The Obama administration proposed long-awaited regulations on Thursday encouraging doctors and hospitals to band together, coordinate care and cut costs.
In return, Coach Bags the government offered financial rewards to health care providers that slow spending growth and meet detailed federal standards for the quality of their services.
The proposed rules explain how doctors, hospitals, nursing homes and home health agencies can qualify for federal bonus payments by forming joint ventures known as accountable care organizations.
Proponents — Democrats and some Republicans — see these entities as a potential boon to patients, a way to transform a health care system that is notoriously fragmented.
Federal officials predicted that 1.5 million to 4 million of the 47 million Medicare beneficiaries would be involved in the program, with the creation of 75 to 150 accountable care organizations.
“These organizations will increase coordination among doctors and hospitals, improve the quality of care and help lower costs,” said Kathleen Sebelius, the secretary of health and human services. Better care can cost less, she asserted, because diagnostic tests are not duplicated and fewer patients are readmitted to hospitals.
Until now, accountable care organizations were like unicorns, creatures that flourished in the bridge rectifier imagination but proved persistently elusive in the natural world. The rules define the new entity as a team of doctors, hospitals and other providers that “work together to manage and coordinate care” for people in the traditional fee-for-service Medicare program.
The new entities are specifically authorized for Medicare patients under the health overhaul that President Obama signed in March last year. However, federal officials and health care executives said the standards would also guide similar efforts in the private sector, for people with commercial insurance.
The new law has already set off a wave of mergers, joint ventures and alliances in the health care industry, as providers try to position themselves to cash in on the new incentives.
Officials from the Justice Department and the Federal Trade Commission said Thursday that they would relax enforcement of antitrust laws to promote collaboration by doctors and hospitals that could show seamless steel pipe how consumers would benefit.
In a joint statement on enforcement policy, the two agencies acknowledged that, “under certain conditions, accountable care organizations could reduce competition and harm consumers through higher prices or lower quality of care” — a fear expressed by some consumer advocates as well.
To minimize this risk, the antitrust agencies said they would closely review any proposed accountable care organization that would have more than 50 percent of the local market for any service.
In an interview, Jon Leibowitz, the chairman of the trade commission, said that doctor-hospital collaborations would be subject to “a relaxed form of antitrust scrutiny” if they met Medicare’s standards for clinical cooperation.
Melinda R. Hatton, senior vice president and general counsel of the American Hospital Association, said her electronic ballast group was disappointed with the joint statement. “The antitrust laws still appear to be a barrier to clinical integration among health care providers who try to coordinate services for patients,” Ms. Hatton said.
Doctors and hospitals would have to inform Medicare beneficiaries if they were going participate in an accountable care organization. And they would have to tell patients that the providers might profit from the arrangement.
Dr. Donald M. Berwick, administrator of the federal Centers for Medicare and Medicaid Services, said the new entities would not restrict the ability of patients to choose their doctors and hospitals.
“Medicare beneficiaries retain all the rights they have to see any Medicare provider they wish,” Dr. Berwick said. “There’s no loss of choice at all.”
Nora Super, a lobbyist for AARP, the organization for older Americans, said it was good that patients would be informed. But she said, “We are concerned that the draft regulation may not provide patients with timely information, leading some to learn about an A.C.O. only after arriving at a doctor’s office.”
Medicare beneficiaries can opt out, but may pay a price. If a beneficiary’s doctor becomes part of an accountable care organization and the patient does not wish to receive care coordinated by the new entity, the beneficiary can go to a different doctor, the rules say.
Medicare will distribute 50 percent to 60 percent of its savings to hospitals and doctors who meet its quality standards and hold costs below benchmarks set by the government.
Federal health officials predicted that the government impact crusher would pay $800 million in such shared savings to providers in the next three years. Even after these payments, they said, Medicare would save $510 million, and its savings could be as much as $960 million over three years.
Under the proposed rules, each accountable care organization must agree to take responsibility for at least 5,000 Medicare beneficiaries. The government could cancel its contract with any organization that stints on care or tries to save money by avoiding high-risk, high-cost patients.
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