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Doctors: Watch out for these ACO legal issues

The concept of an accountable care organization (ACO) has been around for a long time, but these days it's coming into its own, in part because of language in the ACA itself. Medicare and Medicaid are now focusing increasingly about paying for value, and allowing providers to participate in the benefits of improved care through the Shared Savings Program.

But physicians aren't always in the best position when they consider ACO participation, says Kathryn Hickner-Cruz, managing partner with the Cleveland offices of the Dresevic, Gustafson, Iwrey, Kalmowitz & Pendleton Law Group a division of The Health Law Partners. What Hickner-Cruz does for doctors is they go over these agreements and highlights the risks for them.

"There's obviously the political risks -- who they're going to work with, different referral streams and that type of thing -- but then there's also the downside financial risk, potentially, of participating in the ACO. That might be under the agreement with the government or it might be within ACO," said Hickner-Cruz.

Here's some of what she shares with her physician clients when they ask about ACO participation.

No wiggle room

First, bear in mind that you won't have a lot of wiggle room in your contract, she notes. "Physicians are typically handed form agreements, so they're not going to have a lot of leverage," Hickner-Cruz says. "If that ACO is going out to say, 1,000 physicians, they're not going to let that physician negotiate their arrangement."

Watch for extra restrictions 

Be aware that ACO's can impose requirements on the physicians which are more stringent than the government's Shared Savings Program requirements.

Also, be warned: ACOs can choose to put certain risks on physicians "to bring them in line, and encourage physicians to do what they want them to do," Hickner-Cruz says. "We encourage physicians to have the operating agreement looked at."

Make sure it's compliant

Hickner-Cruz encourages doctors are aware that not all ACOs are going to be on equally solid ground legally. 

"ACOs need to be aware that just because they're being embraced by the government, that doesn't give them a free pass to do whatever they want to coordinate care,"  she says."They do still have to comply with the fraud and abuse laws. We make sure to encourage physicians to make sure that they have aligned themselves with an organization that's thinking long term and setting things up the right way."

Know your exit strategy

It's good for physicians to know their exit strategy from the outset of their participation in an ACO, Hickner-Cruz tells her clients. There's several important questions that need answering.

"Are these physicians locked in for a number of years, or can they terminate for cause or on 30 days notice? If they terminate are they subject to a noncompete? Can they participate in more than one ACO? You need to walk through these things."

Filed Under: Policy & Regulation Practice Management
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