Population Health

Case Study | Union Health – Population Health Management

Improving Patient Care and Optimizing Financial Performance


As health care continues to shift from productivity and fee-for-service models to more of a quality and performance-based approach, value-based care (VBC) strategies, including population health management (PHM) programs, are becoming a top priority for health care systems across the nation. Leaders within these organizations are searching for more effective and sustainable solutions as they navigate declining reimbursement, regulatory changes, physician burnout and the need for better patient care and lower costs.

These challenges can be addressed with a tailored PHM strategy that supports organizational improvement in the following key areas:

  • Maximizing operational processes and outcomes
  • Developing a support network for physicians and advanced practice providers (APPs)
  • Mitigating risk
  • Enhancing performance in a value-based environment

By identifying actionable and targeted opportunities for improvement through a series of evaluations and readiness assessments, Union Health, an integrated, not-for-profit health system based in western Indiana, was able to develop comprehensive VBC and PHM strategies better aligned with their patient-focused approach to coordinated care.

The Situation

As a six-year participant in a local, tertiary accountable care organization (ACO), Union Health had fully outsourced its operational leadership to the parent ACO member. This legacy partnership and arrangement was simply not producing the desired results from a clinical, operational or financial perspective for Union Health – with data and analytics, physician engagement, embedded care management and post-acute care spend being specific areas of concern. Around 2018, Union Health was at a strategic crossroads in regard to its investment in VBC initiatives as the PHM program was not generating the desired results.

This highlighted the need to more effectively integrate operations across departments and service lines, align incentives for leadership and physicians, and reallocate related resources. At the same time, many competing health systems in Indiana were already realizing the benefits of a highly functional PHM program. The leadership at Union Health recognized the key to success would be through a more consistent approach, improved internal processes and engaged leadership.

The organization decided to narrow its focus by strengthening internal capabilities around care management, physician engagement, analytics and reporting to help ensure greater levels of risk-based contracting success with the Centers for Medicare and Medicaid Services (CMS) and other commercial payors.

The Approach

In late 2018, Union Health was presented with an opportunity to partner and align with a nationally recognized health system in a more advanced Next Generation ACO. A Next Generation ACO model offers more risk and reward (both upside and downside risk scenarios) for health systems who already have highly functional internal capabilities in place to support performance. These models represent some of the most advanced value-based arrangements and require greater system-wide operational sophistication. Union Health was looking for a hands-on approach to align initiatives and ensure success.

In order to assess internal operational capabilities, physician and advanced practice provider engagement levels, incentive models and other key functional areas related to VBC, senior leadership at Union Health collaborated closely with SullivanCotter to help quantify this opportunity. After conducting a comprehensive VBC readiness assessment, which included a close examination of the program’s core functional areas such as partnerships, utilization management, attribution and chronic disease management, Union Health elected to partner with the larger health system who had already demonstrated greater success in the Next Generation ACO model. Moreover, Union Health committed to this arrangement for a minimum of two years to support the development of a strong VBC program. Health systems across the country often partner and align with other systems or independent groups to help mitigate risk and better manage overall cost.

SullivanCotter’s primary role with Union Health was to develop and implement an independent PHM program that would help to improve risk-based contracting performance. The program focused on five core principle areas:

  • Annual care
  • Risk acuity
  • Utilization management
  • Care management
  • Incentive alignment

With these principles in mind and a significant amount of physician and APP input and collaboration, the design of the system’s VBC strategy and approach included the following phases:








To help implement the multi-phased strategy, a task force consisting of Union Health’s executive team and leaders in Business Development, Population Health Management, Physician Services, Utilization Management and Care Management was created to help oversee the process. The initial phase of the project consisted of in-depth interviews with physicians and stakeholders, a thorough review of data and performance metrics, and an operational Readiness Assessment. Key findings from this phase revealed:

