ACOs and CINs: Past, Present, and Future

ACOs and CINs:
Past, Present, and Future

© 2019 Health Catalyst
Proprietary. Feel free to share but we would appreciate a Health Catalyst citation.
This presentation is based on a 2018 webinar given by Amy Flaster, MD,
MBA, Vice President, Population Health Management and Care Management
at Health Catalyst, and Jonas Varnum, Population Health Management
Consultant at Health Catalyst, entitled, “ACOs and CINs–Where Did They
Start, How Have They Evolved, and Where Are They Going Next?”
Amy Flaster, MD, MBA
VP, Population Health Management
and Care Management
Jonas Varnum
Population Health
Management Consultant
ACOs and CINs:

The current growth rate of healthcare
is unsustainable.
In fact, it’s the largest driver of federal
debt in the United States, with Medicaid
placing tremendous pressure on state
budgets.
Companies that self-insure employee
groups are also struggling to balance
their budgets as the cost of healthcare
grows rapidly.
ACOs and CINs:

ACOs and clinically integrated networks
(CINs) are two types of organizations working
to, among other things, address the problem
of rising costs.
As ACOs and CINs continue to evolve,
organizations moving into value-based care
(VBC) face an ever-changing landscape.
This presentation looks at the evolution of the
ACO and CIN models, what new tools ACOs
employ today to promote success, and
lessons learned from organizations that have
succeeded in alternative payment models.
ACOs and CINs:

In response to growing healthcare expenses and
political pressure to reduce costs, healthcare
organizations are on a decades-long payment
reform journey.
A pivotal point in this process took place in 1932,
when the Committee on the Cost of Medical Care
released a landmark medical study.
The report recommended the “integrated practice
of medicine rather than autonomous individual
sets of practices.”
The question of how to achieve this integration
has confounded the medical community since
that time.
A Brief History of ACOs and
Value-Based Payment Models

Fast forward to the 1970s.
The passage of the Federal HMO Act in 1973
encouraged the growth of prepaid medical
groups, health maintenance organizations
(HMOs), and independent physician
associations (IPAs), all of which are the
predecessors to today’s ACO structures.
At the time, these organizations were
constructed as an alternative to existing
fee for service medical care, bringing
together a range of medical services
in a single organization.

HMOs would provide these services,
… as needed to subscribers in return for a
fixed monthly or annual payment periodically
determined and paid in advance.”
These models can stand as early ACOs and
the first examples of value-based payments.

The 1990s brought about the managed care
era, sometimes dubbed “the managed care
revolution of the 1990s.”
During this time, insurance companies
contracted with providers for capitated
payments.
At the time, managed care provided little
quality assurance or protection in terms of
insurance risk, which resulted in public
backlash from both patients and providers.

Around this same time, the first CINs were born,
prompting the Department of Justice (DOJ) and the
Federal Trade Commission (FTC) to create standards
and provide guidance around clinical integration.

In 2007, Elliott Fisher published the article
“Creating Accountable Care Organizations:
The Extended Hospital Medical Staff” in Health
Affairs, introducing the term accountable care
organizations/ACOs, which made its way into
the Affordable Care Act.
That same year, the IHI developed the
Triple Aim framework, placing focus
on improving the patient experience,
improving the health of populations,
and reducing healthcare costs.

The Triple Aim, and the subsequent Quadruple
Aim, are part of this history, not because they
are landmark legislative acts in the development
of VBC, but because they have provided a moral
compass for healthcare reform.
In today’s current landscape, there are over
1,000 ACOs covering 30 million lives.
That’s one in 10 Americans.
And the journey to VBC continues to evolve.

