NU Online News Service, June 15, 2:47 p.m. EDT

One aspect of healthcare reform promotes the formation of provider organizations aimed at improving the quality of care and cost, but medical-malpractice insurers worry it could have a negative impact on their business, a recent broker’s report suggests.

In a recent examination of the healthcare market, Kansas City, Mo.-based insurance broker Lockton reviewed how, under the Patient Protection and Affordable Care Act, healthcare providers can promote better care and service.

The report notes that the Medicare Shared Savings Program promotes the formation and operation of accountable care organizations (ACOs) aimed at serving Medicare fee-for-services beneficiaries.

An ACO is an organization of healthcare providers that agrees to be “accountable for the quality, cost and overall care of Medicare beneficiaries who are assigned to it.”

Among medical-malpractice insurers’ concerns cited by Lockton:

Will widespread consolidation of providers and their risk-financing programs result in malpractice insurers getting squeezed out of the market?
Will it promote the formation of captives and other alternative-financing vehicles?
Will plaintiff attorneys aim more aggressively at an ACO hospital-sponsored program under the assumption that there are higher limits than with a solo or small group practice?
Will underwriters have clearly defined provider relationships or will there be gray lines?
With the move to a quality-based payment system requiring evidence-based care, will the industry move to national standards of care instead of community standards? Will this impact the tort system?

The report says management-liability underwriters and brokers have expressed concern that forming ACOs could raise regulatory concerns. A number of federal agencies, including the Department of Health and Human Services, have released new rules and guidance documents aimed at alleviating “management liability concerns.”

Special Reports /

Could Promoting Efficiency Negatively Affect Med-Mal Insurers?

Related Stories

Recommended For You