“Together, the Medicare Payment Advisory Commission … and [Elliot] Fisher provided the impetus for the current concept and interest in acos.”


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“[T]here can be no limitation on patient choice of provider at the point of service…. It is even possible that the Secretary could assign beneficiaries ‘invisibly’ (without their knowledge) to an ACO on the basis of concurrent fee-for-service claims that indicate where they receive the preponderance of their primary care services, as was done in the Medicare Physician Group Practice … demonstration. [I]t is possible that the ACO wouldn’t know which of its patients qualify it for shared savings payments.” [P 722]

  • “[T]here can be no limitation on patient choice of provider at the point of service…. It is even possible that the Secretary could assign beneficiaries ‘invisibly’ (without their knowledge) to an ACO on the basis of concurrent fee-for-service claims that indicate where they receive the preponderance of their primary care services, as was done in the Medicare Physician Group Practice … demonstration. [I]t is possible that the ACO wouldn’t know which of its patients qualify it for shared savings payments.” [P 722]

  • Robert A. Berenson, “Shared savings program for Accountable Care organizations: A bridge to nowhere?” American Journal of Managed Care, 2010; 16:721-726.



“[T]he following groups of providers of services and suppliers which have established a mechanism for shared governance are eligible to participate as ACOs under the program under this section:

  • “[T]he following groups of providers of services and suppliers which have established a mechanism for shared governance are eligible to participate as ACOs under the program under this section:

  • (A) ACO professionals in group practice arrangements.

  • (B) Networks of individual practices of ACO professionals.

  • (C) Partnerships or joint venture arrangements between hospitals and ACO professionals.

  • (D) Hospitals employing ACO professionals.

  • (E) Such other groups of providers of services and suppliers as the Secretary determines appropriate.”



“However, recent analysis of VHCURES data for the Health Care Reform Commission in Vermont has identified a major issue when this approach is taken with a younger population. That analysis found that approximately 40 percent of covered individuals do not have any contact with a primary care physician in a one-year period. If this finding is accurate, it raises the question of how to attribute those individuals. Further, if those individuals are not attributed and seek care, who will be financially responsible? How should their claims experience (if any) be used in calculation of premiums?”

  • “However, recent analysis of VHCURES data for the Health Care Reform Commission in Vermont has identified a major issue when this approach is taken with a younger population. That analysis found that approximately 40 percent of covered individuals do not have any contact with a primary care physician in a one-year period. If this finding is accurate, it raises the question of how to attribute those individuals. Further, if those individuals are not attributed and seek care, who will be financially responsible? How should their claims experience (if any) be used in calculation of premiums?”

  • William Hsiao et al., Act 128 Health System Reform Design: Achieving Affordable Universal Health Care in Vermont, P 108, http://www.leg.state.vt.us/jfo/healthcare/FINAL%20VT%20Draft%20Hsiao%20Report.pdf, accessed February 5, 2011.



FFS system is the problem, ergo, capitation (shifting insurance risk) is the solution.

  • FFS system is the problem, ergo, capitation (shifting insurance risk) is the solution.

  • But cannot shift risk to small clinics and hospitals, so it becomes necessary to justify consolidation (which in turn requires criticizing “fragmentation”).

  • Cannot shift risk if patients can seek care outside their HMO, so limited choice becomes essential.

  • Shifting risk creates incentive to deny care, which justifies report cards.



To justify capitation (shifting insurance risk), it helps to claim capitation will induce doctors to do more prevention and disease management.

  • To justify capitation (shifting insurance risk), it helps to claim capitation will induce doctors to do more prevention and disease management.

  • To justify all of the above – capitation, consolidation, loss of choice, and report cards – it helps to trash doctors (they refuse to do prevention, they order services patients don’t need, they won’t follow guidelines, they refuse to buy electronic medical records, etc.).



If report cards are necessary, then

  • If report cards are necessary, then

    • guidelines with which to measure quality become essential,
    • risk adjustment of “grades” becomes necessary which in turn justifies routine collection of medical records, which in turn justifies
    • universal and interoperable electronic medical records.


If capitation/premium payments to groups of providers is necessary, then risk adjustment of those payments becomes necessary, which (like report cards) justifies

  • If capitation/premium payments to groups of providers is necessary, then risk adjustment of those payments becomes necessary, which (like report cards) justifies

    • routine collection of medical records which in turn justifies
    • Universal adoption of interoperable electronic medical records.



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