When Phoenix Children’s Care Network (PCCN) became the first clinically integrated pediatric network to achieve URAC accreditation in April, it blazed a trail that other children’s hospitals are starting to follow.
“I just had a call this morning with a clinically integrated pediatric network that’s starting to go down the URAC path,” says Casey Osborne, PCCN’s vice president. “They see it as a viable path for creating their network.”
Phoenix Children’s Hospital began its journey toward clinical integration five years ago when it launched a growth plan to provide care management and population health management services for many of its payers. Today, PCCN is the largest pediatric-dedicated, clinically integrated organization in Arizona and one of the few networks of its kind in the U.S.
But structuring itself as a clinically integrated network was fraught with financial, legal and regulatory landmines. Because PCCN would be negotiating contracts with insurers and paying quality-based incentive bonuses to its 1,000 providers, there was inherent risk of inducing referrals and engaging in perceived anti-competitive practices if the arrangements weren’t structured carefully (as famously happened to Danbury Health Systems two decades ago).
“We are the pediatric player in our region, so the fear was that if we were aggressive in negotiating contracts, an insurer could report us for colluding and trying to drive up costs,” Osborne says. “We needed to structure it so that we could be certain that no one could poke holes in our internal processes.”
The legal and regulatory risks mounted, so PCCN looked to other options.
“That’s when we pivoted toward accreditation,” Osborne says. “We chose URAC’s program because it aligns most closely with the FTC’s guidance and walks you through the steps for setting up your network.”
PCCN adhered to URAC’s Clinical Integration Accreditation standards, which are built upon four essential pillars that help ensure a compliant network structure:
- A governing structure that provides compliance and oversight;
- Top-down organizational alignment that ensures business arrangements are patient-centric and structured around improving outcomes, quality and costs;
- Care coordination built around a population health mindset;
- An integrated IT infrastructure that enables information exchange and data aggregation.
PCCN established new policies and procedures around financial distribution that spells out exactly how and why the network will incentivize primary care providers with quality bonuses, and how those payments are based on each physician’s patient volume and respective score on 15 quality measures. Thus, a physician with low quality scores on 50 patients would receive less payment than a physician with high quality scores on 30 patients. This shows that the payment is based on a top-down quality agenda rather than on referrals, which is strictly prohibited by law.
It took PCCN more than a year to prepare for and achieve accreditation—a painstaking, all-hands-on-deck process that required the network to scrutinize and, in many cases, overhaul, every aspect of its operations.
“Really, our accreditation serves as due diligence,” Osborne says. “It shows the insurers that we have sophistication and integrity and that we’re operating within the highest standards. Most of the health plans in our region are accredited by URAC, so they know we’re meeting those same high standards.”
PCCN is also saving money. “Now I’m budgeting less money annually for legal and consulting fees,” he says. “This savings is possible because we’ve become more sophisticated internally.”
Moving forward, PCCN plans to expand geographically by pursuing additional delegation arrangements with payers to provide credentialing, case management, care coordination and other services, and to assume more financial risk in its payer contracts.
Says Osborne, “The URAC process prepared us to assure our providers and confidently state that yes, we are 100 percent qualified and ready to work with you.”
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