CMS defines an ACO as:
… a legal entity recognized and authorized
under applicable federal or state laws,
comprised of eligible groups of providers
that work together to manage and coordinate
care for a payer specific population.”
While that is the legal CMS definition, there isn’t
one standard industry definition of an ACO.
ACOs are voluntary or legal entities comprised
of groups of doctors and hospitals that share
responsibility for both quality and cost for a
population
ACOs and CINs: 101

Unlike the traditional fee-for-service
reimbursement model, an ACO directly
ties payments to outcomes of care and
the providers’ abilities to deliver care
in an efficient manner.
There are a number of clinical and
administrative commonalities across
ACOs, including Medicare ACOs,
commercial ACOs, and Medicaid ACOs.
ACOs and CINs: 101

Clinically, ACOs share a number of features:
Standardize clinical protocols that aim to reduce clinical variation.
Meet quality targets.
Coordinate care amongst providers.
Organize and optimize a broad spectrum of care management.
Ensure appropriate site of care efforts.
Develop patient engagement strategy.
ACOs and CINs: 101
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ACOs also share the following administrative features:
Create and monitor governance and partnership operations.
Identify solutions for core clinical, analytic, IT, and resource functions.
Monitor quality and payment targets.
Negotiate and manage contracts.
Establish procedures to distribute payments to participants.
ACOs and CINs: 101
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Although ACOs share these clinical and
administrative features, contracts can differ
considerably based on the type of ACO
(i.e., Medicare, commercial, or Medicaid).
While it can be difficult to make
generalizations because of this,
one common theme among all
ACOs is the shared contract goal
to reduce a population-specific
total cost of care.
ACO Contracts

Though contracts can vary greatly in the specifics, common components
include the following:
Minimum/maximum savings rate.
Quality score.
Attribution—retrospective vs. prospective.
Performance period and ramp up schedule.
Data access.
Contract review provisions.
ACO Contracts
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ACOs should ask the following questions when
reviewing or negotiating a contract:
Benchmarks:
• What benchmark is used?
• Is it a regional cost trend?
• Is it based on the historical costs
of attributed patients?
• Does it account for gain deficiencies
in the market?
ACO Contracts

Minimum/maximum savings rate:
• What is the minimum and maximum
savings rate?
• How do these vary over time?
• Are they steady, or do they ramp up?
ACO Contracts

Quality measurement:
• How is quality measured in the contract?
• How negotiable is that?
• What is the quality reporting program
in the contract?
ACO Contracts

Attribution:
• How is attribution managed?
(There are reasonable arguments in favor
of both prospective and retrospective methods,
but this an important feature to consider.)
ACO Contracts

Performance period:
• What is the performance period of the contract?
• Does it give the organization enough time to
allow for some stability in strategy?
ACO Contracts

Contract review provisions:
• What is the contract review process like?
• What events trigger a positive review?
ACO Contracts

Although both ACOs and CINs are
collaborative entities with similar goals,
are significant differences in the way
they are structured.
While an ACO is a contract-based term
with payment tied to outcomes, a CIN is
the organizing body that can support
multiple contracts.
Another way to view a CIN is the
platform upon which providers can
form an ACO.
ACO Contracts

The FTC defines a CIN as a:
… structured collaboration between
physicians and hospitals to develop clinical
initiatives designed to improve the quality and
efficiency of healthcare services.”
Clinically integrated systems are recognized
by the FTC and allow joint managed care
contracting in order to accelerate
improvements in healthcare delivery.
ACO Contracts

The designation of a CIN allows groups
the following benefits:
Grants the group the ability to negotiate
better rates with payers and provides
protection against anti-trust laws.
Has systems in place to enable their
participants to share information about
their patient populations.
Allows participating physicians and
practices to collectively track a shared
patient population in order to optimize
quality and cost reductions goals.
ACO Contracts
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Supplemental to these core qualities are four key principles of every CIN:
ACO Contracts
1: Provider responsibilities: active participation, engagement, and time committed to
enhancing clinical quality (care pathways) and reducing costs.
2: Provider accountability: CIN standards of participation create recourse if providers
are noncompliant in quality and cost reduction policies defined by the CIN.
3. Clinical quality standardization: The organization must demonstrate that the CIN
improves quality and efficiency over time.
4: Resource use: The organization must make efforts to meet quality standardization
and cost efficiencies. including infrastructure investment (IT), efficient network
participants (monitored through IT), and clinical improvement tactics (care
management and care pathways).

