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ACO Transition was Natural for Crystal Run Healthcare


For one group practice that was always ahead of the game, transitioning to an accountable care organization made perfect sense.

For Crystal Run Healthcare, a multispecialty group practice based in Middletown, N.Y., transitioning to an accountable care organization (ACO) was a chance to formalize a style of practice that its physicians had embraced for years. The 350-physician group, with offices spread across New York's Hudson Valley region, was a pioneer in adopting EHRs, employing care managers, and operating as a Patient-Centered Medical Home.

"When the healthcare reimbursement system started to change, we saw it as an opportunity to leverage the skills and capabilities we had developed over many years," says Scott Hines, Crystal Run's chief quality officer and physician leader for its medical specialties division. "We very much welcomed the chance to finally be rewarded on the basis of outcomes rather than transactions."

In 2012, Crystal Run was selected as one of the original 27 ACOs to participate in the Medicare Shared Savings Program (MSSP), which rewards organizations for lowering overall costs while meeting quality standards. The next year, it became one of the first ACOs to earn accreditation by the National Committee for Quality Assurance (NCQA).

"Becoming an ACO was about maintaining quality, improving our processes, and focusing on cost," says Jonathan Nasser, chief clinical transformation officer and physician leader of the pediatrics division for Crystal Run. "It was a perfect storm for us because it offered an opportunity to improve our efficiency while maintaining our financial sustainability."

As a medical home, Crystal Run already had many of the elements of an ACO in place, including team-based care, EHRs, and quality-reporting procedures. Still, the transition posed a variety of challenges as the group attempted to realign its physician compensation structure and engage all of its payers in moving toward value-based reimbursement.


The first step in the transition was getting physicians to buy into value-based care, says Hines. Providers attended orientation sessions in which they learned about the ACO concept and why it represented a better way to deliver care.

"In a fee-for-service system, an endocrinologist, for example, will get paid more for seeing 30 totally uncontrolled diabetics than 30 well-controlled diabetics who have good quality of life because they get paid more the sicker people are," says Hines. "We really wanted that message to resonate with providers."

Hines also explained that becoming an ACO would provide better long-term financial stability for providers and the practice, as more payers moved toward alternative payment models.

The group established ongoing clinical and nonclinical orientation sessions for all newly hired employees. Hines and Nasser attended monthly meetings to update office managers about efforts related to the transition and individual sites held monthly medical home meetings.

"In the medical home meetings, everyone on staff gets together to talk about workflow, what's working and what needs improvement," says Hines. "They review quality reports to see how their practice compares with other medical homes and individual providers and look at high utilizers or complex patients to make sure care managers are reaching out to them."


Crystal Run has invested significant time in realigning its physician compensation structure to emphasize outcomes over volume of services provided. That's been a challenge when Medicare and many commercial payers are still reimbursing on a fee-for-service basis.

"Right now, we have a foot in two canoes because 25 percent to 30 percent of the practice's financials are tied to alternative payment arrangements, while the rest is fee for service," says Hines. "We want to more rapidly move the compensation model toward rewarding value but we also have to stay in line with the pace at which our payers are changing."

One of its most successful strategies is a group-wide effort to reduce variations in care for common diagnoses, says Hines. After an initial analysis revealed that non-adherence to evidence-based practice guidelines was the biggest contributor to cost variation among providers, the group launched a pilot program to standardize care for diabetes in 2011.

By educating providers about evidence-based standards, the group lowered the cost of treating diabetes patients by 9 percent over six months in 2011, says Hines. Building on that success, physicians in various specialties developed best practices for 15 of the most common disease categories, such as hypertension, hyperlipidemia, and thyroid nodules, leading to a total savings of almost $4.2 million over one year. Since then, dozens of new best-practice guidelines have been posted on the group's intranet for a host of common diagnoses.

To maintain financial stability during the transition period when many of its payers continued to pay fee for service, the group focused on attracting moderate- to high-risk patients to its busiest specialties, such as pulmonology and hematology/oncology. The effort led to a 30 percent increase in patients and an overall 11 percent revenue boost from 2010 to 2013. During 2013, overall costs went down by an average of 10 percent on a per member, per month basis across Medicare and two commercial payer contracts.

"Our charges per patient are going down, but since we are growing the practice overall revenue is going up," says Hines.

The group is also moving toward tying a progressively larger portion of physician compensation to quality outcomes, he says. Currently, up to 15 percent of each provider's income is "at risk" based on how well they perform on specialty-specific quality measures, cost efficiency, improving access to care, and enhancing the patient experience, says Hines. Physicians receive a quarterly report showing how well they scored and how much of the 15 percent they will take home.

Over the next five years, the group plans to increase the "at risk" portion to one-third of overall compensation, he added.


Crystal Run has formed a business intelligence team to create sophisticated data reporting mechanisms in order to arm physicians with real-time data on their performance, says Nasser. The group is also working with external IT contractors to build a sophisticated enterprise data warehouse that will consolidate data from many sources - such as EHRs, pharmacies, and billing systems - making it easier to report on multiple disease populations and performance metrics.

"In the past, each of our payer contracts has had its own data source and reports, which has made it difficult to manage as we try to align all of our contracts in a value-based arrangement," says Nasser.

Although a significant financial investment, the new data warehouse is expected to drive future growth, says Nasser. For example, it will enable the group to present data to payers on the complexity and risk associated with various patient populations, potentially justifying higher care-management fees, and use demographic data to help determine where to locate new facilities or hire specific specialists.

"We will be able to easily access and package data to show to our providers so that they understand their performance and compensation," he says. "It allows us to make decisions based on opportunities."

Janet Colwellis a Brooklyn, N.Y.-based freelance writer specializing in healthcare. With more than 20 years experience as a journalist, she writes frequently about clinical and practice management issues for several national health industry publications. She can be reached at

This article was originally published in the November/December 2015 issue of Physicians Practice.

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