  • Low engagement from physicians, APPs and other staff with annual care and preventative medicine strategies
  • Significant lack of Care Management resources and coordination such as outpatient pharmacy support, discharge planning and risk stratification
  • Limited definition of roles and responsibilities for Care Management and Operations team members specific to VBC and PHM
  • Insufficient value-based data resources such as reporting capabilities, quality dashboards and clarity surrounding key performance indicators
  • Lack of clarity in the scope of practice for nurse practitioners and physician assistants in current team-based care model
  • Physician and APP compensation and incentives were not aligned with VBC strategies and initiatives; no incentive for physicians and APPs to enhance value-based performance
  • The CMS benchmark or threshold was not met in the contract in order to achieve shared savings – resulting in negative financial impact and poor contract performance

Using the findings from this readiness assessment, SullivanCotter helped executives and physicians at Union Health to further develop a roadmap for the Program Development and Implementation phase.

Roadmap initiatives included the development of:

  • Physician and APP educational and engagement materials for workshop sessions
  • Clearly defined roles and scope of practice for nurse practitioners and physician assistants in primary care
  • Outpatient-focused clinical capacity analysis to support Care Management
  • Comprehensive annual care strategy focused on prevention and wellness
  • VBC Management team to monitor performance and contract relationships
  • Physician and APP incentive components to enhance VBC and PHM
  • Standardized dashboards for the entire care team
  • Post-acute care strategies more closely aligned with Care Management
  • Strategies to monitor ongoing performance

Once the initial components of the roadmap were deployed, the task force worked with SullivanCotter to begin the planning process for two remaining phases within in the PHM model: Physician and APP Incentive Alignment and Performance Review and Monitoring. These processes were also implemented and rolled out during PHM program development and focused on monitoring and enhancing performance in all value-based contracts.

The work accomplished in these two phases included:

  • Population health metrics related to annual care, preventative screenings, vaccinations, utilization management, Care Management team engagement and risk-adjustment
  • Value-based compensation design concepts and continued education provided to physicians and APPs
  • Regular monthly huddles with Care Management team members to review patient volume
  • A risk stratification process to determine appropriate care levels for patients
  • Physician and APP interviews for feedback and evaluation
  • Physician and APP engagement scoring and methodology
  • Refinement of key performance indicators
  • Development and rollout of physician and APP performance dashboard

The Results

Through the investment in and development of the PHM program and other related VBC initiatives, Union Health was able to achieve the following results over a 12-month period:

  • Achieved significant shared savings in year one of the Next Generation ACO as compared to historical performance with improvement of over $6M
  • Reduced per member per month spend compared to prior year by 12%
  • Implemented a newly redesigned approach to primary care by focusing on team-based care delivery
  • Increased the number of completed and billed Medicare Annual Wellness Visits (AWV) from 900 to 5900 with AWV revenue up from approximately $150,000 to $944,000
  • Raised the number of documented Care Management team episodes by more than 200%
  • Lowered number of emergency room visits in the Next Generation ACO population that were deemed “PCP treatable”
  • Documented more than 100 Care Management success stories
  • Boosted the clinical diagnosis documentation rate by more than 20%
  • Enhanced coordination with post-acute care partners and facilities to help reduce total cost of care for ACO patients by 11%
  • Conducted regular meetings and monthly Care Management huddles to enhance physician and APP engagement with knowledge of VBC and PHM concepts and monitoring of individual performance
  • Initiated strategic planning to redesign primary care and other specialty compensation models with a focus on performance and value

Tips for Successful VBC/PHM Program Implementation

  • Assign dedicated resources to care team optimization
  • Collaborate with and gather input from physicians and APPs to strengthen engagement and buy-in
  • Align physician and APP incentives to help streamline and reward clinical efforts
  • Establish achievable milestones to maintain momentum and engagement
  • Conduct regular key stakeholder meetings to provide updates on progress, celebrate successes and course-correct as needed

Lessons Learned

Despite the many factors that differentiate health systems, such as organizational size, complexity, or the communities they serve, there are a common set of fundamental guiding principles and success factors that can be tailored to each organizations’ VBC and PHM strategies.

