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How Will ACOs Share Liability Risk?

One of the key concepts in the formation of — and probably the success of — accountable care organizations is shared risk. A pivotal part of the Affordable Care Act’s plan to reform an expensive health care system, ACOs are networks of doctors, hospitals and other providers that coordinate care and share responsibility and financial risk.

Like their predecessors in health care’s parade of acronyms — HMOs and MCOs — ACOs will need to balance quality patient care with saving money. When that balance is questioned by consumers and inevitably by the courts, how, exactly, will the risk be shared?

The question is posed in a July 10 Viewpoint article in the Journal of the American Medical Association by H. Benjamin Harvey, a physician and attorney at Massachusetts General Hospital, and Glenn Cohen, an attorney at Harvard Law School. The authors point out that managed care organizations have some liability protection from the Employee Retirement Income Security Act, but ACOs will not have the same level of protection.

Harvey and Cohen conclude their essay, “The Looming Threat of Liability for Accountable Care Organizations and What to Do About It,” with the suggestion that “innovation may be stymied by the threat of an uncertain liability environment.”

We asked stakeholders what could or should be done at policy-making levels — ranging from congressional and state legislatures to ACO leadership — to encourage innovation while balancing quality of care and cost-effectiveness in ACOs.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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