In addition to these four main components, CINs
allow for greater coordination across four main
areas of the integrated network:
Financial and operational administration
Legal structure and governance
Information technology
Performance improvement
(see Figure 1)
ACO Contracts
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A Level Deeper – the Components of a CIN
Figure 1: Additional components of a CIN.

ACOs are growing, with over 1,000 ACOs
covering more than 32 million lives.
Historically, commercial ACOs have
primarily driven this growth, but that
number flattened in 2019 while Medicare
ACOs and, to a lesser extent, Medicaid
ACOs, continue to rise steadily (Figure 2).
The Evolution of ACOs and CINs

Figure 2: The growth of Accountable Care Organizations (Source: Leavitt Partners data).

In addition to the recent rise in Medicare
ACOs, there has been significant growth in
Medicare ACO models that involve more risk.
In Figure 3, the illustration on the left side
shows the least risk bearing of the Medicare
Shared Savings Program (MSSP) ACO
tracks, moving toward Next Generation
ACOs–the most sophisticated and highest
risk bearing of the ACO models.

• 5,000+ Medicare
beneficiaries
• One-sided risk
(share in up to 50%
of savings, not
losses, not
to exceed 10% of
benchmark)
• Retrospective
attribution
• Reduce costs by
2.0 – 3.9% to
share in savings
• 5,000+ Medicare
beneficiaries
• Two-sided risk:
-30% - +50%
• Retrospective
attribution
• Reduce costs by
0.5 – 2.0% to
share in savings
• 10,000+
Medicare
beneficiaries
• Two sided risk
(choice of +-80%
or +-100%)
• Prospective
attribution
• First-dollar
savings
(receive what
you save)
above/below
benchmark
• 4 payment
options from
FFS to capitation
Level of Risk,
Financial Reward
MSSP Track 1 MSSP Track 1+
Next Generation
ACO
669,000
3,200,000
4,900,000
7,300,000
7,700,000
477,197
9,000,000
10,500,000
~1,500,000
0
2000000
4000000
6000000
8000000
10000000
12000000
Pioneer
MSSP
MSSP
MSSP
MSSP
NextGen
MSSP
NextGen
MSSP
NextGen
2012 2013 2014 2015 2016 2017 2018
CMS Beneficiaries Per Year
Figure 3: Left: ACOs by level of risk; right: CMS beneficiaries per year.
Providers meet MIPS / MACRA requirements

The bar graph to the right shows enrollment per
track by year, illustrating significant adoption with
more than 10 million beneficiaries enrolled in
MSSP and a steady increase of enrollment in Next
Generation ACOs.
Interestingly, 21 organizations opted into downside
(or two-sided) risk CMS ACOs in 2018, without
prior CMS ACO experience, indicating that
organizations aren’t necessarily starting with the
lowest risk model.
These MSSP tracks provide increasing levels of
potential bonuses for organizations that keep
spending below targets and include repayment
penalties for higher than expected spending.

Looking at these numbers, it’s clear that ACOs are
moving toward more risk for greater financial rewards.
But, what’s the next for ACOs?
CMS Administrator Seema Verma said, at an
American Hospital Association Annual Membership
Meeting in May 2018,
… We are working for competition and better value by
moving away from a fee-for-service approach, to a system
that is value based and that rewards value over volume.
We also want to think about models that create a true
competitive market where providers compete for patients on
the basis of price and quality, and moves the government
out of the business of setting prices. … We will also make
sure that our beneficiaries have incentives to seek value
when they obtain care.”
Looking to the Future of ACOs

Similarly, Adam Boehler, Director for the Center
for Medicare and Medicaid Innovation (CMMI),
has taken a hard line approach to ACOs, saying,
If you’re not cutting it, get out of the way, because
there are others that will come that will cut it.”
These are early signals into a greater emphasis
on ACOs having more skin in the game in order
to create a truly competitive market.

Assuming downside financial risk is a major
component of the recent changes to MSSP
that became final in December 2018.
These changes rename the program
Pathways to Success and require most
participating ACOs to take on risk within
two years in the basic track, placing an
increased emphasis on “accountability” in
accountable care organizations.
CMS plans to implement these changes
to MSSP in July 2019.