Union Health’s multi-phase approach – including Readiness Assessment, Program Development and Implementation, Physician and APP Incentive Alignment, and Performance Review and Monitoring – has proven to be an effective way of improving overall performance through the creation of comprehensive VBC and PHM strategies.

Dedicated to enhancing internal capabilities, resources and value-based performance with the objective of improving population health, Union Health partnered with SullivanCotter to develop a long-term, sustainable strategy and implement a comprehensive program to help to improve access and health outcomes for its patients, strengthen physician and APP engagement, and significantly boost financial performance.

Leveraging data-driven insights and over 25 years of experience, SullivanCotter partners with organizations to develop comprehensive value-based care and population health management strategies tailored to the unique needs of each client.

Contact us for more information.

HFMA | Navigating Change: Implications of CMS's 2021 Physician Fee Schedule

Addressing the impact on physician compensation and productivity

Featured in HFMA's hfm Magazine, SullivanCotter discusses changes to the 2021 Physician Fee Schedule and highlights challenges health care organizations and their financial leaders are facing as they look to address the impact on physician and advanced practice provider compensation and productivity.

Due to the magnitude of the changes within the final rule for the 2021 Physician Fee Schedule, organizations with productivity-based physician compensation plans must understand the implications of these changes and on payer payments, productivity levels, survey benchmarks and regulatory compliance.

Learn more about the short- and long-term impact of the changes and different approaches to consider as you move forward with 2021 compensation decisions.


Understanding Co-Management Arrangements

Key drivers, compensation structures and payouts, and performance metrics and target setting

As health care continues to shift its focus from volume to value, hospitals are implementing strategies to help strengthen hospital-physician alignment. Co-management arrangements are contractual agreements between hospitals and physicians that establish shared responsibility for particular service lines. These agreements are commonly structured with an even split between both base and incentive compensation components. Base compensation is tied to the number of management service hours required to fulfill baseline duties, while incentive compensation is linked to strategic performance measures.


WEBINAR RECORDING | Physician Enterprises After COVID-19: Capturing and Assessing Opportunities

Hosted by McDermott Will & Emery


Physician enterprises will face lasting changes to their operations following the coronavirus (COVID-19) public health emergency. Transactional opportunities have also shifted, and physician enterprises and their counterparts have new factors to consider when assessing and pursuing collaborations and other transactions in a post-COVID-19 world.

Led by McDermott Will & Emery, SullivanCotter's Kyle Tormoehlen, Principal, and other strategic health care consultants joined leaders from hospital and health system physician groups and private equity-backed physician groups to highlight how physician enterprises can position themselves for success in the new healthcare landscape.

This webinar includes a discussion of:

  • How has COVID-19 changed the healthcare and investing landscape?
  • How can physician practices shift their means of care delivery, including telehealth solutions, now and after COVID-19?
  • How have operational challenges impacted physician practice valuations?
  • What transactional opportunities have arisen from the public health emergency?
  • How can physician enterprises and their counterparts execute successful strategic collaborations?

WEBINAR RECORDING | Designing Transitional Compensation Models During the COVID-19 Pandemic

Cutting Edge Issues and Trends in Health Care Fair Market Value

Webinar from the American Health Law Association which features SullivanCotter's Kim Mobley discussing best practices for addressing COVID-19-related compensation for front line physicians.


Length: 90 minutes
Level of Difficulty: Advanced
Price: $149

Description: Recently, the government issued blanket Stark waivers and Anti-Kickback guidance related to COVID-19 physician arrangements. This new flexibility is welcome news to hospitals, health systems and other organizations that have been tackling challenging physician contracting, compensation and staffing issues during the COVID-19 pandemic.

In addition to discussing the blanket waivers, the webinar will explore developing best practices for addressing COVID-19 coverage for front-line employed physicians, redeployed employed physicians and physicians providing coverage under exclusive provider arrangements.  Speakers will discuss potential regulatory landmines and fair market value strategies and considerations.

