ACOs Could Raise Legal Issues for Physicians, Practices

October 18, 2012

Prior to participating in an ACO, consider these potential legal issues.

If you are considering participating in an accountable care organization (ACO), there are some serious legal issues to think about.

That’s according to a new report from insurance broker and risk management advising firm Marsh. The report, ANew Risk Management Frontier: Accountable Care Organizations, notes that several activities associated with transitioning to ACOs could expose organizations to “reputational, legal, and compliance risks.”

ACOs hold “great promise for the industry, but many organizations have yet to explore the full impact of the transition to accountable care on their operations and risk management programs,” Donna Jennings, a coauthor of the report and a vice president in Marsh Risk Consulting’s Clinical Healthcare Consulting Practice, said in a statement.

Here’s an overview of four of the risk factors highlighted in the report:

1. Partnership problems.To participate in an ACO, various health systems - from small practices to large hospitals - will partner up to improve care coordination and care quality, and reduce healthcare costs.

Deciding which organizations to partner with, and determining how to share payments and expenses, can carry “significant” risks if not done appropriately, according to the report. Those risks include antitrust allegations; contractual liabilities; and lawsuits from patients, competitors, and regulators.

Moreover, the report states that “If mergers and acquisitions are involved in the formation of the network, participating organizations could also face transactional risks.”

2. Delivery errors. Along with partnering up with other healthcare organizations to improve care coordination, efforts to improve coordination in ACOs will also “require new behavior” among physicians and staff members, according to the report. 

While the report states that in the long-term ACOs hold great promise, in the short-term “realigning organizational resources (including personnel), redefining measurements to track patient care and expenses, and establishing new processes and best practices could increase the risk of errors in delivery of medical services.”

3. Data breaches. To successfully track patients through the care continuum and improve care provided, ACO participants will need to better and more quickly share data across healthcare systems. While this will likely improve patient care, it also increases the risk of a data breach, according to the report.

4. Integration issues. Physicians participating in ACOs will need to work more closely with hospitals to improve care coordination and make shared decisions in an effort to reduce care costs while improving care quality.

This could raise some malpractice-related issues, according to the report. It states that “Depending on the nature of their agreements with physicians, hospitals and the ACOs in which they participate could face added risks, notably medical professional liability (medical malpractice) exposures.” 

Which of the above issues do you think is most concerning to physicians considering ACO participation?