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Incentive fund design methodology preview

Mark Buchholz M.D., MBA
Chair, Finance and Contracting Committee

Clinically integrated networks (CINs) strive to improve quality and decrease costs. Reaching these goals requires more work and time from providers. Legacy Health Partners appreciates the commitment of time and effort from all its members – it is absolutely fundamental to our collective success. Due to your efforts, LHP is able to demonstrate a direct impact on quality, efficiency and better patient health, which positions us to contract for shared savings arrangements and clinical integration funds.

You’ll soon be receiving a copy of the 2016 Pay for Value document, which provides specifics about this year’s clinical integration incentive design methodology. In the meantime, here’s some background to help you understand our approach.

Incentive funds include shared savings dollars 
Through shared savings arrangements with payors, the network can, over time, earn dollars by controlling utilization, decreasing cost and improving patients’ outcomes. Clinical integration funds are additional dollars on top of regular contract rates. These funds are provided by payors to pay for the extra time, effort, and resources required to improve population health, with the intent that savings will be realized in the future. LHP has pooled these dollars into what is called our clinical integration (CI) incentive fund, which will be distributed based on the performance of the network and providers.
Fairness and transparency
Every organization wrestles with the same concerns of fairness and transparency. Within LHP, all members are responsible for the success of the network; however, some providers and their organizations will be required to do more of the “heavy lifting” to impact population health. This work might be caring for sicker patients, tracking more quality indicators, changing entire IT systems, adding preventive services or becoming medical homes. In recognition of the additional investment and time required by PCPs, the LHP incentive fund is split into primary care and subspecialists, with the ratio set at 1.3:1 for primary care and subspecialists, respectively. This design allows primary care to use funds to invest in infrastructure. 

Specialty-specific dashboards provide equitable opportunity
The incentive distribution methodology incentivizes performance at the network level as well as on individual effort. This year there are specialty-specific dashboards that closely align measures based on practice type. This is meant to improve the provider’s ability to close care gaps and measure what is important to their specific practice. At the same time, the weighting of each dashboard ensures that all providers have equitable opportunity for incentive payout, regardless of their specialty and the number of specialty-specific measures assigned to their individual dashboard.

Incentive fund methodology will evolve over time
We anticipate that the specifics of our incentive methodology will change over time as our organization matures and continues to respond to changes within health care. The LHP Finance and Contracting Committee and LHP Board are committed to transparency in the design and execution of every aspect of the work we do on the behalf of the members of the network. We strive to financially recognize providers for all your hard work and look forward to our continued success.

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Legacy Health Partners Mission: Delivering value and improving health

Learn more at www.LegacyHealthPartners.org

Questions? Call 503-415-5109.