Developing a High-Performing Clinically Integrated Network (CIN)

Transcript

CHAD MULVANY

On today's episode of Achieving Health, I've got the latest policy and legislative updates from Washington, D.C., for the week of September 28th, 2025. Then, I'll be joined by my colleague Faraaz Yousuf, managing director in the Healthcare Consulting practice at Forvis Mazars. We'll explore how an effective clinically integrated network can help providers achieve their strategic goals. Stay tuned.

ANNOUNCER

This is Achieving Health, a podcast from Forvis Mazars, where we delve into the topics that matter most to healthcare organizations across the continuum of care. Our goal is to help you navigate the dynamic healthcare landscape and achieve health at your organization. Here's your host, Chad Mulvany.

CHAD MULVANY

Welcome to Achieving Health. I'm Chad Mulvany. We'll begin today with our Washington Watch segment where I share updates on the most recent actions of federal policymakers and their anticipated impact on healthcare providers and payers. Today's Washington Watch reflects information as of 9 a.m. Eastern on Friday, September 26th. My comments on these discussions are based on what's being reported by D.C. trade press at the time of the conversation mixed with a lot of judgment about where things may go based on my experience in D.C. So, today's remarks reflect information as of this moment and will likely change.

As of the time of this recording, we're a couple days from a government shutdown, with both parties still talking past each other. As far as our agenda is concerned, while the House has passed a stopgap federal funding bill, the Senate hasn't been able to find a compromise that unlocks 60 votes. While we are more likely than not headed for a shutdown, it looks like whenever the Senate finds the votes to pass a continuing resolution, that bill will include most of the extender provisions that healthcare providers care about.

Also last week, CMS released the Notice of Funding Opportunity, or NOFO, for the Rural Health Transformation Program. Among other things, the NOFO includes additional criteria CMS will use to allocate the variable tranche, offers additional clarity on how the funds may be used, and provides different example initiatives that could be used by states as a starting point for their applications. Also, CMS provided preliminary guidance on September 9th related to which state-directed payments will be grandfathered. And from that was pleasantly surprised at how CMS interpreted those provisions.

Additionally, the House Ways and Means Oversight Committee held a hearing last week on tax-exempt hospitals. While complaints about tax-exempt hospitals lodged by many of the panelists who testified were familiar, there were no new legislative solutions offered to address the alleged problems. And in parallel with this, the AHA has released its updated report on the value of community benefit delivered by tax exempt hospitals.

Additionally, this week also brought a Government Accountability Office study on the impact of physician integration in healthcare prices, which we’ll unpack. And finally, there was the announcement of a national security probe into how other countries’ competitive practices may impact healthcare supply chains. And certainly that could have some implications for additional tariffs. So, without further ado, let's get into the issues.

In terms of federal funding for 2026, on Friday, September 19th, House Republicans passed, on a mostly party line vote, a stopgap continuing resolution that would fund the federal government through November 21st. However, as I mentioned at the top, the Senate has not been able to find a compromise that unlocks 60 votes. That same Friday, there were competing votes on continuing resolutions in the Senate: one a clean bill that mirrored the House version, and a Democratic version that included not only the extenders that we care about, but an extension of the enhanced exchange funding and a rollback of the OBBBA cuts on Medicaid that obviously also did not have enough votes to carry the day.

In theory, a short-term stopgap, when both chambers can pass one, will allow appropriators additional time to attempt to finalize as many of the spending bills for 2026 as possible with the remaining functions of the federal government, or agencies of the federal government being funded under a continuing resolution.

The House CR concludes all the normal extenders we care about. These include extending the Medicare dependent hospital and low volume adjustment programs, the telehealth and hospital-at-home flexibilities that are still left over from COVID, delaying the ACA's Medicaid DSH cuts again, and provides funding for community health centers. However, the House version does not include an extension of the enhanced exchange subsidies or rollback of the OBBBA’s Medicaid cuts, which is the sticking point from the Democrats perspective.

Both sides remain deeply entrenched and time at this point is running short to avoid a shutdown. As of today, I think a shutdown is more likely than not. And so, if Congress cannot pass a continuing resolution that extends the following programs, they will expire or run out of funding after September 30th. These include the Medicaid Disproportionate Share Payment cuts, which we’ll say more about, the low-volume adjustment and Medicaid dependent hospital programs, community health center grant funding, the telehealth waivers, work practice, geographic cost index floors, Medicaid rural ambulance payment add-ons, workforce extenders, also additional National Health Service Corps teaching hospital program, etc.

The one thing to note on the DSH cut is the Medicaid DSH cut for FY 2026 is $8 billion. Because DSH payments are made to states quarterly, it may be possible that the states will not impose the cuts on October 1st, providing a little bit of wiggle room and flexibility. However, this is going to be at the discretion of the various states’ Medicaid agencies as to how they want to treat basically anything that happens between October 1st and whenever a CR is passed that hopefully will include this provision.

Again, you know, I think whenever Congress does get around to opening up the government, all the things that we just talked about will be included in the package, at least funded for a short period of time to get to, sort of, that longer term negotiation that we talked about earlier. I'm also mildly optimistic that the enhanced exchange subsidies could be extended through 2026.

However, if this happens, it probably won't be on whatever short-term CR gets us through fall into November, December. The reason why I say this is the politics of having roughly 4 million, 4.8 million people get priced out of coverage, many of them in Republican-leaning states, right before the midterms is going to be politically difficult for Republicans, particularly those who are in swing districts and are already kind of fighting an uphill battle to retain the house.

As a former colleague and a friend likes to say, the campaign ad in that situation will write itself. Given that most Republicans have focused on affordability issues in their last sort of campaign, so that could come back to haunt them if subsidies go away. To that end, Representative Jen Kiggans of Virginia has introduced a bill extending the exchange subsidies that has a number of Republican co-sponsors who represent swing districts that have signed on.

