This guide is for employers and other health care purchasers who 1) are interested in the accountable care organization (ACO) model for their population and are looking for a prime health plan partner, or 2) have a population that is affected by their health plan’s ACO arrangements and want to know how effective they are. This guide outlines CPR’s Standardized Plan ACO Reporting for Customers (SPARC), which includes resources that purchasers can use to find the right health plan partner and/or to hold their health plan partner accountable for reporting the results and impact of their ACO arrangements on the purchaser and their population.
- Process of Developing the SPARC
- General Considerations
- Standardized Plan ACO Reporting for Customers
Disclaimer: Engaging with health plans about their contracted accountable care organizations may result in individual negotiations on various provisions. Catalyst for Payment Reform is not providing legal advice or direction on how to address these specific negotiations. The tools provided in this guide are for information purposes only. Before any decisions are made as to whether to use these tools in whole or in part and to understand the legal implications of doing so, employer-purchasers should consult with a qualified legal professional for specific advice.
Process of Developing the SPARC
Purpose & Goals
In September 2016, Catalyst for Payment Reform (CPR) brought together a group of seven employers and other health care purchasers with a shared interest in developing a better understanding their health plan’s ACO arrangements.
With the drive toward population-based care, health plans are increasingly offering accountable care organizations (ACOs) to their purchaser-customers. Some health plans automatically attribute many purchasers’ populations to these programs. Others offer ACOs as insurance products. In either case, purchasers have found that there’s a lack of transparency about how these programs are designed and their results. The reports purchasers receive from health plans vary significantly; metrics often seem cherry picked to focus on positive results and some display information that is not relevant or meaningful to the purchaser. CPR convened the group of seven purchasers and a subject matter expert to develop a set of resources to hold health plans accountable for greater transparency into their ACO arrangements–SPARC.
These resources can be used by purchasers of health care to evaluate health plan strategies, to ensure they are delivering on their promise, and to assess the impact of these arrangements. Larger purchasers with greater purchasing power and leverage may be more likely to succeed at using these tools with their health plan(s), particularly the Standard Plan ACO Report. However, as use of these resources becomes more common, and therefore standardized, smaller purchasers may also succeed at getting their contracted health plans to report to them in the same way.
CPR’s ACO Collaborative
From September 2016 through September 2017, the purchaser participants, along with CPR staff and a subject matter expert, met monthly. During these meetings, the group discussed the state of the ACO movement, heard from other employers with ACO experience, listened to insights from ACO representatives, conferred on the metrics they would like to have as part of their own health plans’ ACO arrangements—including measures of quality, costs and utilization—and the level of transparency and reporting they need on these arrangements. From these various discussions, CPR staff worked with the participants and subject matter expert to develop a series of tools purchasers could use to establish a dynamic with health plan partners that facilitates purchasers’ insight into how their health plan’s ACOs are faring.
Participants & Funding
CPR would like to thank our participants, our subject matter expert* and the Peterson Center on Healthcare for participating in and supporting this process and contributing to the development of these tools. A list of the contributors is below.
Jon Camire, Equity Healthcare LLC
Anna Fallieras, General Electric
Rob Paczkowski, Google
Henry Wei, Google
Debra Pynchon, Lenovo
Kate Farley, Pennsylvania Employees Benefit Trust Fund
Jennie Pao, Pitney Bowes Inc.
Jeff Levin-Scherz, Willis Towers Watson*
A special thanks to the Peterson Center on Healthcare for sponsoring this effort.
Throughout the year, the group learned about and debated many important aspects of ACOs and came to an agreement on how to incorporate these insights into the tools.
The group was initially dissatisfied when reviewing the sets of quality measures that health plans use to assess ACO performance. The group uncovered a lack of standardization across plans and a lack of quality measures that address the highest spend areas for purchasers in the commercial market or aspects of clinical care where these purchasers have seen the greatest variation in quality. In many cases, the use of patient experience of care measures or patient-reported outcomes was strikingly absent. As a result, the group felt it was important to develop a list of standard quality measures that would give them the insights they need and serve as the basis for the reporting that they would seek from health plans on the quality results of their ACO arrangements.
