Legal and Regulatory Requirements

The term “clinical integration” is sometimes used loosely in reference to informal efforts by hospitals and physicians to collaborate on quality or share data across sites. But a legally viable CIN program—one that passes antitrust muster and is able to contract jointly on physicians’ behalf—must meet a three-part legal standard outlined by the Federal Trade Commission (FTC) and Department of Justice (DOJ):

Participants in the CIN must demonstrate a significant commitment to cost control and quality improvement with realistic expectations of achieving their stated goals.

Joint contracting with commercial payers is permissible only to the extent that it is “ancillary” or subordinate to other activities—in other words, “reasonably necessary” to support the program’s investment in performance infrastructure and ensure participating physicians can easily collaborate.

The collaboration will not give participating providers too much market power. Generally, market share above 35 to 40 percent of physicians in any specialty can raise market power concerns, although substantially higher market share may be tolerated if the collaboration is non-exclusive (meaning physicians are free to contract with payers individually if the network cannot reach a joint contract). In a legally acceptable CIN, payers sign joint contracts with the network because they see value in performance activities, not because of the network can command market power.

Required Components of a CIN

The FTC and DOJ have been reluctant to define requirements for CINs too specifically, fearful of limiting providers’ flexibility to respond to specific market characteristics and needs. But a review of their published guidance and conversations with existing CINs highlight the following eight program components as vital to achieving quality and efficiency improvement and passing antitrust scrutiny:

  1. Selective Physician Partners: Inclusion of only those clinicians who are willing and able to advance program’s performance improvement goals
  2. Physician Oversight: Broad engagement of participating physicians in leadership and governance roles
  3. Meaningful Performance Metrics: Selection of initiatives and goals that will generate real quality and efficiency improvements without overwhelming network capabilities
  4. Optimized IT Infrastructure: Platforms to facilitate data exchange between practices and care sites
  5. Support for Clinical Redesign: Technology tools and staffing to aid physicians in effective case management and coordination
  6. Performance Monitoring: Systems to monitor network performance against goals and remedy any identified shortfalls
  7. Payer Engagement: Joint contracts that support CIN investment and facilitate care coordination between physicians
  8. Performance-Based Incentive Pool: Bonus structure that rewards physicians both individually and collectively for meeting program goals