Beyond Representative Kiggans’ bill in the House, there's a group of moderate Republicans and Democrats that are working on a compromise bill that might address Republicans concerns about the lack of an income cap and some of the other issues that have been raised about extending the subsidies. So that could possibly provide a vehicle for an off-ramp. And then in the Senate, you have Senator Murkowski and a handful of other Republicans who are working on similar legislation.

It's also worth noting that Murkowski voted no against the clean Republican CR, so she appears to be dug in on an extension of the subsidies. As far as the RHTP, or Rural Health Transformation Program Notice of Funding Opportunity, CMS has opened applications for the Rural Health Transformation Program, which is a $50 billion, five-year initiative created under the One Big Beautiful Bill Act to help offset nearly $1 trillion in projected Medicaid cuts.

Each year, $10 billion will be distributed, with half being equally provided among states, so guaranteeing at least $100 million per state if all states are successfully able to apply, with the other half being awarded on a points-based system overseen by CMS. For the variable tranche, half the points will consider factors that include the percentage of the state living in rural areas, the state's proportion of rural providers which was defined in the statute to the national total, the situation of the state's Medicaid DSH hospitals, and those three factors were specified in statute. And then a couple of additional criteria added by CMS, which include the size of the state and square mileage, and the state's amount of uncompensated care.

The other half of the points that will be assigned to allocate the variable tranche will be based on the state's progress towards making certain policy changes aligned with administration priorities like eliminating certificate of need requirements, expanding scope of practice for certain non-physician providers, implementing SNAP waivers to limit the types of food that can be purchased with the funds, participating in state licensure compacts to expand access to certain types of providers, and also expanding access to PACE and D-SNP programs for dual eligible beneficiaries.

One of the other interesting things to note is that while the Notice of Funding Opportunity talks about giving priority to applications that come up with solutions to uncompensated care, particularly in states and rural areas, one of the places where you can be awarded points along the policy related axis is expanding access to short-term, limited-duration insurance.

The Notice of Funding Opportunity explains the program is designed to transform rural healthcare, rather than just using the funding to cover operating costs or debt, with funds restricted for uses like new construction or duplicating payments covered by Medicare or Medicaid. While the statute allows states to use funds to pay providers at CMS’ discretion, the application prohibits payment for any services for which there is already an insurance payment.

However, it does appear that the application will allow states to use up to 15% of funds for provider payments. So, my guess is if you think about what a state could use that 15% of the funds for, like uncompensated care pools might be one example. However, the one thing I will say about that is, given the overarching goals around transformation, I'm not sure how CMS would score something like an uncompensated care pool, unless there was a long-term solution to address uncompensated care and just needing the funding to provide, kind of, some seed investment to fund that solution.

As part of the application, states must commit to addressing at least three priority policy areas, such as chronic disease management, behavioral health, workforce retention, or innovative care models. And they risk losing funding if they fail to be able to demonstrate progress by 2027 or 2028 for certain prevention-focused initiatives. CMS has placed limits on provider payments and barred funding increases for hospitals with non-compete policies signaling a push for broader reforms.

Notably, providers receiving funding do not need to be located in rural areas as long as the money supports rural healthcare delivery, which gives states flexibility in how they structure their programs. As I mentioned before, states have to apply by November 5th, so they don't have a lot of time to provide back to the agency what is a fairly detailed response in the form of an application.

As I mentioned earlier, the Notice of Funding Opportunity provides some generic templates, for example, initiatives that I think can be interpreted as being aligned with CMS’ preferred uses of funding. And so, I suspect that many states, given the time crunch, will pull at least one of those as one of the three initiatives that they are submitting. So I would sort of think about looking at those as you try to align what you would like to see the state do with the funding, as you're thinking about your comments and how you might position yourself so that once the state receives the funding, you can get in line to get a portion of what the state has received.

Moving to the preliminary guidance on grandfathering state-directed payments, on September 9th, CMS issued a preliminary document related to the grandfathering provisions for SDP caps that were included in the OBBBA. The guidance clarifies that SDP submitted for rating periods within 180 days before or after the July 4th enactment date can be grandfathered. Thus, submitted SDPs can be temporarily paid at the higher rate if they pertain to the 12-month waiting period that include any days from January 5th through July 3rd, 2025 or July 5th through December 31st.

This generally means that SDPs covering state fiscal year 2025, state fiscal year 2026, or calendar year 2025 are eligible for the temporarily higher payments. Between approval of a grandfathered payment rate and the 2028 beginning of the phase down to the lower limits, however, SDPs cannot be increased. According to the guidance, grandfathered SDPs are limited to the total dollar amount authorized by CMS.

Grandfathered SDPs may be renewed, revised, or amended after the initial CMS approval. However, the total amount cannot be increased. If the completed pre-print was filed after July 4th, the SDP is immediately subject to the lower rates. The one thing to note, as again, as I stated at the top, is that this is preliminary guidance and may be subject to change in a proposed final rule.

However, I was pleasantly surprised at how flexible the guidance was. I think one of the concerns that I had heard post-OBBBA, pre-this guidance, was that CMS may take a narrow interpretation of the statute, limiting the number of states that were grandfathered. In terms of the House Ways and Means Oversight hearing on tax-exempt status, during the hearing last week, nonprofit hospitals faced sharp criticism over their use of tax exemptions and alleged exploitation of anti-competitive practices.

Witnesses from advocacy groups and academic institutions accused these hospitals of straying from their core mission by spending on branding, sustainability and diversity initiatives while benefiting from quote unquote, “outdated tax privileges.” Additionally, economists highlighted how urban hospitals quote unquote, “misuse rural designations and contribute to markets consolidation, driving up healthcare costs.” The panelists, or individuals testifying, who were concerned about tax-exempt status called for reforms to increase the transparency and competition, arguing the current community benefit reporting lacks clarity and accountability, especially for large health systems that obscure individual hospital data.

