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Health Care Risk Sharing, Integration & Accountable Care – Part 8

RISK SHARING, INTEGRATION AND ACCOUNTABLE CARE: MECHANISMS FOR PROVIDER RISK SHARING AND INTEGRATION

Risk sharing and positioning a continuum for negotiation may also benefit from by creating a specialty and carve-out network.  Although a provider network’s market position generally benefits from offering a complete continuum of care, limited provider networks that target certain market niches are an exception.  These specialty networks can increase a provider-network’s market position by creating a uniquely desired, but limited, continuum.  Specialty networks have taken the form of Centers of Excellence, Service Carve-outs, Diagnosis carve-outs, demographic carve-outs.  Home health networks and long-term care networks can also be seen as specialty carve-outs.  Each specialty network identifies either a procedure, service, diagnosis, and/or demographic whereby they offer a complete continuum of care as to that carve-out.  Centers of excellence focus on high-cost, inpatient procedures, by providing specialists physician services.  Service carve-outs focus on a select services, such as mental health.  Provider networks involved in risk-sharing contracting with HMOs may wish to ensure that each and every participating network-provider share equally in the risk associated with outlier utilization costs.  Without adequate contracting controls and network structuring certain specific providers may become unduly burdened by unexpected utilization costs.  Through the network, structuring should be established whereby payment is made to the group with loss spread across all network-providers.

This article is part of a series of articles on risk sharing, integration and accountable care