Joint Contracting Key Component of Clinical Integration Program

Wednesday, June 20th, 2012
This post was written by Cheryl Miller

Joint contracting is the ‘glue’ that keeps the Advocate Physician Partners (APP) clinical integration program together, explains Mark Shields, MD, MBA, APP senior medical director and vice president of medical management for Advocate Health Care.

To put together our clinical integration (CI) program, we have negotiated with all of the carriers in our marketplace. There are 10 clinically integrated contracts with our 10 lead carriers. The funding of the CI programs is based on a percentage of allowable physician billings. That is how we create the cash flow for our pay for performance (PFP) program and key infrastructure. The key component of CI is that our quality, patient safety and cost-effectiveness measures are the same across all of the health plans. Our program covers both risk contracts and FFS contracts. Therefore, both health maintenance organization (HMO) and preferred provider organization (PPO) contracts are covered.

We negotiate both base and incentive compensation for physicians. The key component to drive outcome is that the same measures and thresholds of performance are common across all of these contracts. That allows the providers to overcome what has been referred to as a “Tower of Babel” in the past. Even when different insurance companies had similar measures in their PFP programs, the thresholds and methods to collect and report the data were different. It became so confusing for providers that they were not able to focus on performance improvement. They threw up their hands and said, “Well, let the chips fall where they may.”

By having the common set of measures across all of the payors, we are able to develop tools and common reporting systems to drive change. This is our definition of CI: physicians across specialties working together with hospitals to drive quality, patient safety and cost-effectiveness. Joint contracting is a critical component of CI; it is the key glue to keep the program together. Joint contracting has been a key issue that has engaged APP in discussions with regulators, particularly the Federal Trade Commission (FTC). They have given us approval to continue with this CI program, and that is important for others who are thinking about doing this kind of program. It passes not only market acceptance, but also regulatory acceptance.

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