Witnesses defending nonprofit hospitals emphasize their essential role in providing unprofitable but socially necessary services, often under financial strain. Stripping tax benefits or imposing new burdens on these organizations could lead to closures of either hospitals or individual service lines, potentially harming community care. Additionally, Democrats on the committee echoed concerns about economic pressures and weakened IRS enforcement capacity. Meanwhile, Republicans expressed interest in preserving rural hospitals while supporting stricter reporting and transparency.

From my perspective, there was the normal, what you would call wailing and gnashing of teeth related to tax-exempt hospitals. And as to be expected, given this was House Ways and Means, certainly some commentary on dual Medicare hospital status was to be expected. However, the hearing did not offer new potential legislative solutions beyond the vague, sort of standard recommendations for more oversight.

In advance of the hearing, the AHA released its updated report on the amount of community benefit provided by tax-exempt organizations, which helped provide analytical data showing that tax-exempt organizations are providing far more community benefit than the foregone burden of taxes. And so, in AHA’s latest research, it finds that tax-exempt hospitals provided nearly $150 billion in total community benefits in 2022, and this represented an approximately 50% increase over the five years spanning 2017 to 2022.

A large portion of these benefits, representing nearly 7% of nonprofit hospitals total expenses, or $65 billion, was for financial assistance for patients in need, including absorbing underpayments for Medicaid, CHP, and other state or federal programs for low-income individuals. Tax-exempt hospitals and health systems total benefits reported through their Schedule H filings were approximately 15.1% of total expenses for 2022.

In terms of the GAO Physician Integration Study, a Government Accountability Office study released this week finds physicians have become increasingly consolidated as their share of physician practices owned by other entities has increased over time. For example, the studies that they reviewed showed that at least 47% of physicians were employed or affiliated with hospital systems in 2024, up from less than 30% in 2012.

Estimates of the share of physicians consolidated with health insurers and corporate entities varied. Private equity ownership or investment in physician practice represented, in the studies reviewed, a small but growing share of physicians nationally, about 6.5% in 2024. However, shares varied based on specialty and geographic market according to the studies that the GAO reviewed. The studies reviewed by the GAO indicate that physician consolidation with hospital systems can lead to spending and price increases.

For example, several studies found increased Medicare spending due to services being provided in hospital-based settings, and also increases in spending paid by commercial insurers following hospital physician consolidation. The report was triggered by congressional request, House report 117-403, which instructed the GAO to study the extent healthcare consolidation is taking place across Medicare and Medicaid markets.

I suspect we're going to see more studies like this, and I am concerned that we may see studies like this cited in future OPPS rules by CMS as a justification to further extend site-neutral payments beyond grandfathered off-patient clinic visits. And now the proposed expansion of site-neutral payments into infusion services, which was in this year's OPPS rule, and to make these expansions in a non-budget-neutral manner.

One of the reasons why I think this is, obviously, the agency in the 2026 rule has already requested feedback on expanding the clinic visit policy onto the main campus, and also asked for a framework for identifying other services where site-neutral payments would be appropriate. One of the things that is concerning to me about these studies is somewhat ironic, is that when you think back to the debate in the run up to the Affordable Care Act, and really even before that, a lot of the conversation around healthcare was that it was a cottage industry and that really it needed to be more systematized.

And so, we saw, through a couple of different legislative vehicles that continue to this day, the incentives for Medicare and Medicaid to sort of push independent physician practices to aggregate into larger groups. And so, when you think about it, those incentives or those pieces of legislation included the HITECH Act, so the EMR dollars, the ACA, which included the Medicare shared savings program and provided the seed funding for CMMI.

You had the SGR, which wasn't obviously sustainable, and then you had MACRA. And so, all of those things sort of pushed physicians to either aggregate into larger entities that were led by physicians through private equity investment, align themselves with hospitals or health systems, or align themselves with health plans. And that's pretty much exactly what we've got. And as evidence, I would also point to the Quality Payment Program results, right?

We kind of see this every year in the physician fee schedule. Larger practices typically tend to do far better than smaller ones, mostly because they can afford the infrastructure to meaningfully participate in the program. And it's not just the data reporting infrastructure, but the administrative infrastructure to make sure the metrics are being reported and managed appropriately. So, you have heaped a whole bunch of new costs and regulatory requirements on independent practices.

At the same time, you have insufficient annual updates to the conversion factor. And so you kind of have this perfect storm that pushes independent physician groups to aggregate into larger entities, to achieve economies of scale and more sophisticated administrative capabilities to respond to these incentives.

Last thing I want to flag today, you have the United States government opening tariff probes into medical equipment, robotics, and industrial machinery. The Commerce Department has launched new national security investigations under Section 232 into imports of personal protective equipment, med supplies, and robotics. It was opened on September 2nd, but only recently disclosed.

The probes could lead to higher tariffs on a wide range of goods, from facemasks, syringes, and infusion pumps to programable mechanical systems and stamping machines. The department is asking companies to provide data on projected demand and assess whether domestic production can meet U.S. needs, while examining the role of foreign supply chains, particularly China's, in supplying critical medical and industrial products.

Items under review also include respirators, gowns, gloves, I.V. bags, sutures, wheelchairs, and hospital beds. The scope of the investigation also extends to advanced medical devices like pacemakers, coronary stents, heart valves, hearing aids, prosthetics and imaging equipment like CT and MRIs, pharmaceuticals, drones and a variety of other robotics-related tools are also being examined in separate probes. These investigations add to a growing list of Section 232 reviews into the imports of wind turbines, airplanes, semiconductors, heavy trucks and critical minerals, reflecting the government's broader effort to evaluate supply chain vulnerabilities and reduce reliance on foreign producers in sectors deemed vital to national security.

