headed the FTC's healthcare division from 1996 to 1998. "The arrangement turns the FTC and DoJ into antitrust regulators rather than law enforcers, he said.

Despite the legal pitfalls, most ACOs won't violate antitrust laws, said Gail Kursh, deputy chief of the legal policy section of the antitrust division of the Department of Justice. The antitrust laws aren't intended to prevent ACOs from forming but rather preventing anticompetitive behavior, she said.

Currently, more than half of healthcare executives say they will participate in ACOs, according to a recent poll by U.S. News and World Report. In fact, 66.4 percent of respondents were likely or extremely likely that their hospital would join an ACO. Only 3.7 percent said that joining an ACO was not at all likely.

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