Large employers are expressing concerns to the CMS that accountable care organizations could lead to further provider consolidation and higher healthcare costs, according to a newly released letter.
Large employers air doubts about ACOs
The Pacific Business Group on Health, representing 50 large purchasers of healthcare including Boeing, Chevron Corp., Target Corp., Safeway, Wells Fargo and General Electric Co., is urging the CMS to include certain safeguards in its forthcoming proposed regulations on ACOs. The proposed rules are expected to be issued shortly.
“There are many benefits of improving integration and coordination, but there are potential side effects,” David Lansky, president and CEO of the Pacific Business Group on Health, wrote in the five-page letter to CMS Administrator Don Berwick. “If the creation of an ACO in a particular community results in significant market power for the new entity, it creates the potential for pricing above competitive levels.”
The CMS regulations should explicitly state that the creation of an ACO should not increase market power of affiliated hospitals and physicians, and the Federal Trade Commission and Justice Department should conduct reviews of proposed ACOs prior to their approval, according to the letter.
The San Francisco-based employer group is also requesting transparency in quality measures and costs for participating individual physicians and facilities. And lastly, the group recommends the CMS take steps to ensure that ACOs don’t hasten further cost-shifting to the private sector. One suggestion is to implement a performance reward program that provides a 10%-20% differential bonus to multipayer ACOs that include private carriers, according to the letter.
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