Depending on the outcome of the review, there could be additional tariffs levied on targeted medical supplies and devices, which will not only increase costs but risks supply chain disruption, as it sort of sorts itself out to try to mitigate the impact of tariffs. On a separate related note, CMS also submitted a proposed rule entitled Ensuring Safety Through Domestic Security with Made in America Personal Protective Equipment and Essential Medicine Procurement by Medicare Providers and Suppliers to OMB.

While the contents of this rule are as yet unknown, based on the total, it is likely CMS will use Medicare payment incentives to encourage hospitals and other providers to use domestically produced PPE and essential medicines. This concludes today's Washington Watch. Up next, I'll be joined by Faraaz Yousuf for a conversation about developing high-performing, clinically integrated networks.

I'd like to welcome our guest for today's episode, Faraaz Yousuf. Faraaz is a managing director in our healthcare consulting and strategy finance team at Forvis Mazars, and he leads the firm's clinically integrated network services. Before joining Forvis Mazars, he served for more than 20 years in health system executive roles, leading operational, transformation, and strategic growth and cultural renewal. Faraaz, thank you for joining us today. Looking forward to this conversation.

FARAAZ YOUSUF

Thank you, Chad. Thank you for having me.

CHAD MULVANY

Yeah, been looking forward to this conversation since you joined us. So glad we can get this in. You know, maybe just to kind of open, could you give us a little bit more about how you came to the industry and your background in healthcare?

FARAAZ YOUSUF

Yeah, sure. Thanks, Chad. I, you know, my interest in healthcare was really around since I was a little kid. I grew up in an environment, with my family, with several members of my family being in healthcare. I have aunts, long retired now, but that were nurses and doctors. And my older brother is a physician, and I grew up in a military family.

And so we moved around quite a bit. And, we had to do some volunteer work when I was in high school in Northern Virginia. And so I decided to volunteer at a hospital and quickly realized I wasn't cut out to be on the clinical side. And so I decided to go into the business side and was very fortunate to go to a school that had one of the best master's in healthcare administration programs in the country and got some great mentors. And, the rest is kind of history.

CHAD MULVANY

It's a great, sort of, origin story of how you how you came to healthcare. Which hospital was it in Northern Virginia, if you don't mind me asking?

FARAAZ YOUSUF

Yeah, no, Fairfax Hospital Inova. Great health system. And I actually did my residency at Inova, right outside of D.C. It was a really wonderful experience.

CHAD MULVANY

So I, while I was in business school, worked at Inova for about four years. It's a fantastic system. Have a lot of respect for the place.

FARAAZ YOUSUF

Yeah, likewise.

CHAD MULVANY

So, clinically integrated networks have been around at least as long as I have. I mean, I remember hearing about them when I was an undergrad in the healthcare management program during the late ‘80s, early ‘90s, kind of the HFMO phase. Why is it more important than ever for healthcare organizations to have a well-constructed, high-performing CIN that aligns with their goals?

FARAAZ YOUSUF

Yeah. Thanks, Chad. Great question. I think that the current environment in healthcare, more than ever, basically requires us to go back to, I think, some of the basic fundamentals. And as you mentioned before, the CIN, or the CIN environment, has been around for 20 to 25 years since we were in school, but has remained relevant because of the very basic tenets that it's built on.

Right. So it's built on, or was created originally as, as a function of reflecting the quadruple aim in healthcare. So quadruple aim being, reducing overall cost of a population, improving the health of that population, creating patient satisfaction, and finally improving provider well-being. And so the CIN was really designed to allow for, you know, sole practitioners, for independent hospitals to join forces with other providers in a like environment to create, you know, the company of healthcare and making sure that the care coordination is done well and then finally that they can contract and create some leverage with payers.

And again, as we talked about before with the regulatory environment today, it's, and with the some of the downward pressures with payers, the economic pressures, and then the employers asking for lower-cost, higher-quality plans, the environment is just really conducive for there to be creations and proliferation of CINs and we're seeing that across the country.

CHAD MULVANY

Yeah. No, I think that's right. It's one part making sure that despite the integration activity that's happened over the last 20 years, we still have a relatively fragmented delivery system when you look across the care continuum. So, it's making sure that the handoffs occur through each setting a care in a coordinated manner. It's providing the contracting vehicle that provides the managed care contracts, that rewards those high-quality handoffs that lead to high-quality outcomes.

And then also to your point, it's the helping the remaining, sort of small independent providers, smaller hospitals, offload some of the back office overhead or spread that overhead to manage that network.

FARAAZ YOUSUF

Yeah. We're seeing the, you know, over our careers, Chad, over the last 20-25 years we've seen that transition of small practitioners and small hospitals really leaning towards creating those alignments and mergers. Because, again, the economics of healthcare are just conducive to it. So I think we're seeing the kind of final remnants of independent practices.

And used to be that CINs were relatively localized when it comes to their organization, but now we're seeing statewide CINs, we're seeing super CINs. And the whole idea behind that is, again, creating alignment to create leverage, to take advantage of the current healthcare environment, and meet all the needs that we're talking about.

CHAD MULVANY

You know, you bring up statewide CINs or super-CINs. We're now in the application period for the OBBBA’s Rural Health Transformation Program funding. And one of the example initiatives CMS has shared, you know, kind of one of the examples that they might encourage states to borrow from is creating rural health CINs to improve outcomes for patients and also reduce back-office costs.

What advice would you give for states, or rural providers in those states, that want to use some of those funds to support a rural CIN?

FARAAZ YOUSUF

Yeah. Chad, thank you. And, as many that are currently looking at the Rural Health Transformation Program that was a part of the OBBBA legislation. We at Forvis Mazars here have been asked by a couple of different states to provide some guidance. And, generally speaking, what we're doing is really kind of looking in that CMS document.

And if you really understand the document and you read it, what it's doing is promoting, a states, or excuse me, creating an incentive for states to invest in their rural communities, knowing that there's going to be some cuts that are going to come through that Medicaid program as part of the legislation. This transformation Rural Health Transformation Program is there to bolster up some of those services.

