Accountable Care Organizations (ACOs) are defined as groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high-quality care to their Medicare patients and the chronically ill.  This is one of the ways the Affordable Care Act seeks to reduce health care costs – by encouraging doctors, hospitals and other health care providers to form networks which coordinate patient care and become eligible for bonuses when they deliver that care more efficiently.

ACOs have captured the interest of healthcare providers and many are feeling positive and have come to consensus in multiple areas. However, as with anything, there are pros and cons and what is now becoming apparent is that all of the changes happening to the healthcare delivery system could have far-reaching effects on the medical professional liability (MPL) insurance market simply because ACOs could increase risk for providers – obviously not something physicians can ignore.

On the plus side, these are some characteristics of ACOs that healthcare providers are feeling good about:

  • The goal of the ACO structure is to lower overall healthcare costs by creating an integrated set of resources to manage health and replace our current fragmented set of resources focused on caring for the sick.
  • Payment for healthcare delivery will be based on value instead of volume as it is today.
  • Healthcare providers organized in an ACO will be accountable for the outcomes they deliver, which is tied to the payment for value concept.
  • Provider alignment in clinical integration and enhanced evidence-based treatment options will lead to achieving the healthcare quality, outcomes and cost reduction goals.
  • Implementation of sophisticated information technology as the backbone of communication and care management.

With all of these great characteristics and many healthcare providers on board with it, where are the issues that may cause an increase medical malpractice exposure?  Below I have listed several areas of potential liability for providers working within an accountable care model as well as a few ideas that have been proposed to help mitigate these risks.

  • ACOs could increase the exposure to professional liability claims.
    • The idea of ACO’s is to improve efficiency and quality of care, which leads to a higher standard of care for the provider which could lead to a high standard expectation from the patient – ultimately increasing claims frequency if the higher expectations are not met.
    • ACO’s will also attempt to control costs, therefore procedures considered non-critical will be avoided, leading to fewer diagnostic tests, and in the end, potentially increasing exposure to liability claims due to failures to diagnose.
    • Patient-Centered Outcomes Research Institute (PCORI), an organization focused on comparative effectiveness research, may also affect the professional liability exposure.
      • PCORI will identify the most effective medical treatments and preventive medicine practices so that providers and patients will receive better evidence-based information which could lower the frequency of liability claims. However, on the downside, this could cause the exclusion of other treatments that physicians rely heavily on – which could potentially increase liability claims due to errors and omissions.

Improved coordination of care offers the potential for fewer medical errors but at the same time, it raises the bar of the patient’s expectation of a higher standard of care. Increased use of evidence-based medicine could further improve patient care while providing support in the defense of care providers. But as noted earlier there are insurance exposure risks involved in doing it this way and at this point the outcomes are not clear.

If these changes in delivery can help healthcare providers to increase the efficiency of care the MPL landscape could look very different in the near future.


Source Index:

  1. Clarity Group White Paper
  3. Milliman on ACA and Med/Mal