How to reduce the malpractice threat of ACOs

Participants in accountable care organizations (ACO) may face a legitimate threat of increased malpractice liability, but there are steps physicians can take to reduce their risk, according to a study published in the Journal of the American Medical Association.

"Allegations of institutional malfeasance related to cost-saving efforts could increase liability costs and create a chilling effect on ACOs," wrote authors H. Benjamin Harvey, M.D., J.D., of Massachusetts General Hospital, and I. Glenn Cohen, J.D., of Harvard Law School.

"Moreover," they wrote, "these suits need not progress to trial to threaten ACOs. The assertion of institutional malfeasance alone adds strength to a lawsuit and introduces the potential for punitive damages. This could increase jury awards and settlement amounts. In addition, the broader nature of the claims will enable more robust discovery beyond the care received by the patient."

In contrast to managed care organizations, which have some legal immunity from similar risks, ACOs currently have no such protection, noted an article in Medical Economics.

However, the study authors recommended ACOs take the following steps to reduce their risk:

  • Buy managed care errors and omissions insurance to at least partially protect against the potential increased liability when cost-containment efforts are blamed for bad outcomes.
  • Ensure that your organization is following recognized standards of care and be able to support that medical decisions are evidence-based.
  • Use caution in tying physicians' incomes directly to their demonstrated ability to reduce costs.

To learn more:
- read the article from Medical Economics
- see the JAMA study