And so, as you mentioned, actually it's around page 110 of that CMS document. It explicitly talks about the formation of CINs as a mechanism to achieving some of the disparities or, excuse me, offsetting some of the disparities that we see in the rural health environment. And so, as a form of advice, what we're asking many people to do is to take a look at how their states are functioning and, particularly within the rural census tracts, what kind of healthcare coverage they actually do have within those parts of the state?

What we're finding is that, even currently today, in some of the more rural parts of many of these states, there are still fragmented delivery models as you're mentioning before. And so as part of the OBBBA Transformation Fund, we believe that a lot of those funds will be applied to states that then use those funds to meet the needs of the rural health environments.

And so, the legislation, while the ruling around how it's going to be distributed is not necessarily clear, the criteria by which they're going to look at this, they have actually made pretty clear. And what that is, is wanting to improve rural health, wanting to create jobs in that environment, leveraging technology. But all the effort of really improving rural healthcare and ensuring that those states that do have large rural health tracts have, now, some mechanism and funding mechanisms to be able to directly apply to those areas to improve healthcare.

And so, as I mentioned before, we're working with a couple of different states and really taking a look at how their delivery care model is working and making sure that the more rural, most rural parts of the state, have some type of healthcare coverage, either through virtual health, through clinics, partners with FQHCs, and other types of mechanisms.

CHAD MULVANY

We've talked about why having a high-performing CIN is important, but what are the indicators of having a high-performing CIN? Like, how do you know the asset that you have is working?

FARAAZ YOUSUF

Yeah, I think that's a great question. So what I'd like to propose is a couple of qualitative as well as quantitative measures. So one of the explicit purposes of a CIN, or CIN, is to create alignment and give physicians a seat at the table to have a transparent environment in which they can then drive some of the variables that affect our, you know, care within a community. A high-functioning CIN creates that governance model where physicians are actively and highly engaged.

And not only that, they have a keen understanding of their data points and the data points that actually drive the population health. Data integrity and data management is a big part of a high functioning CIN. And so, the way that data is distributed, in a transform, transparent, excuse me, form to physicians in an actionable manner is a big function of a CIN, and it's often one of the biggest gains that we see when we develop CINs across the country is just the physician engagement really does skyrocket, because all of a sudden they see, and are part of, the decision making process and see the data that's really relevant to them.

So that's a little bit of, you know, qualitative. On the quantitative side, we definitely have measurable outcomes that we look at either within the Medicare shared savings space, MSSP, or other contracting engines in which you really get into a CIN. So in essence, being able to access contracts and shared savings programs that you wouldn't necessarily be able to do on a standalone basis, or that you're achieving gains on an existing program that you've had through better care coordination mechanisms.

So typically when we create a CIN what we do is we define those goals. And what's really interesting is that, in the very beginning of CINs, most of those goals are relatively transactional in nature. So, you know, it's reducing a certain measure or improving quality or biopsy or perhaps a hospital acquired infection, similar to what you would see in an ACO.

But as CINs evolve and they start to really expand and take on levels of sophistication, what we see is they start to become really these sophisticated care coordination models, with typically an MSO type environment included in it, which mitigates the costs to the providers and the health systems that are in the CIN.

But then ultimately, and I've often mentioned this doing lectures across the country, in my opinion, I think the most evolved CINs are ones that directly contract with employers, to provide, care for a community and take on some risk, or have more sophisticated contracts with payers in which they do the same thing. They take on a certain patient population within their geographic area, and seeing some level of risk for that patient population.

CHAD MULVANY

Yeah. No. And they're going all the way up to taking a, I'm assuming, a piece of the premium dollar and in more of a capitated type arrangement. Yeah. You know, and the thing that I like about sort of the qualitative and quantitative is I would imagine that the qualitative measures, so the physician engagement, the interaction with the improved data flow, is probably predictive of what you see then on the quantitative measures that are lagging.

FARAAZ YOUSUF

Very well said, Chad. And you know, one of the biggest, I would say, traps or faults that organizations fall into in NCI in development is not having patients to kind of, power through that process, if you will. So the beginning is always a little bit messy. Even organizations that are relatively sophisticated in data, and data management, find that doing a CIN pivot can be sometimes challenging.

But those that invest in that early kind of success and really building that platform, are, to your point, 100% much more successful down the road when it comes to kind of really looking at and tackling the quantitative measures that are measured by, you know, payers, governments, employers, everyone that kind of that has their eyeball on healthcare, they're looking at those measures to look at the overall quality of a system and the costs that those systems are associated with.

So yeah, that very fundamental aspect of it, the qualitative does definitely lean into that quantitative—very well said.

CHAD MULVANY

Well, you raise an important point about kind of the timing of that, I don't want to call it a flywheel, but that's the first word that comes to mind in terms of driving performance. And you know, giving it time for the data capabilities to take hold and the physicians to start engaging with it. We obviously all want to see results immediately.

Everything usually takes a little bit longer than we'd like it to. Like, what is, kind of, what advice would you give for someone as they're trying to decide whether they need to do something different, or whether they just need to keep persevering with their with their data integration strategy and their data transparency strategy.

FARAAZ YOUSUF

Yeah, I think that, you know, one of the, we're often taught in managerial books or in, kind of, podcasts that having goals that are a little bit stretched, I think are really valuable. And often, safe goals are not conducive to growth. We actually advise something a little bit different, especially in the infancy of a CIN, is really to create goals that are actually are achievable.

And I think that's very important because what it does is it creates the right track record and the right cultural movement moving forward, because a lot of physicians are often burnt out from seeing repeated programs. One of the things that are detractors for them is continuing to put work into an endeavor without seeing the fruits of that endeavor kind of being returned.

And so one of the things that we often advocate for a young CIN is to measure, or excuse me, to use, KPIs that are measurable and easily achievable in the sense of ones that are going to create, you know, an accretive advantage to the organization's already good platform of quality or performance. But do something that's familiar and easily measurable so that we can learn from that.

