Frequently Asked Questions

The following material is designed to provide answers to frequently asked questions regarding the development and formation of Shore Quality Partners. While this is not an exhaustive list of potential questions, it aims to touch on main points associated with planning, governance, participation, and payer contracting.

Throughout this document, you will see cross-references to relevant sections of the Physician Participation Agreement, where you can find greater detail on the information provided in this Q&A.

BACKGROUND

What is a Clinically Integrated Network (CIN)?

A Clinically Integrated Network is an arrangement that will allow Shore Medical Center and area physicians to clinically integrate with the objective of improving the quality and cost-effectiveness of patient care while remaining independent entities. A CIN is usually a separate legal entity that enters into contracts with insurers to reward providers for improvements in the quality and cost-effectiveness of care. Clinical Integration aims to coordinate care across settings, providers and conditions by establishing and implementing policies, procedures, and protocols to improve and continually assess the cost and quality of care by investing in IT infrastructure, and otherwise striving to achieve “real” clinical integration.

Why is Shore Medical Center (SMC) developing a CIN?

SMC is developing a CIN, called “Shore Quality Partners”, to allow area physicians and the medical center to work more closely through a collaborative model to respond to local and national health reform and competitive pressures. It will allow private practices to remain independent, yet clinically integrate to improve care and access key opportunities with payers. The objective of true clinical integration is to improve the quality and cost-effectiveness of care, and if successful, participating physicians and other network providers will have the opportunity to be rewarded for these improvements.

How is Shore Quality Partners different than a Medicare Accountable Care Organization (ACO)?

Shore Quality Partners will pursue many of the same types of quality and efficiency improvement efforts as Medicare ACOs, but there are a number of differences between Shore Quality Partners and Medicare ACOs, including:

> Medicare ACOs are bound by exhaustive regulations pursuant to the Medicare Shared Savings Program. These regulations apply to all aspects of operation including organizational structure and governance. This decreases the amount of flexibility in how the organization is established and operated. Medicare ACOs have the benefit of fraud and abuse waivers for activities that are reasonably related to the purposes of the Shared Savings Program. CMS has not expressly granted CINs the benefit of these waivers.

> Medicare ACOs require primary care physicians to be exclusive to one Medicare Shared Savings Program ACO (and some ACOs may require certain non-PCPs to also be exclusive). Shore Quality Partners does not require any exclusivity and does not restrict participants from joining other similar networks or arrangements.

Why Now?

In light of health reform, payment pressures, and increasing demands on providers, SMC and its PLC identified the need for an effective way to work with physicians and payers. Building the capabilities to manage population health and coordinate care typically involve adding new care management and data sharing capabilities, which can take years to perfect. By being proactive and developing the structure now, Shore Quality Partners can seize opportunities to work effectively with engaged payers as they arise. Already, some major payers are showing interest in our initiative.

How do we know payers will be interested?

Shore Quality Partners has already begun discussing contract options with several engaged payers who have substantial beneficiaries in the region. These payers are increasingly interested in innovative contracting models, including pay-for-performance and shared savings that reward providers who are truly clinically integrated, and are able to provide high quality, cost-efficient care to patients. SMC also plans to manage its self-insured employees through Shore Quality Partners and will make additional payments if quality and cost-efficiency goals are achieved.

OWNERSHIP/GOVERNANCE

What is the ownership of the organization?

Shore Quality Partners will be structured as a Hospital-Affiliate model. In this model, the medical center will be the sole owner and advance all funds required to develop and operate the entity. This decision was made through a collaborative process in which the PLC weighed the pros and cons and decided this model was the best for the following reasons:

> Physicians do not need to invest their own funds in Shore Quality Partners’ infrastructure or operations (but do need to invest time and effort collaborating on achieving clinical integration, and other matters relating to the ongoing operations of Shore Quality Partners);

> The only income that Shore Quality Partners will receive are the rewards and incentive payments it earns from insurers – and all of this income will be distributed to SMC and the participating physicians based on performance in quality and cost-effectiveness measures determined by the Shore Quality Partners Board. Thus, there is limited benefit to being an owner because there will be no “dividends” to distribute;

> Physicians are given a strong governance role, thus ensuring the desired oversight of operations; and

> Shore Quality Partners will likely garner a larger network of physician participants and faster speed to market if financial investment is not required.

