Safety nets unprepared for ACO legal barriers

Safety-net providers aren't prepared for the legal and regulatory barriers that come with accountable care organizations, rating their level of readiness as 4.23 on a scale from 1 to 9 (the most ready), according to a survey by the University of California, Berkeley, School of Public Health and Berkeley Law released this month. Twenty-six providers in Alameda and Orange counties reported challenges with protecting tax-exempt status of participating organizations as a key legal barrier.

Safety-net providers also appear ill-prepared for meeting the finance and contract demands of ACOs (an average 4.47 rating) and lack information systems to track utilization and costs, according to the survey results.

"As expected, respondents reported the need for greater capabilities with regards to electronic health record functionality, including using disease registries, embedding practice guidelines, incorporating information from non-participating providers, and constructing electronic patient communication and engagement tools," the policy brief states.

However, safety-net providers felt they were more ready for the organizational mission and to serve the population (5.69). They felt confident to manage clinical care (5.33) and report on performance (5.20).

The study looked at whether safety nets, such as federally qualified health centers, community clinics and public and private disproportionate share hospitals, actually can achieve savings as proposed under the Center for Medicare and Medicaid Innovation programs. With limited resources, safety nets are challenged even more than other organizations to benefit from the federal shared savings programs.

"With regard to the overall assessment of their readiness to assume responsibilities for providing more accountable care, respondents indicated that they felt more ready to meet the quality metrics but were much more concerned about the ability to meet expenditure and cost targets," the report states. Overall, safety-net providers reported a readiness score of 4.8 out of 9.

The report concluded that the two California counties are "moderately well prepared" but called for significant work on the safety nets to develop their needed capabilities, as well as legislative policies to support development and payment incentives.

Half of senior executives at hospitals and health systems are unsure about whether to participate in the Medicare ACO program, according to a November 2011 poll conducted by KPMG, Epstein Becker Green and The JHD Group. By U.S. News and Fidelity Investments numbers from a July 2011 survey, 66.4 percent of hospital executives said it was likely or extremely likely that their hospital would join an ACO. Only 3.7 percent said joining an ACO was not at all likely.

For more information:
- check out the report (.pdf)

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