2021 Evaluation and Management CPT Codes

Understanding the Impact on Physician Compensation


Updated: February 2021

INFOGRAPHIC | Considerations for Addressing the 2021 E&M Work RVU Changes
ARTICLE | Navigating Change: Implications of the 2021 Physician Fee Schedule
SullivanCotter's CPT Advisory Services and Technology Solutions

Every year, the Centers for Medicare and Medicaid Services (CMS) evaluates the recommendations of the American Medical Association’s (AMA) Relative Value System Update Committee (RUC) and conducts its own review of the Work Relative Value Unit (wRVU) values associated with each Current Procedural Terminology (CPT) code to determine if wRVU revisions are needed based on the time, skill, training and intensity necessary to perform each service.

The degree of change varies from year to year, and the impact on individual specialties depends on which codes are modified and the extent to which the values are adjusted. CMS has issued the 2021 Physician Fee Schedule final rule and has significantly overhauled the Evaluation and Management (E&M) code documentation requirements, time-effort recognition, and wRVU values for face-to-face new and established patient office visits. These changes were effective as of January 1, 2021.

Many physicians provide office-based E&M services and, when broad changes such as this occur, the resulting impact can be significant. This article will address:

  • CMS efforts to recognize increased work effort for office visits as well as a summary of the 2021 changes to E&M codes.
  • The reimbursement impact on Medicare physician services as well as the likely downstream effect on commercial payer physician reimbursement.
  • The potential impact on physician and advanced practice provider (APP) reported productivity levels for various specialties.
  • The potential unintended impact on compensation arrangements – especially wRVU production-based plans or salary-based plans with wRVU-based performance measures.
  • Other variables that could influence the assessment of your organization’s wRVU productivity.


“Patients Over Paperwork” is a CMS initiative based on the AMA’s RUC recommendations. The goal of this initiative is to reduce burdensome regulations, enhance efficiency and improve the physician experience. The E&M review and adjustments are steps towards removing regulatory obstacles that impede a clinician’s ability to spend time with patients. The first wave of this initiative includes the modification of ten E&M codes used for billing new and established office-based patient visits (codes 99201-99215). Other E&M code groupings (inpatient, skilled nursing, etc.) will be reviewed at a future date.

Several factors were considered when formulating the 2021 changes including:

  • To maintain the “Patients Over Paperwork” goal, CMS kept the documentation reduction requirement for appropriate coding.
    • CMS estimates that these adjustments will save 180 hours of paperwork for physicians annually.
  • A time study commissioned by CMS determined that, due to the added responsibilities physicians have experienced over the last five years, an increase in wRVUs for many E&M codes is justified. These include:
    • Longer patient face-to-face time during visits.
    • Increased non-patient time responsibilities such as Electronic Medical Record (EMR) documentation.
    • Added non-reimbursed physician time to coordinate team-based care and population management.
  • To recognize the occasional extended time patient visit, CMS incorporated an add-on code (G2212) for every 15 minutes of additional work effort beyond the time expectation associated with codes 99205 and 99215.
    • This extended time method is similar to anesthesiology work value measurement that credits added time units along with the base procedure.
  • Implementation of another add-on code (G2211) has been deferred until January 1, 2024.  At that time, an add-on code will be available to provide additional recognition (reimbursement and wRVU credit) for qualified, severe, or complex chronic patient conditions.

These adjustments, along with CMS quality incentive payments, signify CMS’ increased recognition of how the process of delivering high-quality health care has changed. The impact of these changes will result in material increases in reported wRVU productivity for office-based specialties. Table 1 below compares the 2020 and 2021 E&M code time allocation and wRVUs.