CPR began by examining the applicability to the ACO context of its Employer-Purchaser Priority Measure Set, which consists of 30 quality measures that together address the top clinical areas of concern for purchasers in the commercial market (those where they spend the most and also experience the greatest variation in quality and costs). Around the same time, the Integrated Healthcare Association (IHA) and the Pacific Business Group on Health (PBGH) began the Commercial ACO Measurement Initiative to develop a standard measurement program for ACOs in California. This effort drew on the IHA Value Based Pay for Performance (VBP4P) Measure Set, the PBGH Meaningful Measures Set, the CPR Employer-Purchaser Priority Measure Set, and the Centers for Medicare and Medicaid Services-America’s Health Insurance Plans ACO and Patient-Centered Medical Home / Primary Care Measures. The goal was to create a list of essential metrics to align measurement and drive performance improvement efforts in ACOs.
To reduce confusion in the marketplace, CPR and the participants of its ACO Collaborative agreed to adopt the IHA-PBGH ACO Measure Set, which includes key cost and utilization metrics, in addition to quality. We chose this measure set because it represents the most comprehensive effort to date and it also considers the priorities of purchasers.
The CPR ACO Collaborative incorporated the IHA-PBGH ACO Measure Set into the resources referenced in this Guide. The SPARC strongly communicates to health plans the measures on which employer-purchasers would like to see ACOs evaluated. While some measures need further development (e.g. patient reported outcomes), purchasers should ask health plans to track and report the performance of their ACOs using this list of measures, even if it may take a year or two before the health plan is able to report on all of them. These requests will help drive toward measurement that is more meaningful and tracks critical areas for care improvement.
Attribution & Product Model ACOs
Health plans offer two types of ACO programs—attribution-based plans and product model ACOs. We highlight this distinction in the tools as some metrics are more applicable to one model than the other.
What is an attribution model ACO?
In an attribution model ACO, the health plan assigns employees and their dependents to an ACO based on the number of encounters they have had with a provider in the ACO during a certain time period. Attribution methodologies vary from health plan to health plan. For example, an employer-purchaser may offer a Preferred Provider Organization (PPO) to their members. If one of the eligible members of the plan has one or more encounters with an in-network provider who is in an ACO arrangement with the health plan, then the health plan may attribute that member to that ACO provider, holding that provider financially accountable for the cost and quality of the patient’s care. In such an arrangement, members are likely unaware that they are attributed to the ACO and may not have financial incentives, such as lower co-payments, to seek care specifically from ACO providers. The upside of this model is that patients can seek care from whomever they choose in the broader PPO network. The downside is that the ACO has little ability to control where its attributed population seeks care, making it difficult to manage and oversee their care. This attribution model is currently more common, affecting more covered lives, than product model ACOs.
What is a product model ACO?
A product model ACO is a health insurance offering that employees and their dependents actively select during open enrollment. Selecting an ACO product means that the plan member chooses to seek all of the care they need (with some exceptions) from the ACO provider network, typically in exchange for lower premiums and lower cost-sharing. In this model, ACO providers have a greater ability to manage and oversee these patients’ care because the patients are less likely to seek care outside of the ACO, given the significant out-of-pocket costs they could face out-of-network. However, this model is less prevalently used by purchasers because purchasers first must offer this option to their members and members must then choose to enroll in it. For members to select an ACO product over another plan, they must understand its benefit or value, especially given its likely restrictions.
What does this distinction mean for the SPARC?
The group developed resources that can be used under both scenarios. However, in certain cases, some resources are more applicable to one arrangement than the other. In addition, health plans have suggested that they have different abilities to use these resources for one model versus the other.
