How is the ACO different from the HMO? The difference is merely cosmetic. The ACO is composed of physicians, other “providers,” and administrators. It contracts with the Center for Medicare and Medicaid Services (CMS) to provide care for selected beneficiaries. It receives a lump sum per patient per month from which all care is to be provided. Money not spent on care (“profit”) is split evenly between the ACO and CMS.(Read the full text of "Unaccountable Care Organizations".)
Money spent in excess of the “bundled” payment is a loss to the ACO. The ACO can also receive incentive payments for achieving (and reporting) certain “benchmarks” such as lowering blood pressure or cholesterol level. These “quality” indicators, which are based on large population studies, will almost certainly lead to over-treatment of individuals, particularly the elderly.
Like HMOs, ACOs will face very strong incentives to cherry pick the healthy and to limit access to specialty care, procedures, expensive drugs, and hospitals. These incentives are devastating to the truly ill. And the ACO is accountable to CMS, not to the patient!...