As community-based organizations take on more and more program and service delivery, lead entities can be a powerful tool for coordinating current and future needs and outreach.

What is a lead entity?

A lead entity (LE) serves as a “hub” for directing the development and facilitating the administrative oversight and governance across a network of community-based, social care service providers. Through ACL’s work with the Partnership to Align Social Care and its diverse stakeholder representation, the concepts of “Network Lead Entity” and "Community Integrated Health Network" have been renamed to “Community Care Hub (CCH).”¹ CCH is defined as “a community-focused entity that organizes and supports a network of community-based organizations providing services to address health-related social needs. A Community Care Hub may centralize administrative functions and operational infrastructure, including but not limited to, contracting with health care organizations, payment operations, management of referrals, service delivery fidelity and compliance, technology, information security, data collection, and reporting.

The LE “provides a unified and consistent approach to program delivery across a geographic area” and does so by offering “a centralized, coordinated model for service provision, administrative functions, and quality improvement” for community-based organizations (CBOs) participating in the Community Care Hub.¹ These administrative services drive standards and efficiencies that are critical to helping CBOs respond to the contracting needs of health care payers—health plans, Accountable Care Organizations (ACOs), and other integrated health care entities—in a competitive marketplace.

Building a new LE? Start with a business plan

For a new LE, the crucial first step is to start with a business plan. To build a solid business plan:

1. Be sure designated business leaders listen closely to CBOs in the LE’s Community Care Hub
2. Understand what these CBOs do well (and not as well) and which products and services participating CBOs can competitively offer through the LE
3. The LE should perform an organizational readiness assessment that may include a “SWOT” analysis to identify strengths, weaknesses, opportunities, and threats, as well as a market assessment, among other steps.

Performing a market assessment is essential to understanding the LE’s potential “clients” (e.g., payers) as well as important health policy influencers in the community(ies) you intend to serve and what social service needs exist. Use this assessment to ensure the LE’s proposed product and service offerings are in alignment with the market’s needs. 

The readiness assessment and SWOT analysis can guide the LE in developing a road map of business functions that need improvement as well as areas that may provide competitive advantages. Combined with the market assessment, the externally focused areas of the SWOT (the "opportunities" and "threats" segments) will help create a road map that aligns with the current market’s needs. Additionally, examining threats should expose competitor organizations and potential market disruptors. Take a hard look at these areas to determine whether you are duplicating what the market already provides or addressing an unmet need. 

The value of a lead entity to community-based organizations

The good news is that CBOs have broad experience operating and participating in collaborative networks similar to health care administrative service organization (ASO) networks. Throughout much of the history of social services, networks have been created to address government program requirements. However, these historical CBO network relationships need a new model and new expertise for health care payer contracting.

For example, legacy CBO networks were typically formed to meet specific program eligibility, service, and jurisdictional expectations that frequently do not align with the needs of health care payers. Additionally, much of the infrastructure created for those legacy programs cannot be used for other purposes. For example, many states provide social care service providers with specific, state funded and procured data systems and reporting requirements that do not align with, and may not be available for use with, health care payers. Because of this dependency on state rules and systems, CBOs often lack the unrestricted funding necessary to independently acquire appropriate computing hardware, data systems, and the technical expertise to satisfy health care contracting expectations. 

CBOs also typically do not have staff expertise and health care market skills, such as data interoperability, pricing, sales, and marketing to compete and may not have personnel with experience in other areas of health care and payer operations. Acquiring these talents and administrative capabilities is expensive. By pooling resources through an LE, community-based organizations can access an affordable opportunity to share technical tools and administrative expertise that will increase the CBOs’ attractiveness as they pursue health care business opportunities.

The value of a lead entity to payers

While contracting between health care payers and CBOs is still relatively new, recognition of the significant role social determinants of health (SDOH) play in overall well-being has increased exponentially over the past ten years. This has led health policy leaders to push for improved health and social care alignment and is driving health care payers to seek cost effective SDOH solutions. This, in turn, is leading to increased interest in health care payer-CBO engagement. To take advantage of this increased interest—and to successfully contract with health care payers—CBOs must adopt outcomes-focused social care solutions and business practices that deliver consistent value, improve well-being, and address three primary payer considerations:  

• What CBO services are most desired by and provide the best value for the payer’s members and the payer’s organization? 
• Can the CBO effectively and efficiently offer the desired social care solution at a competitive price?
• Can the Community Care Hub CBOs consistently deliver and meet the payer’s performance and quality expectations?

An integral part of each of these questions is the “buy versus build” dilemma. If the payer builds it, their initial costs will likely be much higher than buying the service from an existing service provider whose incremental cost of offering the service is less than the cost to an organization that must start from scratch. On the flip side, building it allows the payer tight control over branding and execution. Once operational, building it also allows for administrative simplicity and replicability to customize and scale across new markets with reasonable precision and efficiencies.