Shifting focus back to CINs, once a group of
provider entities has formed a CIN and met the
legal requirements, they must move quickly to
demonstrate the value of the network.
The trend toward consolidation, focus on
controlling costs, and shift toward value-
based payments are fueling competition
and pushing CINs to increase their reach
and network offerings.
This is resulting in an increase in the
Super-CIN model, or multiple CINs
under one superseding structure (Figure 4).
Where are CINs headed?

Scaled Long Term Effects
CIN/ACO Contract CIN Services Super-CIN
Providers join together with additional
networks to expand their opportunities.
Providers seek contracting and
services support in contracting through
interconnected, CI companies
Contract-Specific
Participants
CIN Participants
Narrow
Network
SuperCIN
Scaled
Infrastructure
Contract-specific
Services,
Participant
Agreement
Contract-specific
Agreement
Figure 4: The evolution of CINs requires the scaling of
long-term efforts, and in some cases the formation of
Super-CINs Are ACOs Successful?

So much discussion of the ACO model and its
evolution begs the question, do ACOs work?
That is to say, do they improve care and lower
the total cost of care? The short answer is that
the results are mixed.
According to a recent CMS publication, the
data suggests that upside-only ACOs are
losing money, driven largely by hospital-based
ACOs (as opposed to physician-led ACOs that
did save money).
CMS data also shows that two-sided risk
ACOs are cost-saving.

Possibly more telling than which ACOs are
losing money and which are gaining is the fact
that the actual net impact is relatively small.
With $49 million for upside-only risk ACOs and
$33 million in net impact for two-sided risk
ACOs, relative to the total budget of CMS,
these numbers are a drop in the bucket.

Recent medical literature suggests more
significant savings from MSSP ACOs, with an
article in the New England Journal of Medicine
suggesting the MSSP program resulted in a net
savings of $256 million to Medicare in 2015.
And, a whitepaper published in the National
Association of Accountable Care Organizations
in August 2018 reports that MSSP ACOs
generated a net savings of $541.7 million
from 2013 to 2015.

Looking at the evolution of alternative payment models from
the early 1930s through HMOs and today’s increasingly
sophisticated ACOs and CINs, these provider structures
have taken on increasing risk over time.
It’s more important than ever to
look at key components of success
for these risk-bearing groups:
• Know the end goal
• Educate and engage physicians
and stakeholders
• Let the patient be the guide
• Create a framework for formulaic success
Pillars for Success in ACO and CIN Models

1: Know the end goal
This is marathon work and consistently
distributing a consistent vision and definition
of success focuses these efforts over time.

2: Educate and engage physicians and stakeholders
While defining success orients the
group’s vision, stakeholders also
must be aware of where the
organization is within that framework.
Providing education around this
progress is crucial from adopting
to sustaining that vision.

3: Let the patient be the guide
Patients should be the true north of success,
serving as the external stakeholder that
supports any population health effort and
drives decisions (e.g., what contracts the
organization opts into, how the organization
looks at benchmarks, etc).
These should all be centered around
understanding the specific patient
population the organization serves.

4: Create a framework for formulaic success
Lastly, creating a framework for success is
one of the biggest keys to an organization’s
success over time.
Adopting a formulaic model helps promote a
continual process of operational success that
drives decisions—including what payment
models to participate in, what opportunities the
organization has to improve clinical
populations, and what care transformation
activities the organization should participate in.
Figure 5 shows an example framework for
transformation.

