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  • Manatt Partner Addresses ACOs in Hospital Compliance Watch

    “Accountable Care Organizations and Stark Law: Can They Get Along?”
    Hospital Compliance Watch

    October 8, 2010 — Manatt’s Robert D. Belfort, a healthcare partner in the firm’s New York office, discussed potential conflicts between accountable care organizations (ACOs) and Stark law in industry trade publication Hospital Compliance Watch.

    ACOs, the publication reports, are intended to put healthcare providers together to share responsibility for improving the health of patients.  While not an entirely new concept, ACOs were a key feature of the recent debate over healthcare reform, with the Patient Protection and Affordable Care Act encouraging the formation of ACOs by authorizing the Centers for Medicare & Medicaid Services (CMS) to provide financial incentives to participants.

    The goal of an ACO, according to the article, is to improve the cost, quality and satisfaction of a particular population’s care.  The idea behind an ACO is that physicians, hospitals and other organizations responsible for delivering healthcare will band together and offer to provide a complete care package to patients for a negotiated price. The details of ACO structures are yet to be determined, and they probably will vary greatly as providers design them.

    The potentially problematic Stark law prohibits referrals for certain designated health services by providers to entities in which they have a financial interest, unless certain exceptions are met.  That could be a problem for ACOs because their very premise is that the providers will all have a financial interest and will be working together to reduce costs and improve the patient’s care — which includes referring patients to one another.

    According to Belfort, guidance will come from CMS, with the release of new regulations addressing ACOs and Stark, by the end of the year.

    “The healthcare statute authorizes CMS to waive the provisions of the Stark law, but one of the questions is to what extent is CMS going to utilize that authority?” Belfort says in Hospital Compliance Watch.  “I think a lot of hospitals and physician groups are waiting to see what sort of waiver authority is going to be issued by CMS before they really know the landscape.  They could eliminate much of the conflict, or they might not.”