I was struck by a sense of déjà vu reading the July 10 Viewpoint essay by Harvey and Cohen in JAMA about the threat of liability for ACOs. It conjured up memories of countless hours spent in depositions and court cases during the late 90s and early 2000s, part of my earlier professional life as a health plan executive. These cases involved medical decision making by providers within the construct of managed care organizations acting as "agents" for the health plan, consistent with the relationship we can expect ACOs will have with health plans in the future.
The authors express concerns that ACOs will invariably become subject to the same liability MCOs experienced in the prior era of managed care. This is undoubtedly true; however, it is the health plans, not the ACOs, that should be most concerned. In my prior experience, MCOs were not the targets of the trial attorneys; rather, the litigators aggressively pursued the health plans and their large balance sheets. In fact, the MCOs, lacking the legal and financial stature to fight these cases, quickly lent their cooperation to the plaintiffs and in return avoided liability.
In my view, the prospect of liability, with whomever it sits, is not the central issue. Rather, the key policy and regulatory concern should be with striking the proper balance between cost containment, quality of care and consumer preferences in the first place. This requires balancing the conflicting and dynamic expectations of consumers, providers and health plans.
And how can we accomplish this?
First, as the authors suggest, we must link ACO performance in clinical quality and patient experience with utilization and costs. Unlike MCOs of the earlier managed care era, ACOs expect to be held to specific quality standards.
Second, ACOs must be required to earn the right to make medical coverage decisions by virtue of their performance, before they are given this responsibility.
Third, health plans must offer early stage alternatives to litigation such as rapid turnaround on medical decisions and grievances, mediation and arbitration.
And finally, state regulators must enforce rules and play referee to assure that ACOs, health plans and consumers have an opportunity to sort out their differences. If these provisions are effectively implemented, we can avoid the courts -- except as a last resort.