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  • Manatt Partner Discusses ACOs

    “Private Insurers May Diverge From Medicare in Forming ACOs Amid Consolidation Issues”
    AIS’s Health Reform Week

    April 11, 2011 – Atlantic Information Service’s Health Reform Week, the leading publication on the business implications of health industry reform, interviewed Manatt’s Robert D. Belfort, a healthcare partner in the firm’s New York City office. Belfort weighs in on the formation of accountable care organizations (ACOs) among private and commercial insurers, including the benefits of using Medicare’s standards.

    CMS recently established new criteria that Medicare ACOs must meet in order to share in savings with the federal government. As ACOs begin to develop in the private and commercial sectors, the structure and framework that each ACO will form remains a prevalent topic in the health industry.

    Belfort thinks insurers should use the Medicare standards as a starting point for commercial arrangements with ACOs.

    “I think the standards that CMS has established for participation in the Medicare Shared Savings   program are likely to become standards that are utilized heavily in the commercial sector. And the reason I think that is there’s a tremendous legal benefit in utilizing the Medicare standards in the commercial market from an antitrust, and even to some degree, from a fraud and abuse standpoint,” said Belfort.

    Earlier this year, the Department of Justice and the Federal Trade Commission released a proposed policy on how providers can form ACOs without breaching antitrust laws.

    Belfort says, “FTC and DOJ have said that if you are approved as an ACO by Medicare, by definition you are considered clinically integrated under the antitrust laws, and that means collective efforts by hospitals and doctors won’t be considered price-fixing if your market share is not that great – you will pretty much be insulated from antitrust review. And if your market shares are larger, you can get approvals from the antitrust agencies.”

    It remains unclear whether Medicare-approved ACOs that attract commercial payers will receive the same benefits of clinical integration should they adopt a different framework, “because it won’t be engaged in the same activities that Medicare constitutes as clinical integration,” says Belfort.