Plans Endorse Standardized ACO Performance Measures

Four of California’s largest health plans — Aetna Inc., Anthem Blue Cross, Blue Shield of California and Health Net, Inc. — have joined an effort in that state to standardize performance measures for commercial accountable care organizations (ACOs). The initiative will be launched this year by the Integrated Healthcare Association (IHA) and the Pacific Business Group on Health (PBGH). The groups hope to make the ACO standards a national model, but insiders differ over the potential of the measures to be accepted outside of California.

“The goal of the IHA-PBGH partnership is to develop and implement a standard quality and cost performance measure set for commercial ACOs that meets the needs of participating purchasers, health plans and providers to improve care while advancing national efforts for coordinated, meaningful performance measurement,” the groups said in a Dec. 15 statement.

The effort builds on IHA’s Value Based Pay-for-Performance (VBP4P) and Medicare Advantage stars performance measurement programs, according to IHA. The group’s “2016 to 2021 Value Based P4P Measure Set Strategy” lists several tactics to be used in developing the new ACO measures, including:

✦✦ Working diligently to align the measure set with others, particularly the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), the federal Quality Rating System for Covered California, and NCQA’s health plan accreditation measures;

✦✦ Documenting and communicating the rationale where measures diverge; and

✦✦ Managing the risk of measure fatigue by aligning measure specifications with the measure developer’s specifications whenever possible.

“Standardizing measures is extremely important to facilitate the growth of ACOs,” David Muhlestein, chief research officer at Leavitt Partners, tells AIS Health. “The initiative in California is promising, particularly due to the number of payers and providers that have agreed to participate. The more payers that participate, the more likely it will be that the initiative may take root.”

Although payers and providers have long agreed that standardized measures for ACOs are important, there are obstacles to coming to an agreement over the standards, Muhlestein says.

“First, participants often want the measures they are already using to become the standard. Alternatively, they may take a predefined standard and then make slight modifications, which defeats the purpose of the standardization,” he says. “Second, standards may make sense for a certain population, but then they may not make sense for another population (e.g., a measure that works really well for Medicare
populations may have no meaningful use for a pediatric population).”

Muhlestein calls the initiative “promising,” but he is skeptical of its chances for success. “It will remain challenging to create a nationwide standard and thus it is not likely that one will be adopted in the near future.” The groups said they plan to launch the initiative with 18 total clinical quality, hospital utilization and cost measures for care provided in 2017.

The measures cover recommended cancer screenings, comprehensive diabetes care and emergency department visits “to the total cost of care per enrollee.” More measures will be added in the future to bring the total up to 35 measures.

IHA said it will also work with the National Quality Forum to develop “next-generation ACO performance measures,” including patient-reported outcomes.

Justin Barnes, director of health care strategy at advisory firm Barnes Advisors and co-founder of the Health Innovation Think Tank, says the initiative “is a terrific step in the direction of supporting our nation’s advancement towards creating a smarter, sustainable healthcare system.”

“The IHA-PBGH partnership looks to achieve the best practice of streamlining programs, measures, incentives and criteria all while highlighting best practices and key strategies for success,” Barnes tells AIS Health. “It’s also encouraging to see the program’s published tactics [in the IHA strategy] in how the partnership plans on achieving their goals as they are spot-on from my perspective. This initiative could certainly be a valuable blueprint for other states to follow.”

According to IHA and PBGH, purchasers endorsing the initiative include: The Boeing Company, The California Public Employees’ Retirement System, Covered California and Google. Provider supporters include Cedars-Sinai Medical Center, Brown & Toland Physicians and NAMM California (a unit of UnitedHealth Group’s Optum subsidiary).

Leaders of the organizations emphasized the need for nationwide measures for ACOs. IHA President and CEO Jeff Rideout, M.D., said standardized measures are needed because varying performance measures have become more prominent nationally, placing demands on providers and potentially working “at cross purposes to advancing higher-value care.”

“With upwards of 20 percent of consumers now using ACOs, we need a common yardstick to measure and benchmark ACO performance if we are going to improve quality and keep care affordable,” said PBGH CEO David Lansky.

Blue Shield of California Executive Vice President Jeff Bailet, M.D., said that standardizing performance measures across health plans will not only reduce reporting burdens on providers, but it will make the results more meaningful to them, helping them to improve outcomes.

Read the IHA strategy here:

Contact Muhlestein via Leavitt Partners spokesperson Jordana Choucair at Contact Barnes at

by Diana Manos at