Table 1: Time Allocations and wRVUs Adjustments: Current versus 2021


1. How will the 2021 wRVU changes impact the measurement of physician productivity?

This is often the first question that arises when organizations try to assess how wRVU changes will impact reported productivity internally, but also when comparing to published national survey benchmarks. To help analyze the impact, SullivanCotter utilized its proprietary database consisting of individual CPT code volumes and modifiers for approximately 20,000 physicians across 100 different specialties. We recalculated two versions of wRVU productivity for comparison: one based on the 2020 wRVU values, and one based on the new 2021 wRVU values. By keeping volumes and distribution constant, the change in reported wRVU productivity is entirely due to the 2021 wRVU adjustments.

Summary findings indicate that of the 100 specialties reviewed, wRVU benchmarks for 46 specialties increased between 3% and 11%. The modeling shows that wRVU benchmarks for an additional 25 specialties increased by greater than 11%. Table 2 below shows the resulting impact on reported wRVUs by number of specialties. This represents a significant change to wRVU benchmarks, and it will be important for organizations to understand the impact on physician compensation and physician practice economics.

Table 2: Overall Specialty Impact of 2021 E&M Changes

Table 3 below illustrates a sample of some of the individual specialties with notable increases to reported wRVUs.

Table 3: Median wRVU Impact of 2021 E&M wRVU Changes

2. How will wRVU changes impact physician compensation benchmarks?

The answer to this question depends on the structure of an organization’s compensation program. If a plan is based heavily on historical compensation per wRVU benchmarks, there will be, all this being equal, an immediate increase in the amount of compensation paid to physicians as a result of the change in wRVU values. According to SullivanCotter’s 2020 Physician Compensation and Productivity Survey, nearly 3/4 of organizations indicated that wRVU productivity drives more than 50% of physician total cash compensation. Conversely, physicians with salary-based plans linked to national compensation benchmarks will not experience an immediate increase in compensation but may experience a change over time as benchmarks evolve.

Over 95% of the organizations participating in the survey utilize national benchmarks to determine annual salaries and/or compensation per wRVU rates. Understanding how to use these benchmarks appropriately is/will be important during the 2021 and 2022 transition years.

SullivanCotter reviewed several different compensation methodologies to estimate the potential impact to survey benchmarks. Considering the E&M code wRVU changes and assuming no modifications are made to compensation plan methodologies we estimate average clinical compensation will increase by approximately 6% assuming no changes in compensation rates is made. This analysis does not include implications from other market factors such as demand, inflation, cost-of-living, changes in productivity and more. As with reported wRVUs, this impact will vary significantly by specialty. Table 4 below highlights the estimated changes to survey benchmarks. See Column A to find the estimated change in compensation.

If an organization utilizes wRVU productivity targets to determine compensation using the 2020 survey data while calculating wRVUs using the 2021 wRVU schedule, this will result in higher compensation as physicians meet or exceed the production targets at an increased rate.

Similarly, if an organization uses the 2020 compensation per wRVU survey benchmark while using the CMS 2021 values to calculate physician productivity, clinical compensation will increase as a result of using compensation per wRVU rates calculated on the older (lower) wRVU values. Using Internal Medicine as an example, the following graph represents the potential unintended consequences for organizations using a variety of compensation plan designs assuming no change in compensation plan methodology. The potential impact varies significantly depending on whether an organization primarily utilizes a wRVU incentive plan versus a salary-based plan.

To avoid these pitfalls, organizations should conduct a strategic review of the 2021 Physician Fee Schedule changes to determine the impact on their physician compensation plans. Considerations include awareness, appropriateness, affordability and feasibility of modifications as well as physician expectations regarding any potential change in compensation.

3. If organizations utilize compensation per wRVU benchmarks, what should they expect with regard to the 2021 survey benchmarks?

As mentioned above, nearly 75% of organizations in the SullivanCotter 2020 Physician Compensation and Productivity Survey utilize the compensation per wRVU benchmark in determining physician compensation. For any organization using the 2021 wRVU values in their compensation plan, a fundamental understanding of how market benchmarks will change is important.

In this article, we reviewed estimated increases to both wRVUs and clinical compensation. However, because the expected change in wRVU values exceeds the expected change in clinical compensation, compensation per wRVU ratios are expected to decrease in future surveys. See Column C in Table 4 for the estimated impact on specific specialties. Overall, our study indicated a 3% decrease in the TCC per wRVU rate, but with significant variability by specialty.