CBOs can significantly increase the attractiveness of the “buy” side in this equation by constructing and formalizing a Community Care Hub that brings CBOs together to leverage efficiencies and scale through common standards and processes with a single, streamlined marketing, contracting and accountability structure. That structure is housed within the LE. With an LE, CBOs can come together to address many of the payer advantages associated with the “build” side of the equation and enhance many of the “buy” side advantages. For large health care industry payers, executing contracts with an LE provides the advantages of one-stop shopping for a solution that covers the payers’ entire geographic area, supports administrative simplification, and provides a single point of authority for the payer.

The role of a lead entity in contracting

The LE concept is not new. In fact, health care providers have been organizing similar networks for over 40 years. The reasons why health care providers create these ASOs is simple: these ASOs allow independent health care providers to maintain a degree of autonomy while leveraging the value of their collective organizations for specific administrative functions. 

There are two prevalent structural roles used by these health care ASOs: 

1. Contracting ASO: The contracting ASO holds the power to contract. In this form, payers contract with a single ASO to access all or a subset of the ASO’s network of health care providers. The contracting ASO also typically handles many common administrative functions, including billing, sales and marketing, data systems and IT, client services, quality assurance and performance improvement initiatives, managing standards and processes, etc. This leaves the health care providers to do what they do best – address the health care needs of their patients.
2. Facilitator ASO: The facilitator ASO acts simply as a contract facilitator. For a fee, the facilitator ASO markets the network of health care providers to potential payers. Once an agreement is reached, the payer then directly contracts with the ASO’s network of health care providers under a pre-arranged set of network requirements and expectations. Facilitator ASOs may also oversee other administrative functions for the network’s providers.

One additional difference between these two types: under the contracting ASO, the ASO is taking on the ultimate responsibility to ensure service execution and that comes with associated liabilities. Under the facilitator ASO, those responsibilities and liabilities remain with the health care providers in the network.

For more information on the differences between contracting and facilitator models, see page three of the Aging and Disability Business Institute’s Resource Guide.²

Key questions for developing a lead entity 

Start with the end in mind. In other words, first decide:

1. Which functions the Community Care Hub's CBOs want and need the LE to provide
2. Which functions will remain with each CBO in the Community Care Hub
3. Which functions the LE may simply coordinate

These decisions should be driven by a relentless focus on efficiency, quality, and standardization. Unfortunately, CBOs often recognize the need for an LE structure and immediately jump into discussions around the LE’s structure (or “form”). Doing this in the wrong order is like constructing a new building and, once it is built, beginning a discussion around how your organization might use the building. Obviously, it would be better to identify the need and then construct the building to fit that need!

So think of the LE as a new small business. What roles should it perform and what roles (or “functions”) should it leave to each CBO in the Community Care Hub?

Once the LE’s roles are clearly defined, consider which form is best for executing the functions that will be under its purview. When considering the most appropriate form for an LE, first address the following key questions: 

• What functions were selected for the LE to perform (internally or through contracts with others)? 
• Do the participating CBOs want to actively participate in the governance of the LE? 
• Does one of the existing Community Care Hub-participating CBOs have the expertise and capacity, and desire to shoulder the responsibilities of being the LE as well as being a CBO in the Community Care Hub? 
• If so, the key question that should not be ignored is this: do the rest of the CBOs in the Community Care Hub have full confidence and trust in that CBO (the “Lead Entity”) to act in the best interests of everyone in the Community Care Hub? For this to work, a high level of trust is essential.
• Is there a large enough potential volume of business to support a standalone LE administrative structure?
• Last, how will the LE be financed? 

Find common features among LE models on page four of the Aging and Disability Business Institute’s Resource Guide.²

No two lead entitites will look alike

Form follows function. No two LEs look the same or perform the same functions. An LE’s responsibilities should reflect the unique functional strengths and challenges of the CBOs in the Community Care Hub, the diversity of the local communities it serves, and the health care payer needs and desires in that community. This local character can be a strength that organically evolves as the LE matures.

If those building the LE focus on the market needs, character, and administrative needs of the local community and the Community Care Hub’s CBOs, the LE’s functional needs will rise to the top. Once those needs are identified, a clearer picture of the best form for the LE should emerge. Best wishes for success! 

Additional information on contracting is available from the Aging and Disability Business Institute’s Contracting Toolkit.³

Sources:

1. Administration for Community Living, Center for Integrated Programs. No Wrong Door Community Infrastructure Grants - Scaling Community Care Hubs through Lead Entities. Found on the internet at https://www.grants.gov/web/grants/view-opportunity.html?oppId=330525
2. Aging and Disability Business Institute. Building a CBO Network for Healthcare Contracting: Choosing the Right Model. Found on the internet at https://www.aginganddisabilitybusinessinstitute.org/adbi-resource/building-a-cbo-network-for-health-care-contracting-choosing-the-right-model/ 
3. Aging and Disability Business Institute. Contracting Toolkit. Found on the internet at https://www.aginganddisabilitybusinessinstitute.org/adbi-resource/contracting-toolkit/

This project was supported, in part by grant number 90CSSG0048  from the U.S. Administration for Community Living, Department of Health and Human Services, Washington, D.C. 20201. Grantees undertaking projects under government sponsorship are encouraged to express freely their findings and conclusions. Points of view or opinions do not, therefore, necessarily represent official Administration for Community Living policy.