Will the rise of the accountable care organization (ACO) create a significant new reinsurance market?
Peter Robinson, a longtime health plan reinsurance broker, talked about the young ACO reinsurance market in a recent e-mail interview with LifeHealthPro.com.
The Patient Protection and Affordable Care Act of 2010 (PPACA) pushed the Centers for Medicare & Medicaid Services (CMS), an arm of the U.S. Department of Health and Human Services (HHS), to use ACOs to move the traditional Medicare program away from the fee-for-service approach to paying for care.
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When group physician practices experimented with accepting flat, “capitated” payments for each patient served in the 1990s, they collapsed. CMS wants the providers that participate in its Pioneer ACO program and its Medicare Shared Savings Program (MSSP) Track 2 ACO program to earn extra cash in exchange for accepting risk, but without imploding.
To guard against one problem that cropped up in the 1990s — complaints that some capitated physicians were keeping patients from getting necessary care — the ACO programs are supposed to reward the ACOs for providing good care as well as for providing efficient care.
Robinson’s company, ReSource Intermediaries, a unit of Integro, can help ACO managers manage risk by lining up ACO surety bonds and ACO reinsurance arrangements.
Robinson took time to answer a few questions about the ACO risk management niche.
Q: How easy has it been to line up a supply of reinsurance for ACOs?
A. The reinsurance market’s response is emerging. Certain markets have identified teams working on ACOs with significant actuarial depth while others look at ACOs through existing underwriting teams.
Predictably, the firms with focused teams and strong analytics are setting the bar for the market.