What is the governance structure of the organization? (See exhibit D to the Physician Participation Agreement).

The Shore Quality Partners board will consist of twelve (12) Directors made up of two classes; Physician Directors and Hospital Directors. All decisions of the Board will require the approval of a majority of both classes of Directors, ensuring that only decisions and initiatives that are agreed upon by both classes are pursued. The Board will primarily be comprised of physician directors, as follows:

Physician Directors

Nine (9) physicians elected by the Physician Participants
- No more than 4 being SMC employed physicians (employed defined as directly employed by SMC or Shore Physicians Group (SPG), having full-time professional services arrangements with SMC and not billing payers directly, or having exclusive service contracts with a clinical department of SMC including, without limitation, radiology, pathology, anesthesiology, neonatology, and the emergency department).
- No more than 5 being PCPs
- No more than 5 being Specialists

Hospital Directors

Three (3) SMC designated representatives

Additionally, Shore Quality Partners will have several committees that offer additional opportunities for physicians to be involved in the leadership of the organization. Currently, the proposed committees are:

Care Management
Data and Information Sharing
Quality Monitoring
Finance
Credentialing

COMPLIANCE

PARTICIPATION

Do all physician participants have to join at start-up or can physicians join later?

Currently there is only one solicitation period planned – from March 5th through April 25th. Participants who join during this period will ensure that they are in the position to participate in payer arrangements that are planned for 2014.

Subject to approval by the Board, qualifying physicians may join Shore Quality Partners after the initial membership period, but would not be eligible for year 1 participation in some of the earlier payer agreements.

What happens if I do not participate? Can I lose my SMC medical staff membership or privileges?

No, if a physician chooses not to participate, he/she will not lose medical staff membership or privileges at SMC. However, by not participating, physicians would not be eligible to share in any financial rewards from Shore Quality Partners’ contracts with insurers, even if they focus on improving the quality and efficiency of care in their practice.

Who is eligible to join Shore Quality Partners? (See Section 2.1 of the Physician Participation Agreement).

In general, any physician who is qualified and eligible for membership on the medical staff of SMC can join Shore Quality Partners.

Physicians must also: (a) be duly licensed, without restriction, to practice medicine and surgery and be in good standing under the laws of New Jersey; (b) not have ever been convicted of, or entered a plea of guilty or no contest to, any felony related to the practice of medicine, controlled substances, illegal drugs, or violence, and must not have ever been excluded, debarred, or suspended from participation in any governmental sponsored program, including, but not limited to, Medicare or Medicaid, and (c) meet such other qualifications and/or requirements established by the Board of Shore Quality Partners from time to time.

Will participating physicians be required to be credentialed by both the medical center and the CIN? (See the Credentialing Authorization Form that was provided to you along with the Physician Participation Agreement).

Every physician seeking to participate in Shore Quality Partners will sign a Credentialing Authorization and Release, which will be provided to the physician along with the Physician Participation Agreement. By signing this document, physicians will be authorizing Shore Quality Partners to consult with members of hospital medical staffs, health care facilities and entities, professional liability carriers, insurance and managed health care plans, and other persons and/or entities to obtain credentialing information.

PLUS:

If a physician is a member of SMC’s medical staff, he or she will also sign another authorization, which will allow Shore Quality Partners to obtain his or her full medical staff file from SMC. If any additional credentialing information is needed, Shore Quality Partners contact the physician; however, if a physician is not a member of SMC’s medical staff, Shore Quality Partners will provide the physician a list of credentialing information that the physician must provide to Shore Quality Partners, and an additional authorization to release certain claims information.