Create a Framework for Formulaic Success
Analytics leadership builds a structure
to identify and evaluate opportunities
KEY ACTIVITIES
1. Ensure baseline understanding of
current requirements, goals
2. Interview stakeholders for context
3. Assess available data to identify
quick wins, long-term focus areas
4. Synthesize and prioritize
opportunities
5. Plan for ongoing evaluation,
analysis
Financial leadership balances risks and
helps set a sustainable course forward
KEY ACTIVITIES
1. Align PHM with financial plans
2. Look to benchmarks to set expectations
3. Ensure you’re paid for value you provide
4. Pace utilization efforts carefully
5. Increase ability to understand true cost of care
Clinical leadership identifies and implements
appropriate changes in care delivery
KEY ACTIVITIES
1. Streamline your approach to quality measures
2. Optimize care management
3. Shore up primary care infrastructure
4. Seek opportunities for inpatient transformation
5. Ensure appropriate site of care
6. Develop patient engagement strategy
Near term
 Meet contractual requirements
in FFV contracts
 Remain successful
in FFS business
Long term
 Better quality of care
 Lower costs
 Stronger organization
 Healthier community
1 2
3a
3b
PHM leadership lays groundwork for a
high-functioning analytic platform
KEY ACTIVITIES
1. Prioritize data sources, starting
with claims data
2. Educate stakeholders on the
available data
3. Define supporting logic—like
attribution
4. Invest in staffing
Transformative activities and investments that grow your ability to deliver the highest quality, most cost-effective, and most care for patients across thecontinuum
A Framework for Transformation
Figure 5: A framework for transformation.
SUCCESS

After exploring the evolution of ACOs and
CINs, what’s next in the world of alternative
payment models?
The demands are changing, requiring new
competencies to meet them.
What follows are a few of the changes
coming to the alternative payment space:
What’s Next for ACOs and CINs?

1: A shift to purposeful, aggressive contracting
Organizations will necessarily need to become more
strategic about contracting, to include mixing various
types of contracts and revenue opportunities, such as
Shared Savings, PMPM bonus, Care Management
PMPM, and bonus fee structures for an overall
strategic impact.
This will also mean having additional depth in
contracting operations, benchmarks, and attribution.
Transparent historical data to drive those
conversations will be key.
Additionally, organizations will need to define upfront
expectations on quality measures to create a simple
slate of quality metrics across payers.

2: Increasing payer-provider integration
While there’s already been an increase in payer-
provider integration, this trend is likely to continue—the
only question is what the level of integration will be.
CINs and provider systems are already starting joint
health plans, but it remains to be seen whether others
will compete or join with payers to support new clinic
structures.
There needs to be a mutual alignment between end
goals to allow partners to determine who is most
efficient at what operations.
The next frontier is the renewed emphasis on the
employer space with an increased focus on innovation
from some of the big, new players in this arena.

3: Enhanced speed in defining impact populations
Organizations are beginning to know whom to
target, how, and why, with increasing speed
and granularity.
Better tools provide more granular data that
allows organizations to track specific
components of patient populations and
quickly and rapidly build upon interventions
(Figure 6).

Enhanced speed in defining impact populations
Figure 6: Better tools allow organizations to more quickly define impact populations.

4: Ongoing expansion of Medicaid VBC
An optimistic trend is the ongoing expansion of VBC
within Medicaid. Since the ACA was enacted,
Medicaid enrollment has grown by about 30%.
While many states have been in the Medicaid
managed care business for a long time and had
early success with Medicaid ACO models, other
states are just beginning to explore this work.
Expansion into Medicaid will continue to trend
upward and impact the kind of investments that
health systems make as they transition to a VBC
model, such as increased investment in social
determinants of health and behavioral health.

5: Increasingly sophisticated data
The ability to leverage increasingly sophisticated
data sources and components is a key pillar to
success in VBC.
The better an organization is at accessing and
interpreting data about its risk contracts, the more
likely it is to succeed in alternative payment models.
The increasing importance and availability of data
about social determinants of health, coupled with
geo-mapping data, is a compelling area for
organizations to focus on in order to provide
better care to vulnerable populations.

6: Evolving care management models
Exciting changes are happening in care management
and are expected to increase over the next few years.
Care managers will be tailored to the types of patients
they serve, leveraging diverse professionals operating
at the top of their licenses to target care management
for specific populations.
This could mean social workers providing care
management for patients with primarily psychosocial
issues, community health workers from within a
specific community targeting care management to
those communities, as well as the traditional model.
This is an opportunity to strategically target the care
delivered to different patient populations.

There’s also an increase in care management
outsourcing solutions.
While in the past, this has meant billing and
technology support, solutions now include a
full suite of services.
Lastly, is the digitization of care
management—which includes patient
stratification with machine learning, risk
identification for targeted interventions,
and telemedicine.
These are all exciting developments in
care management that will help support
evolving care models.

