HCP National Insurance Services, Aliso Viejo, Calif., is now offering accountable care organization reinsurance for participants in the Medicare Shared Savings Program.
The company, which also specializes in providing medical malpractice insurance, described reinsurance for ACOs as “a big growth area” for the company in a news release.
The reinsurance is designed to cover shortfalls if an ACO goes over budget.
“There are no bonds available for this product, and often cash or (letters of credit) do not make sense. This leaves ACO reinsurance, also known as ACO Stop Loss Reinsurance, as the best option,” said William Dyer, VP and ACO reinsurance expert at HCP, in a statement. “The ACO has a limited downside risk which is paid to cover CMS if the ACO exceeds the targeted budget. This downside risk can be backstopped by ACO reinsurance, which seems the best option. The ACO reinsurance premium is deductible to the ACO, and, of course, it is less costly than cash.”
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