What are participating physicians’ roles and responsibilities in Shore Quality Partners? (See Section 2.2 of the Physician Participation Agreement).

The Physician Participation Agreement between an individual physician and Shore Quality Partners sets forth all of the requirements for participating in Shore Quality Partners. Physicians will be expected to actively engage in activities designed to achieve true clinical integration among SMC and the physician participants, perform certain “Services” including, among other things, developing policies, procedures, and protocols to improve the quality and efficiency of heath care in the communities served by Physician and the other Participants, attending meetings, and devoting time to Board committees.

How much time must each physician allocate for participation in the CIN? (See Section 2.2 of the Physician Participation Agreement).

The amount of time will vary.

> The participation agreement requires physicians to devote at least 24 hours to Shore Quality Partners’ activities annually. This includes time spent assisting in the development of policies, procedures, and protocols to improve the quality and efficiency of heath care in the community, attending meetings, participating in education and training regarding protocols, implementing data-sharing infrastructure and reviewing performance data, etc.

> Physicians will be strongly encouraged to spend more than 24 hours on Shore Quality Partners activities, and physicians who do will have the opportunity to receive greater rewards and incentives.

> Ultimately, the time and effort will be dependent on the level of the individual physician’s engagement (e.g., some physicians will take a more active role through participation on the Board and committees of Shore Quality Partners).

CIN CONTRACTING

How will payer contracting be handled through Shore Quality Partners? (See Sections 1.3 and 7.2 of the Physician Participation Agreement).

Physician participants will continue to be paid through their individual or practice payer contracts. Shore Quality Partners will focus on obtaining additional payments from payers that reward Shore Quality Partners for achieving agreed upon performance results. Initially Shore Quality Partners will pursue shared savings and pay-for-performance contracts, but could eventually pursue various other types of arrangements including bundled payments, accountable care, and direct contracting with self-insured employers. Joint contracting is not currently envisioned, but if it becomes of interest to the network in the future, the Board would need to approve the change and amend the Physician Participation Agreement. If a physician objects to any such amendment in writing within 30 days, then the terms of such amendment will not apply to the physician, in which case the physician may choose to terminate the Physician Participation Agreement in accordance with Section 5.2.2 (and, upon Physician providing such written objection, Physician will not be subject to the amended terms of the Agreement), or Shore Quality Partners may terminate the Physician Participation Agreement on five (5) days’ notice without cause and without liability.

INCENTIVES

How do physicians benefit from participating in Shore Quality Partners?

Physicians may already be making efforts to control costs and improve the quality of care. These benefits currently accrue to payers.

By participating in Shore Quality Partners, SMC and independent physicians will join together to become clinically integrated, and Shore Quality Partners will enter into contracts with payers that will reward participants for improving the quality and cost-efficiency of patient care.

The amount of potential rewards available depends on the number of payer contracts Shore Quality Partners enters into and the corresponding covered lives. This will also depend on the number of physician participants.

How will incentive payments be distributed?

(See Section 1.4 of the Physician Participation Agreement).

Bonus payments and other incentives from payers earned will be distributed according to the terms of the contracts negotiated with payers. However, Shore Quality Partners envisions sharing savings 50/50 between SMC and the physicians. Distributions to individual physicians will be based on performance in quality and cost-effectiveness measures determined by the Shore Quality Partners’ Board.

FUNCTIONS/ACTIVITIES

What are the key activities Shore Quality Partners will perform?

> Developing and managing arrangements with payers for payment of bonuses, care management fees, or other incentive compensation;
> Developing and implementing clinical integration guidelines and protocols;
> Gathering and analyzing data;
> Designing and implementing care management initiatives;
> Aligning with additional providers;
> Managing IT infrastructure implementation and operations; and
> Measuring performance and distributing incentive funds based on performance.