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Life Health > Health Insurance > Health Insurance

The Catch: Nov. 8

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Three companies have started a reinsurance program for the new Medicare accountable care organizations (ACOs).

The new reinsurance program will help organizations that participate in the Medicare ACO Shared Savings Program limit the risk of big losses, the companies say.

The companies are Star Line Group, East Falmouth, Mass., an underwriting manager; U.S. Advisors Inc., Brentwood, Tenn., a reinsurance broker; and Ascendant Care, Washington, a consulting firm.

An ACO is supposed to be an organization that gives doctors, hospitals and other ACO providers financial incentives to make the care for a medical condition as efficient as possible, to get away from the system of having an insurer or other payer encourage provider to drive up costs by billing separately for each service provided.

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 reimbursement strategies to reduce Medicare program costs.

CMS has developed the Medicare Shared Savings Program and another ACO program, the Pioneer ACO program.

The reinsurance program organizers recognize that one unique feature of the ACO program is that cash flow may be delayed, Star Line and the other companies say.

Ascendant Care would be responsible for reviewing ACO reinsurance candidates and monitoring their performance.

Mike Barrett, chief executive of Ascendant Care, says access to reinsurance should help expand the number of organizations that can participate in the Medicare Shared Savings Program.


Parents with children in Medicaid and Children’s Health Insurance Program (CHIP) plans may be about as happy with access to doctors and dentists as parents with children in enrolled in employer-sponsored plans are.

Michael Perry, a partner at Lake Research Partners Inc., Washington, has reported that finding in a report prepared for CMS.

Lake Research is a subcontractor for a firm that CMS commissioned to find how parents like Medicaid and CHIP coverage.

Pollsters conducted interviews of 1,936 parents under age 19 in households with incomes below 250% of the federal poverty level.

The survey team conducted 1,507 of the interviews in English and 429 in Spanish.

Researchers found that 628 of the parents had an uninsured child, 638 had children in Medicaid or CHIP plans, and 611 had children with employer-sponsored group plans.

Some of the parents with children in Medicaid or CHIP plans may not have had children in employer-sponsored group health plans, and the parents could not directly compared children’s provider access levels in government plans and employer plans.

But, when the researchers simply asked how the parents felt about their children’s coverage, the percentage of parents saying they were very or somewhat satisfied with coverage in general was 93% for those with children in Medicaid and CHIP plans and 91% for those with children in employer plans.

The percentage saying they were very or somewhat satisified about their ability to find a doctor who takes their children’s health insurance was 87% for Medicaid/CHIP plan parents and 95% for employer plan parents.

The percentage who said they were very or somewhat satisified about their ability to find a dentist who would take the child’s coverage was 77% for the Medicaid/CHIP parents and 77% for the employer plan parents.


ACOs could be a great thing, but letting hospitals and doctors get together to jack up prices would be bad.

Joe Miller, general counsel at America’s Health Insurance Plans (AHIP), Washington, makes that argument in a blog post  on the Health Affairs website.

Health Affairs is an academic journal that deals with the finance and delivery of health care.

Miller, who used to be an assistant chief in the U.S. Department of Justice antitrust division, says the antitrust guidance federal regulators recently issued in connection with the Medicare Shared Savings Plan ACO pilot program represent a “step in the wrong direction.”

The ACO program could save about $470 million over 4 years, but that’s not all that much, and weakening the rules that keep providers from teaming up to agree on prices could lead to new costs that exceed the savings, Miller writes.

“While the Medicare Shared Savings Program is a potentially useful step forward in providing incentives for better coordinated, less fragmented care, the danger to competition is real,” Miller says. “If ACOs prove to be just another health care acronym and passing fad their ultimate legacy could be further consolidated provider markets, and that would be a bad end for a promising idea.”


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