Insurers cautious on accountable care

Back to TopCommentsE-mailPrintBookmark and Share

Health insurers, such as locally based WellPoint Inc. and Advantage Health Solutions, have been looking to work with health care providers to form accountable-care organizations. But insurers also worry that the accountable-care concept will become nothing more than a negotiating tactic by hospitals and doctors.

A letter written late last month by the top attorney at America’s Health Insurance Plans, a health insurance trade group, captures both the hopes and fears that health insurers have about accountable care groups, or ACOs.

“Those ACOs that face forward, representing novel and improved approaches to patient care and provider reimbursement, have tremendous promise. Those that face backward, however, representing simply the desire to engage in joint negotiation or aggregate market power, will leave consumers with decreased access, lower quality and higher prices,” General Counsel Joseph Miller wrote in a letter to federal Medicare administrators.

Currently, doctors and hospitals are restricted in how they refer patients to their own facilities, and they cannot engage in contractual relationships where one health care provider rewards another for referrals. Miller said those laws need to be upheld in general, with only “narrowly tailored exceptions or waivers.”

Accountable care is a lot like managed care, which was prevalent in the 1990s, in that it pays health care providers to take responsibility for the total health of a specific population of patients.

Managed care sparked a backlash from doctors, who preferred to be paid a separate fee for each service they perform. Accountable care tries to combine principles of both the managed care and fee-for-service systems.

The federal Medicare program has proposed contracts with accountable-care organizations that would be paid fees for each service, but also would be offered a bonus if the doctors showed they provided high-quality care and saved Medicare money. Under the health-reform law, these “shared savings” contracts will begin in January 2012.

But there’s wide room for doctors to negotiate other payment arrangements, both with Medicare and even more so with private health insurers.

In an August interview, Colin Drozdowski, WellPoint’s vice president of enterprise contracting and payment reform, said the Indianapolis insurer is interested in participating in ACOs where the providers are motivated primarily by improving care, not just improving their incomes.

“It’s not a one-size fits all. We don’t expect an accountable-care organization to exist in every market,” he said, adding that WellPoint won’t do one “if we don’t feel that there is a philosophical alignment there.” To read more about accountable efforts by WellPoint and Advantage Health Solutions, click here.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. By Mr. Lee's own admission, he basically ran pro-bono ads on the billboard. Paying advertisers didn't want ads on a controversial, ugly billboard that turned off customers. At least one of Mr. Lee's free advertisers dropped out early because they found that Mr. Lee's advertising was having negative impact. So Mr. Lee is disingenous to say the city now owes him for lost revenue. Mr. Lee quickly realized his monstrosity had a dim future and is trying to get the city to bail him out. And that's why the billboard came down so quickly.

  2. Merchants Square is back. The small strip center to the south of 116th is 100% leased, McAlister’s is doing well in the outlot building. The former O’Charleys is leased but is going through permitting with the State and the town of Carmel. Mac Grill is closing all of their Indy locations (not just Merchants) and this will allow for a new restaurant concept to backfill both of their locations. As for the north side of 116th a new dinner movie theater and brewery is under construction to fill most of the vacancy left by Hobby Lobby and Old Navy.

  3. Yes it does have an ethics commission which enforce the law which prohibits 12 specific items. google it

  4. Thanks for reading and replying. If you want to see the differentiation for research, speaking and consulting, check out the spreadsheet I linked to at the bottom of the post; it is broken out exactly that way. I can only include so much detail in a blog post before it becomes something other than a blog post.

  5. 1. There is no allegation of corruption, Marty, to imply otherwise if false. 2. Is the "State Rule" a law? I suspect not. 3. Is Mr. Woodruff obligated via an employment agreement (contractual obligation) to not work with the engineering firm? 4. In many states a right to earn a living will trump non-competes and other contractual obligations, does Mr. Woodruff's personal right to earn a living trump any contractual obligations that might or might not be out there. 5. Lawyers in state government routinely go work for law firms they were formally working with in their regulatory actions. You can see a steady stream to firms like B&D from state government. It would be interesting for IBJ to do a review of current lawyers and find out how their past decisions affected the law firms clients. Since there is a buffer between regulated company and the regulator working for a law firm technically is not in violation of ethics but you have to wonder if decisions were made in favor of certain firms and quid pro quo jobs resulted. Start with the DOI in this review. Very interesting.