As organizations continue to evaluate the impact of the final rule during this industry transition, there are several other factors to consider. These include:

  • Will moving forward with historical compensation per wRVU rates and 2021 wRVU values unintentionally create Fair Market Value (FMV) and Commercial Reasonableness (CR) risks due to the resulting higher compensation payments?
  • Do compensation incentive plans include supervisory payments to physicians based on APP productivity levels? The 2021 wRVU value changes will also affect codes utilized by APPs.
  • For specialties that are paid shift rates, are there additional incentive opportunities based on wRVU productivity?
  • Does the organization pay for physician virtual care visits by tying them to office visit E&M values? This could result in unintended higher pay for virtual care.
  • CMS has added G2212 as an add-on code intended to be used with 99205 and 99215 for each additional 15 minutes above 70 minutes of documented time associated with an individual patient visit. The assumptions and analysis above do not account for changes in the distribution of E&M coding or increases in reported wRVU productivity due to this new code. A wRVU increase does not automatically equate to an equal reimbursement increase.
  • CMS also applied an annual budget neutrality factor which caps overall physician fee schedule reimbursement to avoid a significant increase in CMS payments. The reduction in the CMS conversion factor, in combination with significant increases in wRVUs for cognitive specialties, may result in additional compensation paid to physicians. However, revenue increases are unlikely to offset the more significant increases in wRVU-based compensation if 2021 E&M code values and historical compensation per wRVU rates are utilized going forward.

The published 2021 Physician Fee Schedule final rule reduced the Medicare conversion factor by 10.2% to maintain statutorily required budget neutrality. However, on December 27, 2020, the Consolidated Appropriations Act of 2021 – including provisions that temporarily mitigate a portion of the conversion factor reduction – was signed into law. The CMS final rule tables were later published with the 2021 Medicare conversion factor set at $34.89. This is a reduction of 3.3% from 2020. However, expected Medicare revenue increases resulting from the combination of higher RVU values and a higher than anticipated conversion factor rate, are unlikely to offset the more significant increases in wRVU-based physician compensation absent any change in compensation plan rates going forward.


SullivanCotter offers advisory support and technology solutions to help your organization understand and respond to the potential impact of these changes.

To learn more, contact us at 888.739.7039 or info@sullivancotter.com


Physician Compensation and Compliance: More Than Just the Individual Components

This Briefing is brought to you by the Fair Market Value Affinity Group of the American Health Lawyer's Association's Hospitals and Health Systems Practice Group.

Properly assessing the fair market value and commercial reasonableness of physician compensation arrangements in an increasingly complex regulatory environment is more critical than ever before. As the number of related health care settlements continues to grow, organizations are under increased scrutiny regarding both the physician compensation and contracting processes and must have protocols in place to help ensure compliance and mitigate risk.

As a member of AHLA's Fair Market Value Affinity Group, SullivanCotter's Kim Mobley, along with other industry experts, recently contributed to this Practice Group Briefing which includes an analysis of the current regulatory environment, insights from both an attorney's and a valuator's perspective, a step by step process for helping to support compliant compensation arrangements, and other important questions to consider.


Copyright © 2020, American Health Lawyers Association, Washington, DC. Reprint permission granted.

Navigating Commercial Reasonableness of Physician Compensation Arrangements

The Changing Health Care Environment

To stay compliant with evolving regulatory requirements, health care organizations must have the appropriate structures in place to help mitigate financial, resource and reputational risk for potential physician compensation violations related to the Stark Law, the Anti-Kickback Statute and other IRS not-for-profit regulations.

Understanding Commercial Reasonableness in the context of a rapidly changing health care environment is critical, but navigating what this requirement entails can often be challenging. In this piece, SullivanCotter highlights typical areas of focus to consider when assessing the commercial reasonableness of physician compensation arrangements.