Annals of Health Law
READY OR NOT
employed by the hospital.234 However, even with an employment
arrangement, frustrations to alignment may persist as contracts may still
incentivize quantity to the detriment of quality care or patient satisfaction
goals.235 Thus, as new payment reforms like VBP orient hospitals and
health systems toward coordinated and integrated care, most of these
providers will need to alter relationships with physicians.236 In order to
most strategically position itself for a shared savings program, a hospital
should successfully engage a physician group, regardless of employment
status, who will commit to providing a new model of evidence-based, high
quality, efficient care.237
Even where hospital administration and physicians alike agree that
alignment is desirable, they face significant legal obstacles in undertaking
shared savings arrangements. The rising popularity and health industry
interest in the Accountable Care Organization (ACO)238 model offers a
compelling illustration as to why shared savings is both critical to VBP
success, yet difficult to legally structure. That is, the potential of an ACO
to demonstrate improved care through shared savings is dependent on the
ACO’s “built-in” waivers of fraud violations (participants are legally
excused from what would amount to illegal kickbacks and remuneration
234. See Anderson & Nedza, supra note 8, at 60 (suggesting that without an
employment arrangement, it is difficult in practice for hospitals to influence physicians by
“simply coaxing, cajoling, scolding”). For additional discussions regarding
hospital/physician alignment challenges as they relate to compensation models, see
Anderson & Wilson, supra note 45 (recommending how to structure compensation to
maximize quality performance under new payment models); Youngstrom, supra note 93
(hospitals that employ physicians are better situated to encourage and motivate performance
but even the employment model may not provide enough incentive to meet new
reimbursement benchmarks).
235. See Lindsay Dunn, Bridging the Gap Between Fee-for-Service and Value-Based
Care Starts with Physician Feedback, BECKERS’ HOSPITAL REVIEW (Feb. 15, 2012),
available at http://www.beckershospitalreview.com/hospital-management-administration/
bridging-the-gap-between-fee-for-service-and-value-based-care-starts-with-physician-feedback.html; see also Anderson & Nedza, supra note 8, at 36; Anderson & Wilson, supra
note 45, at 38 (stating that under the new models of care, employment by itself will not result
in the health care delivery changes that are required to perform well under VBP).
236. See Dunn, supra note 235 (noting increasing physician concern regarding
reimbursement changes has caused physicians to “run for the shade” and seek hospital
employment where they are typically welcomed as part of hospital integration strategy).
237. See Anderson & Wilson, supra note 45, at 38.
238. For an overview of ACOs, see Accountable Care Organizations, CTRS. FOR
MEDICARE & MEDICAID SERVS., https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/ index.html?redirect=/ACO/; for an informative discussion regarding ACOs,
see Jenny Gold, Accountable Care Organizations, Explained, NAT’L PUB. RADIO (Jan.
2012), available at http://www.npr.org/2011/04/01/132937232/accountable-care-
organizations-explained.
