ACOs' Failure to Launch

May 13, 2011

Another provision of the health care law is failing to live up to its lofty promises. Accountable Care Organizations (ACOs), described in a seven-page provision included in the law designed to lower costs for Medicare recipients, are having difficulty attracting interest from possible participants. ACOs are networks of doctors and hospitals designed to coordinate and manage various health services for at least 5,000 Medicare patients.

However, according to the Associated Press, "an umbrella group representing premier organizations such as the Mayo Clinic wrote the administration Wednesday saying that more than 90 percent of its members would not participate, because the rules as written are so onerous it would be nearly impossible for them to succeed."

The article continues, "The regulations are ‘overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive,' the medical group association said in its letter. One of the major problems seems to be that medical groups have little experience in managing insurance risk, and the administration blueprint rapidly exposes them to potential financial losses."

Proponents of the health reforms continuously touted the law's provisions to provide Medicare savings, but it appears this promise is once again falling short of the hype.--

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