The Journey to Value-Based Care
The journey to VBC can be traced as
far back as 1932, with many bumps,
twists, and turns along the way.
And, while the destination still
remains out of reach, there’s been a
lot of progress in providing better
care, reducing the cost of care, and
improving the health of populations,
aided, in part, by the transformation
of payment reform models.

ACOs and CINs are evolving, and there is more
change on the horizon.
The types and structures of these organizations
continue to shift in a constantly changing
landscape.
ACOs and CINs must develop new tactics
and employ new tools to adapt to changing
regulations, increased competition, and
more discerning consumers.

A move toward strategic contracting, payer
and provider integration, Medicaid expansion,
evolving care management models, and
increasingly sophisticated data are all likely to
influence the future of ACO and CIN models.
As accountable care models continue to
transform, organizations that embrace risk to
provide true accountability are likely to lead
the way for value-based care.

For more information:
“This book is a fantastic piece of work”
– Robert Lindeman MD, FAAP, Chief Physician Quality Officer

More about this topic
Link to original article for a more in-depth discussion.
ACOs and CINs: Past, Present, and Future
Pairing HIE Data with an Analytics Platform: Four Key Improvement Categories
Adam Bell, Director of Clinical Advisory and Provider Outreach Services; Carol Owen, Senior VP, Interoperability
Dan Soule, VP Product Management; Eric Crawford, Head of Product - Interoperability, Analytics and Big Data
Social Determinants of Health: Tools to Leverage Today’s Data Imperative
Health Catalyst Editors
Value-Based Care: Four Key Competencies for Success
Jonas Varnum, Population Health Management Consultant
Five Action Items to Improve HCC Coding Accuracy and Risk Adjustment With Analytics
ACOs: Four Ways Technology Contributes to Success

Other Clinical Quality Improvement Resources
Click to read additional information at www.healthcatalyst.com
Dr. Amy Flaster joined Health Catalyst in August 2016 as the Vice President of Care
Management Services. In this role, she is concurrently employed by Partners Healthcare as
an Assistant Medical Director of Population Health Management. She continues to see
patients as an internist at the Brigham and Women’s Hospital in Boston and is an Instructor
of Medicine at Harvard Medical School. Prior to joining Health Catalyst, Amy completed her residency
in the Division of General Medicine and Primary Care program at the Brigham and Women’s Hospital.
Amy has previously co-founded a healthcare IT startup (TrueNorth Healthcare) which operates in the
end-of-life space, and has worked as an advisor to other startups through her work with the BWH
iHub incubator. She has worked extensively on provider innovation and transformation through her
work with the Brigham and Women’s Physicians Organization. Amy has earned a BA from Dartmouth
College, an MD from Harvard Medical School and an MBA from Harvard Business School.
Amy Flaster, MD, MBA

Jonas Varnum is a healthcare consulting professional dedicated to the redesign of healthcare
systems across the value-based care continuum. Jonas is a passionate believer in
performance improvement, and dedicated his work to achieving improved, sustainable
outcomes across populations.
As a consultant, he has served healthcare organizations by supporting them in population health
management aims; building, designing, and understanding new payment and delivery models;
management and leadership initiatives; public policy innovations; and various strategic planning goals.
Jonas Varnum

Health Catalyst is a mission-driven data warehousing, analytics and outcomes-improvement company
that helps healthcare organizations of all sizes improve clinical, financial, and operational outcomes
needed to improve population health and accountable care. Our proven enterprise data warehouse
(EDW) and analytics platform helps improve quality, add efficiency and lower costs in support of more
than 65 million patients for organizations ranging from the largest US health system to forward-thinking
physician practices.
Health Catalyst was recently named as the leader in the enterprise healthcare BI market in
improvement by KLAS, and has received numerous best-place-to work awards including Modern
Healthcare in 2013, 2014, and 2015, as well as other recognitions such as “Best Place to work for
Millenials, and a “Best Perks for Women.”

ACOs and CINs: Past, Present, and Future

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