Mark Lutes Quoted in Article About ACO Ventures

Mark Lutes, a Member of the Firm in the Health Care and Life Sciences practice in the Washington, DC, office, was quoted in an article about the recent ruling in Florida and its impact on ACO ventures.

According to the article, the recent ruling of a Florida-based federal judge who sided with 26 states in find­ing the law overhauling the nation's health care system unconstitutional, is unlikely to curtail general ACO formation that seems to "have a life of its own" and is proceeding nationwide, health care attorneys tell ABN.

Lutes tells ABN that states asserting they don't have to comply with Medicaid expansion under reform aren't precluded from taking a concept such as ACOs from within the law and applying it to Medicaid programs. He says some states are "desperate to do" that in light of budgetary woes.

Applying the ACO concept to Medicaid, while a "relatively unheralded concept," seems to be "proceed­ing apace" in states including New Jersey, Minnesota and Rhode Island (none of which were party to the Florida reform lawsuit), Lutes says. And he notes there are ele­ments of the ACO concept in legislation in Florida, a state that has taken an aggressive stance and is refusing fed­eral funding to implement the reform law.

At some level, providers and payers may become nervous about private, commercial ACO-like ventures in light of the Vinson ruling, Lutes says. But he says the ACO is "probably severable from the fate of the man­date," referring to a reform law provision requiring indi-viduals to buy health insurance or face financial penalties that was struck down by Vinson and a federal judge in Virginia.

"Even if the ACO is not ultimately severable, the [ACO] concept has a life of its own and is likely to be utilized by policymakers on both sides of the aisle going forward," Lutes asserts.

"It is an enviable place to be. Nobody in any of these rulings is arguing we don't have a quality and cost prob­lem in health care...and ACOs are a relatively uncontro­versial solution," Lutes tells ABN. How the program will be fine-tuned to achieve the effect that proponents hope for will be an ongoing question, he says. But the basic notion of asking network providers to think about bend­ing the cost curve is included in Medicaid legislation in several states and in the new Massachusetts health reform bill, he notes, [and] "so no one is fleeing from that concept at this point."

According to Lutes, the biggest threat, which he says he doesn't think is substantial, is whether the Medicare ACO program will be slowed down by the Vinson ruling or by what he describes as "the current tussle in Con­gress over budgetary issues."

"In the long run, this [ACO] concept is going to have its day," Lutes tells ABN.

The ACO concept is going to be implemented in four payment-stream contexts — Medicaid, commercial payers, people dually eligible for Medicare and Medicaid, and Medicare — and tested on cost and quality, and consumers and employers will decide whether they like it, he says.

Lutes said Feb. 21 he doesn't think that Vinson's ruling is a drag on CMS's ability to issue Medicare ACO regulations soon. "Hopefully [the delay in the release of ACO regs] suggests there is a range of robust options being prepared for comment, which is a good thing," he says. "You wouldn't want all this excitement built up around a program that is too narrow."