orative. It would have to apply for a cer- tificate of authority from TDI to be able to contract with private health plans or government programs, such as Medicaid and Medicare, to provide medical and health care services to a defined group of patients.
A collaborative also could contract
directly with employers to treat their workers so long as it does not assume risk for actuarial losses. To do that, the collaborative also must be licensed as a health plan. While the proposed Medicare ACOs
must meet a very specific and lengthy list of quality measures and use a limited number of payment methods, the Texas collaboratives would have much more flexibility to create their own innovative care delivery systems. “An ACO could be one type of collab- orative under SB 7. However, there is a spectrum of ways that providers may be able to collaborate to achieve healthy outcomes and cost savings,” Senator Nelson said. “Rather than limit provid- ers to the ACO model, SB 7 aims to give providers flexibility to develop various types of collaborative models. In con- trast to the Accountable Care Act, we are not creating any new mandates, and we are not expanding government.” Lee Spangler, JD, TMA vice president for medical economics, says the collab- oratives have complete flexibility on how physicians and other providers get paid. They can use fee for service, capitation, global payments, or bundled payments for episodes of care.
The collaboratives also have flexibility on how they measure quality and out- comes. While the proposed Medicare ACO rules would require those entities to meet quality standards on 64 different specific measures, the collaboratives set their own quality measures. While SB 7 creates a Texas Institute of Health Care Quality and Efficiency that would de- velop quality measures for potential use by the collaboratives, they would not be obligated to use those measures or they could pick and choose which they want, Mr. Spangler says.
State action required Dr. Lockhart says the antitrust protec-
tions are built on the “state action doc- trine,” which he says requires active at- torney general supervision of the activi- ties of the collaboratives. Mr. Spangler says the intent is for TDI
and the attorney general’s office to play such an active role in overseeing these entities that federal regulators won’t seek antitrust action against them be- cause the state has supplanted tradition- al competition with its own regulation. “Because the antitrust exemption re- volves around active state oversight, you basically have a continual applica- tion process,” he said. “You apply for the license; six months later you have to ap- ply for renewal. The department [TDI] is required to review that application for renewal as if it’s a brand new applica- tion. And then this happens every year. If you’re really a sophisticated entity, you will always be in the process of compil- ing that application. And the attorney general is there to ensure that these col- lections of competitors don’t get too big to enter the market.” Dr. Lockhart says that oversight elim- inates a major hurdle for groups that want to form a collaborative, particular- ly in smaller communities where it may be difficult to put together a collabora- tive without gaining a dominant share of the market.
TMA protects the physician voice It is not clear if physicians will em- brace the collaboratives. However, TMA worked closely with Senator Nelson to make sure physicians had a voice in gov- erning them and due process rights to protect them from retaliation for advo- cating for their patients’ best interests. “The whole thrust of our strategy was
to provide a structure that would enable the medical model,” Dr. Lockhart said. “The way to get physicians integral in the decision-making process is to give them an equal voice in the governance struc- ture, and that includes operations and payments. We feel like the bill achieves that objective.” The proposed federal rules potentially could give hospitals the vast majority of seats on an ACO governing board. Under the Texas law, the governing board mem- bership would be divided among physi-
cians and nonphysicians, plus neutral members chosen by both parties. Thanks to Representative Zerwas, the bill also prohibits collaboratives from us- ing covenants not to compete. Dr. Lockhart says the noncompete
clause provision is important because it protects a physician who joins a collab- orative and later decides to drop out of it from potentially having to close or leave his or her practice and move to another community. Finally, the bill preserves strong due
process protections. “You don’t want a manufactured complaint to be used as a mechanism to exclude a physician who is playing an advocacy role for a patient or playing an advocacy role as a physi- cian voice,” Dr. Lockhart said.
TDI gets $1 million grant for health insurance exchange
Gov. Rick Perry has made it clear he does not think Texas needs a health in- surance exchange called for under Presi- dent Obama’s health system reform law. That, however, did not stop the state from accepting a grant from the U.S. De- partment of Health and Human Services (HHS) to develop such an insurance exchange. According to an HHS spokesperson,
Texas was one of 49 states, the District of Columbia, and four territories that ac- cepted grants to help plan and operate exchanges. The Texas Department of Insurance (TDI) will use the $1 million grant to:
• Coordinate exchange planning efforts between TDI and the Texas Health and Human Services Commission;
• Examine specific circumstances of the state, such as the fact that Texas cur- rently has the highest percentage of uninsured (more than 26 percent) of any state, as well as the second high- est number of uninsured residents (more than 6 million); and
September 2011 TEXAS MEDICINE 33
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