The Affordable Care Act (ACA) and its effects on Healthcare Delivery – Part 2

Posted by | January 04, 2014 | No Comments

This article is part of a series:


Millions of additional insureds seeking healthcare from the same population of practicing physicians who are receiving ever-reducing reimbursement rates will cause physician practices to change rapidly and dramatically. The formation of Accountable Care Organizations (ACO) appears to be the root of the response to newly created physician reimbursement models. An ACO is a “healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients”*. The ACO becomes accountable for the quality, cost, and overall care provided.

ACO’s must meet significant regulations in order to exist. Because of this combined with the changes in the reimbursement models, it is estimated that the majority of physicians will eventually become employed by hospitals. However, predictions indicate that the substantial ACO regulations and measurement requirements might also lead hospitals to move away from the added liability and administration that large ACO’s could create.

The reimbursement system of an ACO is structured around rewarding and penalizing physicians/groups based on improvements in quality and performance. Qualitative and quantitative metrics that determine reimbursement levels include:

  • Patient Satisfaction Rating
  • Procedure Efficiency, Success/Failure Rates
  • Bundled Payment for Episodes of Care
    • Diagnosis to surgery to rehabilitation combined as one Episode of Care
  • Bonuses based on improvements in success and satisfaction rates

In order to reduce costs and increase success and satisfaction rates while incorporating the Bundled Payments metric, changes in the delivery of care must occur. Indications are leading toward changes relating to:

  • The location in which care is provided
  • The provider that delivers the care
  • The procedures that are provided

The changes created by the Affordable Care Act (ACA) are will certainly effect the liability landscape faced by medical practices as well. This topic will be addressed in Part 3 of this series.

Contact a professional liability insurance specialist at 800.457.7790 or visit our quick quote form to obtain a no-obligation free quote for your professional medical liability insurance. Diederich Healthcare understands the need to reduce a practice’s overhead expense and shopping for a new medical malpractice insurance carrier is one of the easiest ways to cut out unnecessary costs.

*Definition from Wikipedia The Free Encyclopedia

To contact the author, call 800-457-7790 and ask for Rob Cash.

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