Standardized Plan ACO Reporting for Customers (SPARC)
CPR, along with the ACO collaborative participants and subject matter expert, developed a set of resources that purchasers can use to hold their health plan accountable for its ACO strategy. The SPARC consists of the following resources specific to health plan ACO arrangements:
- Request for Information (RFI)
- Model Contract Language
- Performance Guarantees
- Provider Checklist
- Standard Plan ACO Report
Below, we describe the purpose of each of these resources and what a purchaser needs to know to use them effectively.
Request for Information (RFI)
The RFI should be used by purchasers to assess health plan ACO strategies as part of the process of selecting an Administrator. Purchasers can field this RFI to prospective health plans to get a better sense of their ACO strategy, such as what programs they offer and in which geographies, how they select and define ACOs, what role they play in care coordination, whether they use the measures listed in the IHA-PBCH ACO Measure Set and which payment arrangements they use. In addition, purchasers can ask questions about the health plan’s ACO strategy in specific markets to learn what opportunities are available to them.
The RFI can also be used by purchaser-customers to assess their contracted health plan’s ACO strategy. By fielding all or some portion of the RFI, the purchaser-customer can learn more about the design of their current partner’s arrangements, such as whether their members are attributed or not, to help determine whether they want their population to participate.
The RFI also asks health plans about their willingness to use the Standard Plan ACO Report to share the results of their ACO arrangements with the purchaser. This willingness is critical as current health plan reports do not meet purchasers’ needs.
Model Contract Language
The Model Contract Language can be used by purchasers when contracting with a health plan that has an ACO strategy in place, whether it be a product or attribution model, or both. This resource outlines purchaser expectations for the health plan’s ACO arrangements, as well as the reporting on ACO performance.
In particular, purchasers should require that the contracted health plan offer an adequate high-value network of providers, ensure adequate care coordination services, measure the ACO’s performance on a defined set of measures, pay providers in a way that promotes value, make available information on the price and quality of ACO providers, maintain market competition in the face of consolidation, and support benefit and network strategies that encourage members to seek high-value care.
Purchasers should also require the health plan agree to use the Standard Plan ACO Report to provide bi-annual or annual results on the impact of the ACO program, including on the purchaser’s population, as feasible. Coming to agreement on these terms will help to advance the reporting practices of health plans and create greater transparency and insight into the impact of their ACO arrangements.
The Performance Guarantees can be used by purchasers alongside the Model Contract Language to ensure that their health plan partner is meeting mutually-agreed upon performance standards. CPR recommends that purchasers review the Performance Guarantees to identify which metrics are top priorities. Ultimately, the selection of Performance Guarantees and the percent of fees at risk for not meeting them will be a result of negotiations between the purchaser and the health plan. The CAHPS ACO-9 Survey is not yet widely used; therefore, purchasers may receive pushback from health plans to put fees at risk for meeting this metric.
The purchaser should also explore strategies and methods to help the health plan meet their goals. For example, if the purchaser expects a certain percentage of plan members to be assigned or attributed to ACOs in shared risk arrangements, then the purchaser may need to offer incentives to members to select these ACOs.
The Provider Checklist can be used by purchasers when there is an opportunity to meet directly with providers in the ACO. These questions can help purchasers learn more about the arrangement and how the ACO operates. The questions in the Checklist are organized into six categories, which can help the purchaser prioritize questions of interest. These categories include the provider makeup of the ACO, the electronic health record system, ACO management, patient engagement, the ACO’s experience with payment reform and quality measurement, and how it receives and acts on the quality and cost reports the health plan provides.
Another resource purchasers can use in direct interaction with ACO providers or representatives is the Purchaser Value Network (PVN) ACO Assessment Toolkit. The PVN conducted research to identify better and best ACO practices in the areas identified in CPR’s Checklist. Purchasers can compare ACO responses to the questions in the CPR Checklist to the best practices listed in section 1 of the PVN Toolkit.
