4 Points on Exclusivity, Market Power and Transparency in ACOs

Accountable care organization guidelines have yet to be released by the Department of Health and Human Services, Federal Trade Commission and Department of Justice, but many providers are nervous to see how the topics of physician collaborations, exclusivity and transparency will be treated when the waivers and safety zones finally are defined.

In the recent New England Journal of Medicine article "ACOs and the Enforcement of Fraud, Abuse, and Antitrust Laws," Robert F. Leibenluft, JD, discussed the complications surrounding physician collaboration, exclusivity and transparency in terms of ACOs. Here is an expansion on each of these topics and how they may impact ACO development.

1. Proponents and opponents of exclusivity. Some antitrust enforcers have suggested ACO physician networks be nonexclusive, permitting physicians to participate in other networks or contract with health plans directly. Generally, antitrust enforcers oppose exclusive arrangements because they see them as anti-competitive.

On the other hand, exclusivity may ensure physicians remain engaged in the ACO. It may also help prevent other networks from freeloading, or benefiting from the ACO's improved care without paying associated costs. Exclusivity would also allow an ACO to have more volume with the same number of providers, helping it pay for the high start-up costs.

2. Physicians, particularly specialists, present challenges to geographic markets. Physician collaboration is another point complicating ACO guidelines. Since there are fewer specialists than primary care physicians, specialists could easily manipulate the market if they align with only one ACO. Also, each separate market must be defined by each specialty, but there are disparities between them. Cardiac surgeons often compete in broader geographic markets than obstetricians, for instance.

3. Shifting focus for federal regulators. Additionally, as more physicians merge practices, seek hospital employment and form networks, antitrust enforcers may focus on whether arrangements result in undue market power. Agencies have done this with hospitals in the past two years, defining markets and the effects of competition, but have had little success since courts defined geographic markets broadly, according to the NEJM report.

4. Transparency on how guidelines are created. The issue of transparency in regards to antitrust enforcement and the analysis of arrangements has not received as much attention as the actual guidelines themselves. However, by sharing how the safe harbors and guidelines were drafted, providers will have more guidance on how to collaborate and abide by antitrust law.

Read more about legal issues surrounding ACOs:

- AHA Shows How 4 Key Federal Enforcement Laws Impair ACOs

- 5 Key Financial Challenges Hospitals Face Under ACOs, Other New Payment Arrangements

- 8 Aspects of UnitedHealthcare's Plans to Fund an ACO at Tucson Medical Center

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