Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Health Insurance > Your Practice

The Catch: Oct. 11

Your article was successfully shared with the contacts you provided.

Many U.S. physicians still have no idea what an accountable care organization (ACO) really is.

Kunal Pandya, an analyst at Aite Group L.L.C., Boston, makes that observation in a new report on the ACO effort.

An ACO is supposed to be a vehicle for paying teams of health care providers to provide and manage care for whole patients, instead of paying for care one service at a time.

The Patient Protection and Affordable Care Act of 2010 (PPACA) requires the Centers for Medicare & Medicaid Services (CMS) to try using ACOs and other new approaches to paying doctors and hospitals to get providers to work harder at paying attention to the cost of care, and the ratio of value to cost.

CMS has announced two major ACO pilot projects, and private carriers also have been testing ACOs. Providers have been slow to sign up for the projects, in part because awareness levels in the provider community, and providers have no understanding of the ways they could benefit from participating, Pandya says.


Just as food manufacturers are trying to hold apparent food prices down by reducing the amount of food in a typical package, health insurers and employer plan sponsors are trying to hold plan prices down by reducing the amount of care each plan covers.

Health coverage “benefit buydowns” should cut commercial health plan premium rate increases to 5.5% in 2012, from 8% without buydowns, according to Sherlock Company, Gwynedd, Pa.

For 2011, the average expected increase was 10% without buydowns and 7% with buydowns, Sherlock says.

Sherlock has based those estimates on a survey of 73 plans that cover about 30 million commercial plan enrollees.

The medical trend, or increase in underlying health care costs, could be 8.8% in 2012. A year ago, carriers were predicting the medical trend for 2011 would be about 11%.


The American Medical Association (AMA), Chicago, says it will be advertising on radio and television to mobilize consumers and doctors to act against a looming change in the Medicare physician payment formula.

If Congress does not act, the reimbursement rate will fall about 30% Jan. 1, 2012, the AMA says.

Congress has been working for more than a year on restructuring the Medicare physician reimbursement system and averting steep reimbursement cuts by approving temporary “doc fix” measures.

The AMA’s national television and radio ads encourage listeners to call members of Congress to urge them to “protect access to care for Medicare patients,” the AMA says.


Brad Joondeph of the ACA Litigation Blog, a blog that covers PPACA-related litigation, has handicapped the likelihood that the U.S. Supreme Court will take up various legal questions posed in the writs asking it to review challenges to the constitutionality of PPACA.

Joondeph thinks there’s a 99% chance that the court will consider whether Congress has the authority under the Commerce Clause of the U.S. Constitution to make people choose between buying a minimum level of health coverage or paying a penalty.

“There is a clear split of authority in the lower courts; and the United States has asked the court to grant review,” Joondeph says. “If there is a constellation of factors that guarantees certiorari, this is it.”

Joondeph says there may be only a 5% chance that the court will consider, “Whether the [act’s] employer mandates are unconstitutional as applied to private employers.”

Only one party, Liberty University, has asked the Supreme Court to look at the provision that requires employers to provide a minimum level of affordable health benefits or else pay a penalty.

“Almost everyone seems to think that regulating employers’ provision of health insurance–actors who are plainly engaged in commercial activity–is well within Congress’s commerce power,” Joondeph says.


- The Senate Health, Education, Labor and Pensions Committee will hold a hearing on chronic disease prevention at 2 p.m. ET Wednesday. The witness list includes Dr. Howard Koh of the U.S. Department of Health and Human Services and Tevi Troy of the Hudson Institute, Washington.

- The Senate Special Committee on Aging will hold a Medicare reform hearing at 2 p.m. EDT Wednesday. A witness list was not available at press time.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.