Standard Plan ACO Report
The Standard Plan ACO Report is the most important component of the SPARC and was developed specifically to meet the expressed needs of Collaborative participants. The group was inspired by the Nutrition Label, which was developed to provide a quick, standardized way for consumers to identify the nutritional qualities of their food, particularly as the number of processed foods increased. The Standard Plan ACO Report was developed in the same vein. As the number of ACOs have increased, employers and other purchasers need a quick, standardized way to evaluate their results. Even though health care is more complex, the report helps us set a standard for meaningful and accurate reporting on ACO performance, in a way that is easy for the purchaser-customer to identify how the program impacts their member population.
The metrics identified in the report are those that are most meaningful to purchasers. We do not yet have the equivalent of “daily values” or benchmarks to compare these metrics to, but the hope is that by collecting this data in a standard way overtime, we will be able to identify and compare results to understand how these programs are faring.
How is it organized?
The Standard Plan ACO Report has four tabs:
ACO Facts: Purchaser The goal of the ACO Facts: Purchaser tab is to provide purchasers with a nutrition-label-like, quick-to-digest, standard report on how their health plans’ ACO arrangements impact their population. This tab should draw from data reported on the Outcomes tab about individual ACOs where the purchaser’s population receives care (see below). This tab displays critical cost, quality and utilization metrics, including a subset of 10 measures from the IHA-PBGH ACO Measure Set, selected by the Collaborative participants, with the help of quality measurement experts, as the best indicators of how well ACOs are managing care.
Outcomes This tab asks for the detailed cost, quality and utilization performance on each of the ACOs, in which the purchaser has more than 500 covered lives, for the current period only. This tab includes the metrics that are reported on the ACO Facts tabs, but asks for each ACO’s performance on additional cost and utilization metrics, as well as the entire IHA-PBGH ACO Measure Set.
ACO Facts: Book of Business This tab details the results of the health plan’s ACOs across its commercial book of business. This tab acts as a source of comparison to the health plan’s commercial book of business, as it measures the same metrics as the ACO Facts: Purchaser tab.
Definitions This tab provides the source, type, and definitions for the measures in the IHA-PBGH ACO Measure Set. Note that some of the measures are currently in use and others are under development with the expectation that they will be in use within the next year or two.
If you plan to compare the statistics in SPARC with other data points, note that factors such as the population risk status or geography may influence your conclusions.
Health plans should complete and share this report with purchasers on either a bi-annual or annual basis—whichever the purchaser and health plan agree to. To require completion of the Standard Plan ACO Report, purchasers should incorporate expectations for its use into the contract with the health plan and ensure it is delivered in a timely manner by using the Performance Guarantees. Purchasers may also want to incorporate coordination of this report into their consulting agreements where a consulting partner manages the health plan on the purchaser’s behalf.
To ensure that there is greater transparency into health plan ACO arrangements, purchasers need the SPARC. A collective voice with a consistent “ask” can make the business case for health plans to become more consistent and comprehensive in their reporting to customers. If purchasers begin to use the SPARC, they will glean insight into how a health plan’s ACOs are designated and designed, and ensure that health plans represent the entire picture when reporting on the results of these arrangements. Given that these models are prevalent, and many purchasers and their populations are affected by them whether they choose to participate in them or not, we need to ensure that these programs are providing meaningfully better value in health care.
CPR has developed a plan to work toward standardizing the use of SPARC by purchasers. To start, on November 9, 2017, CPR will host a Virtual Summit to shine a light on the need for the Standard Plan ACO Report and its potential impact on the marketplace. In addition, CPR will launch a campaign to educate employers and other purchasers about the value of the SPARC and encourage benefits consultants to spread their use. Purchasers who use CPR’s general Request for Information and Model Contract Language can attest to the benefits of working toward this standardization and CPR hopes to support the same kind of success in the ACO arena.