And then really kind of trumpet that success. That way when you do have those kind of, early wins, you're able to then transform that into more sophisticated ways and start to tweak. And, every organization, again, goes through this process where you learn very early on what's working and not working. But I think it's really important to have goals that you can hit early on.

CHAD MULVANY

Yeah. You know, and I think that what you just hit there is a really important distinction, because ultimately, by definition, when you're pulling together a CIN you're pulling together disparate groups of providers from disparate organizations. And so I think you're right. I think it is important to set those goals achievable. Celebrate those early wins, use it to build credibility, and then use that platform to go after some of those more audacious goals.

FARAAZ YOUSUF

Yeah, I think you're exactly, I think credibility is the key word right there, because I think that is really what defines a lot of those organizations, especially early on. I mean, our physician, you know, leaders in communities, and even the staff physicians, they're scientists by nature. And they've learned over the years to use evidence as a mechanism for driving their own practices.

It shouldn't be different in the business side of healthcare. It should be evidence based, you know, real improvement. And so the CINs, again, create that platform to have an evidence-based improvement model, which again, the data components are really foundational element. So you're exactly right. They use that evidence-based approach to then show improvement, give physicians that feedback and that data, and then allow them to kind of create that improvement environment and measurable goals and measurable tactics, etc.

So that really does lead to, again, that cultural transformation that we want with this CIN to being a high-performing organization. It is, a big part of it is culture. Like, how do you, you know, create a culture of high performance? Well, the foundation of that is all these elements that we're talking about within that CIN space.

CHAD MULVANY

You know, want to pivot a little bit. You kind of alluded to this earlier, but anytime you're working with physicians or really any group of stakeholders, one of the keys to success is having a good governance structure that everybody believes is fair. Where have you seen CINs get this right, and what arrangements maybe would you advise people to avoid?

FARAAZ YOUSUF

Yeah, I think that's well said. So a couple of things: one, the CINs that get this right have a diverse group of leaders who sit at a, either a committee or board level within a CIN where they can see, in transparency and as live as possible, the data that comes out from the organization, right?

And so it's usually, a group between 8 and 12 is what we recommend for that committee of physicians. And again, it doesn't have to be physicians that are the highest revenue generators, etc. It's typically physicians that are key and pivotal within that care coordination process or that see the organization from a vantage point in which they can be a, you know, a lever for change.

The advice I give organizations, what I tell them not to do is that this board or committee is not meant to be a representative committee of the entire community. And so the CINs that often don't do well is they stock a committee or board of 20 to 25 people, which, you know, for those that are steeped in poor governance, is often just a little too big for it to be an actionable committee.

Or they go into the depths of data denial or other things when data comes out and spend overly, I think, extraneous amount of time diving into the third decimal point. So, often what I tell them is data, in particular in this space, is meant to be directional in nature. And again, in the very beginning of the endeavor, a lot of those data points may be concrete, but as you start to evolve, you'll start to look at, initiatives and things that may not be necessarily so concrete.

So having that foundational credibility allows you to then start to explore areas of experimental change that are often needed to transform a community. Creating that credibility with those physicians is key to be able to, you know, get to that evolved step.

CHAD MULVANY

And, you know, I think the point that you made about kind of the, who the physicians are, they don't have to be your highest revenue generators from across the various practices that are representative. But it sounds like really they need to be more those physicians that are viewed by their peers as being credible and, you know, either leaders in their organization in a formal manner or an informal matters, does that sound about right?

FARAAZ YOUSUF

Yeah, it's exactly right. And, you know, it's often the situation with, for those that, again, that read leadership books, situational, you know, leadership is really key, right? And so, within the very early beginnings of a CIN its more important that you have credible leaders that can drive change. And then as you get into that stage three, stage two or stage three of evolution, you can start to pivot to leaders that are more administrative in nature or perhaps a leader who's the head of a practice, who can then start to really kind of manipulate the key functions and variables.

But in the beginning you really want that fire starter, you want that person who is a credible, you know, leader who engages other physicians, who is able to see the healthcare landscape from a macro perspective while understanding the clinical implications of the things that we're asking. And those folks are typically great ambassadors, and have that kind of engagement model where they believe in putting in a little bit of elbow grease to kind of make the engine move forward.

And then again, in any great business venture, once you start to really get that engine up and running, you should take a hard look at your leadership committee and say, okay, is this the one that is going to take us to that next level? And that's usually a couple years into the process, but it's a great opportunity to reevaluate and see where the next step is.

CHAD MULVANY

Yeah. No, I think that's great advice. And, you know, given that a CIN is a collective endeavor, you need to be able to measure performance that we talked about with the data, but also create shared accountability. However, providers often have several different managed care contracts. You know, each of them comes with their own set of measures. And you know that can proliferate across payers and product lines.

So it's hard to line up all of the measures and provide physicians with a reasonable dashboard for them to track progress and goals. So how do you create a set of KPIs out of this sort of best set of possible measures that provides a North Star to improved outcomes and reduce cost to care?

FARAAZ YOUSUF

Yeah. It's again, a great question. So in the beginning of a CIN, as you mentioned, when you bring your physician partners together, what you often find is that there are many, situations in where, these physicians are often already in contracts that may be lucrative or they may be looking for a pivot. So again, in the beginning of the CIN, it's not an all-in proposition.

So you can actually join a CIN. which is just a legal entity, while maintaining other contracts. And so that's why we, typically, so one thing I failed to mention is most CINs have a participation agreement. And so that participation agreement is a legal document that the CIN puts out to physicians who want to join the CIN.

And in it there'll be, you know, measures of agreement that include citizenship measures in terms of participation and, you know, being a good citizen within the CIN. But then also those measures of KPI, you know, dollars, remittance and understanding where the funds flow, etc. And as you mentioned, what we find is that in the beginning, a lot of these CINs are developed under the auspices of a very narrow type of approach to a singular aspect of improvement.

