Creating Effective Co-Management Agreements

Co-management agreements between hospitals and medical practices can be mutually beneficial to both parties, but proper execution is required to realize the benefits.

Co-management agreements between hospitals and medical practices can be mutually beneficial to both parties, but proper execution is required to realize the benefits. The Healthcare Strategy Group recently published a case study of the work they did involving their client, a three-hospital system, and a medical oncology group and a surgical group.

Co-management agreements allow for a closer relationship between hospitals and practices with revenue sharing opportunities--but without full employment. These types of arrangements gained traction in the orthopedic or cardiology setting, but recently, more oncology practices have been considering it because of the current reimbursement environment. In addition, the agreements allow both parties to become familiar with the other, and can set the table for a potential foundation that moves the relationship to another level, ie, accountable care organization. The initial agreement could include opt-out options, which either party can exercise, or include “ladders” to the next level in order to provide flexibility and exclusivity for the group while staying away from volume, length of stay, referral or payer mix type metrics.

In the HSG case study, the consulting company said that while both the oncology and surgical groups provided high quality care, the patient experience was somewhat fragmented, because each group provided care independently. Faced with a competitive market, the hospitals’ goal was to improve the delivery of cancer care across the continuum.

Most co-management agreements are structured to include base fees paid to physicians for hours contributed to co-management activities and incentive fees for achievement of pre-defined quality metrics. This particular case was no exception; however, the hospital had a clear goal and was able to target desired behavior through careful selection of incentives.

As part of the base fee, the agreement included clearly delineated duties for which the physicians would be eligible for payment. These included:

  • Participation in multidisciplinary cancer committee meetings
  • Development of standardized treatment protocols
  • Education for other providers, nurses, and staff members
  • Resource planning and technology development
  • Contribution to strategy and marketing committees

For the incentive fee, the agreement addressed quality metrics relevant to the hospitals’ goals. These included: Percent of newly diagnosed cancer patients reviewed by the multidisciplinary cancer committee

  • HCAHPS: Percent of patients report that their doctors always communicated well
  • NQF 0386: Percentage of patients seen in the ambulatory setting who have a baseline AJCC cancer stage
  • NQF 0383: Percentage of visits with a documented plan of care to address pain
  • Percentage of patients referred to patient navigator

A major challenge in implementing a co-management agreement is proper selection of metrics and targets. In the HSG case study, the hospital examined national registries in which national benchmarks were available. By using national measures, performance was compared to standardized data. This built credibility with the physicians and streamlined data collection and reporting for agreement execution.

National data sources to consider include:

  • CMS (HCAHPS & Core Measures)
  • American College of Surgeons Commission on Cancer
  • American Society of Clinical Oncology
  • National Committee for Quality Assurance
  • National Quality Forum (Aggregate measures from multiple sources)


Healthcare Strategy Group. “Case Study: Creating a Successful Oncology Co-management Relationship.”