Coordination of Care or Conflict of Interest? Exempting ACOs from the Stark Law
New England Journal of Medicine Perspective Genevieve P. Kanter, Ph.D. and Mark V. Pauly, Ph.D. Suppose you are a Medicare-insured patient with coronary artery disease. You will visit, on average, 10 physicians at six practice sites in a given year.1 Such fragmentation of care has spurred efforts by health care systems and payers to coordinate the delivery of care by multiple providers in a range of settings. Hospitals and physician practices are merging at increasing rates to form integrated delivery systems with the goal of delivering harmonized services across the continuum of care — from initial primary care visit to hospital admission to nursing facility discharge. In addition, under the Affordable Care Act, hospitals and physician groups are encouraged to form accountable care organizations (ACOs) that jointly contract to deliver care to specified populations of Medicare beneficiaries. Care coordination has become a central theme of new payment and delivery systems and is believed to be an indispensable strategy for eliminating delivery inefficiencies, controlling costs, and improving outcomes. There is, however, at least one downside to care coordination arrangements: they clash with existing regulations on financial conflicts of interest in medicine. This set of regulations, collectively known as the Stark law, prohibits physicians from referring patients to providers when a financial arrangement would allow the referring physician to benefit from such a referral. For example, physicians who have a profit-sharing agreement with a nursing home are prohibited from referring their Medicare and […]
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