Often the very first metrics are what we call HQEPs. So Hospital Quality and Efficiency Program. So, right, so improving throughput in the hospital, reducing length of stay, so on and so forth. Those then evolve into as the CIN gets more sophisticated and perhaps adds an ACO into it. Those metrics then evolve more to metrics that affect the overall continuum of care across the entire patient.

And once you start getting into that space, it becomes much more easier to contract. And so what we see is over the years, physicians have maybe 95% of their contracts on an independent basis, and only 5% within the CIN. Over a five-year period of time in a very successful CIN, that will usually flip to most physicians will then be about 80% of their contracts within the CIN, but still will remain in independent contracts if they remain an independent group or part of a different type of health system.

So it's never an all-in proposition. It's often one of the, I think, challenges we have in explaining this to physicians. They believe it's an all-in proposition where you have to, you know, leave everything that you built and kind of come into the CIN. That's really not the case. It's you can be a part of multiple CINs and you can start, you can participate how you feel, like, you need to do what's best for your practice, but it really depends on the participation agreement on the CIN.

CHAD MULVANY

You know, that's. No, thank you. That's helpful. And then following up on that, how do you pull the incentives through the metrics to reward individual behaviors that support the shared goals?

FARAAZ YOUSUF

Yeah. That's the key about good data governance and, you know, transformation. What we often talk about is we talk about measures that are lead and lag measures, right? And so the lag measure is often the measure that's the final measure that CMS, or that's published in a report through an agency or through payer environment.

What we often do is try to manipulate the lead measures and the lead measures are the ones that are easier to measure. So, for example, if you were to say, okay, so, cost per adjusted admission is a measure that you want to look at. In our experience, that's a complete lag measure. Because what it's doing is it's looking at the overall cost of an inpatient admission as adjusted to our patient metrics, right? But that's typically not what we would use to inform action or to have physicians look at if they're successful as a standalone. You look at a couple other measures that are lead measures that inform that cost measure. So, for example, if we're working with a group of surgeons, then perhaps you look at cost savings within the O.R., who supplies vendor selection, narrowing the number of vendors.

That would then lead to that cost per adjusted admission as a downward kind of thing. And so what's very key when creating these KPIs is making sure that they're measurable and actionable. And that the physicians that are participating in those have a direct linkage to be able to manipulate it. And so again, in the outpatient environment, for example, we look at readmissions as a function of overall health of the community.

And so for our primary care partners, we'll look at how quickly you can get a patient within that practice. And that would be a KPI measure that we'd often take a look at to reduce readmissions. That's a lead measure that, again, informs how your readmissions are going to do down the road.

CHAD MULVANY

So it's almost a matter of, you look at the measure you want to change, you kind of root cause and understand the data and figure out which of the upstream measures is more likely to be more leveraged and impacting that measure based on the organization. And you kind of build the program around that measure that you think has the most leverage, or those measures that you think have the most leverage.

FARAAZ YOUSUF

You are exactly right. And often, again, in CINs that are high-performing, that lag measure may not change over the years. In other words, like readmissions, is never going to change as a metric that the federal government's going look at. But on an annual or semiannual basis, we'll see those lead measures actually change as you exhaust your improvement opportunities, right? So you usually start with the widest, top of the funnel where you're going to get the most, the biggest impact. And as you start to refine those measures, you'll see and become more and more narrow and nuanced. So yeah, you're exactly right. That's the goal.

CHAD MULVANY

So when you think about negotiating managed care contracts, what do CINs do differently that are successful than those that are maybe less successful?

FARAAZ YOUSUF

Yeah, sure. I think the, I think the name of the game is really leverage within a geographic area, right? So, we often look at managed care contracts from the perspective of the payer. And what the payer really wants is they want to be able to have a contract on the ground. You know, we're talking about commercial.

So outside of Medicare, Medicaid, when they have employers that are their primary contractors, payers really want, obviously, a high-quality, efficient, low-cost group of providers that can provide the services within the contract. From a provider side, what you want to do is you want to be able to be compensated for providing that sort of way.

So compensated well or, excuse me, as appropriate, for that community to provide that service. And I think that kind of, the Venn diagram of those two motivations is really kind of where we land within the CIN space. So the CINs that do this well, as you're mentioning, they create the leverage within geographic area and demonstrate that they can actually manage the cost of care and demonstrate through data that they can actually improve the, you know, the health of a certain population.

And through that demonstration, we often take those types of metrics, in data points when we go do our negotiations with our payers to say, okay, hey, guys, this is what the challenge was. Here's this patient population, here's our track record over a couple of years. And you can see these data points improving. And most payers will actually, you know, you'll get rewarded for that, one way or the other.

But that's usually the tack to, to be able to create some type of leverage with your payers. And again, the wider area you can see this with obviously the payers were more interested in doing this for the higher functions, higher functioning science typically have a little bit of a larger patient population where they're able to then manage these patients and then demonstrate that to your affairs.

CHAD MULVANY

Yeah. And I would imagine that it's sort of do it first in the commercial setting, build that credibility, build that value profit, then move on to the to to direct contracting with employers.

FARAAZ YOUSUF

That's exactly right. Yeah. And so, interestingly, a lot of the payers are pretty interested in being able to to conduct, as you're mentioning, a local type of experiment, what kind of help health systems or, physicians tiptoe into the waters of taking risks before taking on a larger, you know, higher risk platform or, excuse me, contract.

So, yeah, you want to kind of tiptoe into that space and kind of, as you're mentioning, a lot of that begins really within the government pay space. So a lot of the old traditional ACOs that were established really run an MSSP space, which I think the incentives were easier for providers and for physicians to understand, and then working, from that foundation, you can then evolve to taking on more sophisticated commercial contracts of payers.

And then, as you were mentioning, finally then evolve to learning those lessons, taking those lessons, and then finally getting to the space where you can do direct action.

