Proposed ACO Rules Attract Public Gripes

Cheryl Clark, for HealthLeaders Media , June 9, 2011

But, he continued, "the proposed clinical integration rules unnecessarily require resources that many physicians do not have but that hospitals do possess" leading to "the unintended consequence of encouraging and facilitating hospital consolidation of physician markets by acquiring physician practices."

Already, he wrote, hospitals are increasing their acquisition of physicians and group practices, giving hospitals "significant market power." In many cases these activities are small and occur "under the radar of antitrust enforcement."

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"It is critical that the U.S. Federal Trade Commission/Department of Justice set forth clear and common sense antitrust rules concerning the formation of ACOs so that physicians can pursue integration options that are not hospital driven."

And the American Hospital Association, representing more than 5,000 hospitals and healthcare organizations and 200,000 employed physicians, devoted three paragraphs to a favorable mentions, saying it likes the Antitrust Safety Zone for organizations with a primary service area share of the market below 30% (although it would prefer 35%), and "applauds" the agencies for recognizing that exclusivity does not always indicate anticompetitive behavior.

But in the rest of its 24 pages, AHA executive vice president Rick Pollack described the proposed rule as "deeply disappointing."

For starters, Pollack wrote, "CMS lacks the legal authority to issue regulations governing the application of the antitrust laws or to delegate to the DoJ or the FTC the authority to block certain ACOs. The first prospective ACO participant to be blocked by the agencies should have a viable cause of action against CMS as there is no precedent for this kind of backdoor approach to regulation."

Also, he said, it falls short of its own stated goals" in these ways:

• To apply to the agencies for ACO designation "will cost potentially several hundred thousands of dollars" because of required calculations.

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