Important Considerations Before Accepting Delegation BY U T E B U R N E S S , R N
“The major
reason to accept delegation is to increase the organization’s control over decisionmaking.”
The historical growth of HMO products has resulted in the growth and expansion of delegation—not only of financial risk, but also of administrative responsibilities. In order to manage financial risk while providing highquality patient care, physician organizations developed the systems, tools, and resources needed to successfully perform these additional administrative functions and care management activities.
The growth of this delegated model is often attributed with the success of capitated, or value-based, care. In recent years, a number of organizations, including the Integrated Healthcare Association (IHA) in California, have provided supporting evidence that HMOs and delegated physician organizations demonstrate better quality and lower costs. As illustrated in IHA’s July 2016 Regional Health Care Cost & Quality Atlas Fact Sheet, HMOs consistently outperform commercial PPOs on both clinical quality and cost measures. In addition, Medicare Advantage (MA) plans typically outperform Medicare fee-for-service on both clinical quality and cost measures.
PHYSICIAN ORGANIZATIONS AND DELEGATION The evolution of the delegated model is based on the premise that a provider entity is best equipped to manage 32 l JOURNAL OF AMERICA’S PHYSICIAN GROUPS
Summer 2020
the care of its patients. The model has become common in many states, with provider organizations delegated for everything from a few to several administrative services. As more health plans delegate to provider organizations, it promotes the ability of providers to achieve the quadruple aim: improving the health of populations, enhancing the patient experience of care, reducing the per-capita cost of health, and improving the lives of healthcare providers. Assuming delegation for administrative services, along with financial risk, is fundamental to being able to control the total dollars—while managing and delivering care to patients.
WHAT IS DELEGATION? The National Committee for Quality Assurance (NCQA) defines delegation as a formal process by which an organization gives another entity the authority to perform certain functions on its behalf. Although an organization may delegate the authority to perform a function, it may not delegate the responsibility for ensuring that the function is performed appropriately. Health plans hold the license or certificate to function as health plans in the state in which they provide services. Therefore, the plans retain the ultimate responsibility and accountability for ensuring delegated functions are performed appropriately. However, delegation has many advantages for both the health plan and the provider organization. This is why so many plans delegate as many administrative functions as possible to contracted provider organizations. The terms and mutual responsibilities are typically detailed in an agreement between the plan and the provider organization.
QUESTIONS TO ASK For provider organizations, the value of becoming a delegated entity is in the increased control in key functional areas, including medical decision-making, dollars and claims payment, and provider network decisions. The key is to understand the requirements related to delegation and assess internal capacity to successfully provide these services. Some organizations take as many of the administrative functions as possible from the health plan to