CHAD MULVANY

I think that I think that glide path makes a lot of sense. You know, shifting gears a little bit, we've spent a lot of time talking about physicians and providers, but there are a lot of other clinicians, be it nurses, care coordinators, social workers, etc., who play integral roles in the success or lack thereof in a CIN. How do you create an environment that aligns their activity with the success?

FARAAZ YOUSUF

Yeah, I think one of the great advantages of having a high functioning CIN is really in the care coordination space. So, as a former healthcare administrator and someone who's been doing this for a long time, you know, one of the challenges that we've always had in healthcare is treating the patient in the right place, at the right time, in the right environment.

And what that means is really from a clinical perspective, ensuring that inpatients that are higher acuity have access to inpatient care, with the advanced surgical techniques that we need. But for those patients that don't need an environment, that are relatively healthy about need, perhaps in an ambulatory procedure or ambulatory care, that those patients are then set in the right type of environment.

And that's a basic function of being able to manage costs and healthcare. Right. So we don't want our patients to be in a costly inpatient environment. And from a quality perspective, we don't want high acuity patients that may have comorbidities or risks associated with them being in an ambulatory environment. Well, they're very careful care coordination that happens is a concerted dance amongst sometimes dozens of, you know, clinical, leaders that are not physicians.

So your nursing team, your case management team, who often has nurses on that, your social work team, who are all wonderful and making sure that those patients really land in the right spot and that does even include your tax and your other, types of support folks that really kind of run these functionality. So but yes, absolutely.

While this is a kind of physician-forward enterprise, and it definitely has some administrative components to it, the team that really kind of supports the CIN and, on the ground level are invaluable to really making it.

CHAD MULVANY

Appreciate the perspective on that. You know, we've covered a lot and it's been a fantastic conversation, but, you know, wanted to give you the opportunity to share something with your with the audience about CINs because you've built a number of them out over the years that you think is important, but we haven't covered yet?

FARAAZ YOUSUF

Yeah, I think that one of them is just kind of understanding human nature. So, as I mentioned, as a recovering healthcare administrator, who has done this over 20 years, we don't really give ourselves time to be successful. And some of that is just the environment that we grew up. And being professional firefighters in the healthcare environment, time is often not our friend.

In this particular space, it's really key to ensure that you have the right type of cultural environment to processes all that stuff, you know, baked in before you really push this enterprise. And again, I can't reiterate how many times I've seen the ones that do it well, they are able to take a pause, recognize the challenges in creating a disparate, you know, or bring together a generic group of people and then creating alignment.

It just takes time. The ones that don't do it well, they push that envelope in well-intentioned, but it often kind of crumbles because you just don't give the endeavor a little bit of time. So it's one of those things where in the very beginning, as is most things that are worth it, you got to put a little bit of time in, but once the engine really starts to warm up and starts to self-propagate, it becomes a pretty powerful force for your organization. So yeah, time. I always tell people get give it a little bit of time and and it'll get to where you need to go. Trust the process.

CHAD MULVANY

And you know I like that message. You know you can't rush love. You can't rush good pasta gravy. And you certainly can't rush the development of a CIN.

FARAAZ YOUSUF

It very well. So yes.

CHAD MULVANY

And then just to shift gears as we close out, you've spent most of your career in leadership positions in health systems. What's one piece of advice you'd give to someone who's coming into an executive or leadership role for the first time?

FARAAZ YOUSUF

Yeah, they say that's a great question. So we put a lot of pressure on ourselves. Those are any leadership positions I need leadership role. The pressure that we see most, most high functioning leaders, that pressure comes internally. It's an internal drive. And we measure our success often against ourselves. But in addition to that, there's external pressures from your board or from whatever leadership role you have, your supervisor, your, the people that you're leading those responsibilities.

So, my advice always to people is when you get into these leadership roles, you're not expected to know everything. And that pressure often kind of create that space of, oh, my God, I get to do all this stuff. Very, very quickly. I have to get in, be credible, etc. My advice to people is to give yourself a little bit of grace.

And we often are, like I said, our worst enemies, and we don't, while other people may give us grace, but I think that you don't give yourself grace. So if you act in earnest, if you're well intentioned, and you're kind of getting into the space, it's inevitable any leader is going to make some mistakes. Any good leader is going to, you know, miss something that they shouldn't have missed.

So my advice is give yourself a little bit of grace. Those lessons, those mistakes are way more valuable, in my opinion. Then, you know, if I if any one of us had this perfect track record of success, we never had any issues in our lives. I challenge those individuals. It's a really kind of take a look at what those challenges were or how they're perceiving them.

00;58;26;10 - 00;58;42;13

FARAAZ YOUSUF

But nobody walks through this, you know, leadership world without having some bumps and bruises and scars. And those are nothing to be ashamed of. I think those are what make us great leaders. And so lean into it. Give yourself a little bit of grace and, you know, hopefully, those things will work out.

CHAD MULVANY

Thank you for that. I think that's a great piece of advice. And you, you know, we've kind of covered a couple the reasons why people will make mistakes or things won't go as planned. You know, we're all trying to move as fast as we can in a complex environment that is shifting. We're acting on imperfect information. And even when you do everything right, sometimes things don't work out.

But so, I think it's important for folks to give each other grace. But then also your second point about you know, in as gentle a manner as possible, reflect on what didn't work well and take what lessons you can pull from to help you be successful in the future. And that's fantastic. Thank you. Well, Faraaz, thanks again for joining us today and sharing your insights with our listeners.

And thank you to our listeners for tuning in. If you'd like to learn more about CINs and their role in improving physician alignment and managed care performance, we have links to related content in the show notes. And if you're looking for more insights on health policy and legislation, we have a link to register for our ongoing webinar series on the OBBBA and how your organization can respond.

I hope you'll be able to join us for these important discussions, and I hope you be able to join me again in two weeks for the next episode of Achieving Health.

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