Lowering Risk for Commercial ACOs

By: Robert D. Belfort
– Hospital & Health Networks

While hospitals and medical groups are showing greater interest in creating accountable care organizations to participate in the Medicare Shared Savings Program, there is perhaps even greater enthusiasm for organizing ACOs to contract with private insurers. Commercial ACO arrangements are attractive to providers because insurers are less likely than Medicare to impose extensive governance, reporting and certification requirements on ACOs.

Private insurers also have greater flexibility than Medicare in tailoring the financial risk-sharing model and quality metrics of a value-based reimbursement contract to meet the unique needs and capacities of an individual ACO. But hospital-physician joint ventures pursuing commercial ACO contracts need to tread carefully. Although there may be fewer burdensome contract requirements imposed on commercial ACOs, the regulations under which these organizations operate are less certain.

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