Under the federal Affordable Care Act that was signed by President Barack Obama in March 2010 and upheld in June by the U.S. Supreme Court, the government can create accountable care organizations.
WellStar was approved to participate in July with all of its 400 medical group physicians plus about 400 other doctors with WellStar privileges who chose to participate.
“The program’s goal is to reduce Medicare expenditures by giving providers incentives to cooperate through an ACO, share information, and save money by avoiding unnecessary tests and procedures,” said David Cole, a partner at the law firm Freeman Mathis & Gary, and head of the labor and employment law and health care practice groups.
Under Medicare’s normal fee-for-service system, providers are paid more money for giving patients more tests and performing more procedures, Cole said.
Under the Shared Savings Program, providers are still paid for their services, but ACOs are eligible for bonuses if they save Medicare money by providing more efficient services.
“This bonus comes in the form of a percentage of the difference between the actual Medicare expenditures in year compared to a benchmark of expected Medicare expenditures for that same year,” Cole said.
“In other words, if the actual expenses are lower than the benchmark, then the ACO gets a cut. This way, providers can actually be paid for reducing the number of tests and procedures they perform, which under the traditional model would mean they’d be paid less,” Cole said.
This week, WellStar began notifying its more than 36,000 Medicare beneficiaries this week about the program. Patients have until Oct. 15 to opt out.
Barbara Corey, WellStar senior vice president managed care, said: “The data sharing allows the physician to have a more complete picture of the needs of their patient. In the event the patient opts out, the patient’s physician and therefore the patient will not have the benefit of this more-complete information when caring for that patient.
“The patient’s actual Medicare benefits will not be impacted one way or the other,” Corey said.
WellStar signed on for an initial three-year commitment.
Cole, the lawyer, said the program makes sense if the expected bonus payments are more than the startup costs of becoming an ACO.
“It is one of the few positive parts of ‘Obamacare,’ so long as we are going to have the statute and assuming it is not repealed after the election,” Cole said. “This part of the statute seemed to have more bipartisan support. … The program’s goals are good ones, but whether it works as intended, like other parts of the statute that are less controversial, remains to be seen.”