Transition to accountable care brings major risks

The healthcare industry’s transition to accountable care will require significant cultural and operational shifts, bringing new risks that many organizations have yet to fully identify and manage, according to a new white paper from Marsh, the insurance broker and risk management consulting practice based in New York City.

Healthcare organizations are steadily moving to form or join accountable care organizations (ACOs), as encouraged under the Patient Protection and Affordable Care Act (PPACA). ACOs are networks of health care organizations that aim to deliver cost savings and better patient outcomes through coordination across the healthcare continuum.

However, several activities associated with the transition to ACOs have the potential to expose organizations to new reputational, legal, and compliance risks. These include establishing provider networks, entering into new at-risk payer contracts, developing transitional care models, sharing data, and physician integration, Marsh warns in its report, A New Risk Management Frontier: Accountable Care Organizations. (The full Marsh report is available online at http://tinyurl.com/ACOreport. See the story on p. 141 for more details from the report.)

The movement to ACOs will bring changes that risk managers are not prepared for, says Donna Jennings, a vice president in Marsh Risk Consulting’s Clinical Healthcare Consulting Practice and one of the authors of the report. Aon’s 12th annual Hospital and Physician Professional Liability Benchmark Analysis, also released recently, concurs with that assessment. (See the story on p. 142 for more Aon’s report.)

“The new accountable care model holds 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,” Jennings says. “The key to mitigating the risks inherent in this transition lies in strengthening the culture of safety that supports risk management across the enterprise and in greater communication and coordination among risk managers, quality managers, and business leaders.”

While many of the exposures relating to ACOs also can be addressed through existing insurance solutions, organizations should ensure that any current insurance programs effectively protect them through the transition to accountable care, Jennings says. For example, risk managers should determine whether existing directors’ and officers’ liability policies respond to wrongful acts related to the selection of care models and whether existing cyber/data privacy policies address exposures for affiliated providers’ access to patient data. Underwriters, meanwhile, have demonstrated a clear interest in ensuring that the organizations they are insuring have well-defined plans for their transition to accountable care, says Holly Meidl, U.S. leader of Marsh’s HealthCare Practice and an author of the report.

“Now is the time for risk managers, working closely with their insurance advisors, to engage with underwriters to explain their strategies and objectives for accountable care,” Meidl says. “Communication early in the transition process will help to eliminate many ambiguities and uncertainties and ease underwriters’ doubts.”

Sources

  • Donna Jennings, Vice President, Marsh Risk Consulting’s Clinical Healthcare Consulting Practice, Atlanta. Telephone: (404) 539 8018. Email: donna.jennings@marsh.com.
  • Holly Meidl, U.S. Leader, Marsh HealthCare Practice, Nashville, TN. Telephone: (615) 340-2446. Email: hollis.d.meidl@marsh.com.