He noted that The Everett Clinic, which has participated in demonstration projects for Medicare ACOs since 2005, has decided not to seek certification as an ACO under the Affordable Care Act. Instead the Washington State clinic will move its patients out of traditional Medicare and into the Medicare Advantage managed care program. "They just aren't seeing the financial rewards for taking better care of their patients," explains Parke.
A simpler organization structure is among the chief advantages of an integrated delivery system partnering providers with health plans. The rules aren't final, but ACOs will need to be a legal entity of some sort and agree to participate in the program for three years. Also, there are some legal challenges to overcome so the ACO can allocate start-up costs between the hospital and physicians. Physicians will need to have at least 5,000 Medicare fee-for-service patients.
According to the brief, there are fewer legal impediments to sharing expenses and allocating financial risk when a health plan is the intermediary between providers and beneficiaries. As part of a partnership, the health plan can provide the administrative and financial support necessary for the startup.