Healthcare Business News

Two Texas systems plan ACO

By Melanie Evans
Posted: May 4, 2011 - 5:30 pm ET

Texas Health Resources and Methodist Health System said the two competing Texas health systems would jointly launch an accountable care organization.

Negotiations are in the early stages, said Texas Health spokesman Wendell Watson. Texas Health, based in Arlington, owns 13 hospitals including the 658-bed Texas Health Presbyterian Hospital Dallas. Methodist Health owns four hospitals with two in Dallas, where the system is headquartered. The partners' operations overlap slightly, but Texas Health and Methodist Health operate in largely separate markets, Watson said.

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“Geographically, the service areas of the two systems are complementary, Doug Hawthorne, Texas Health Resources CEO, said in a news release announcing the agreement. “Given today's challenging health care environment, it makes sense for us to look for opportunities to optimize resources and work together to improve the health of our communities.”

Accountable care organizations, loosely defined, agree to manage medical care and spending and are eligible for financial incentives if quality performance and costs meet certain targets. The CMS recently released proposed rules for the 2012 launch of Medicare accountable care under the Patient Protection and Affordable Care Act. Separately, the Justice Department and Federal Trade Commission proposed guidance for independent doctors and hospitals seeking to create accountable care networks without violating antitrust and fraud and abuse laws.

Watson said Texas Health and Methodist Health have yet to decide on whether to contract with Medicare as an accountable-care network. “It's too early to say,” he said. The partners have not yet determined a payment model, he said. The systems jointly sponsor a medical transportation company.

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