Mark Lutes Comments on Private Insurers and ACOs

AIS's Health Reform Week

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 titled "Private Insurers May Diverge from Medicare in Forming ACOs Amid Consolidation Issues."

Following is an excerpt:

Lutes ... isn't as convinced that commercial insurers — many of which like CIGNA and the Blues plans have already taken advanced steps to form ACOs in the private sector — will adopt the Medicare model as their template. ...

Lutes doesn't think that either of these models would be "the starting point in the commercial sector." So many other targeted payment innovation opportunities are available to commercial payers that a global-type spending target (i.e., looking at total Medicare Parts A and B costs associated with Medicare beneficiaries that are attributed to primary care physicians or PCPs participating in the program) "is not necessarily going to be the first two or three things that commercial payers will attempt," he tells HRW.

"There are a lot of things that one can do in payment innovation that are more targeted and more easily implemented than" tackling global spending targets, Lutes explains, such as bundling payments for typical high-cost procedures, medical home incentives, or placing bonuses on various measures, such as hospital readmissions.

Lutes points out that the average commercial payer already has direct contract relationships with PCPs, allowing them to introduce amendments to incentivize additional care management of PCP populations "without necessarily having to go out and build a relationship with a new risk-bearing intermediary organization."