How Do You Know if a COE Is Truly Excellent?

Inclusion criteria for COE designation will depend on the procedure or service the COE is providing, but there are common types of metrics that should be assessed across each COE category.

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February 04, 2020

Centers of excellence (COEs) are one strategy for steering employees to health care providers who practice efficiently, at a high quality, for reasonable and predictable prices.

Inclusion criteria for COE designation will depend on the procedure or service the COE is providing, but there are common types of metrics that should be assessed across each COE category:

  • Adherence to evidence-based approaches to care;
  • Success rates for outcomes of care, including at least one- year postprocedure;
  • Meaningful coordination of care with community providers. Community providers – especially those with their own COEs – may chafe at their patients being steered away to other providers considered to be of superior quality. COEs must be in a position to effectively work with community providers, including in data sharing and case management;

Condition-Specific Clinicial COE Criteria

Business Group guides on cancer and fertility provide specific quality metrics for COEs for those conditions. Employers and their partners should look to national credentialing bodies for condition- or procedurespecific quality metrics.

  • Time back to work post-procedure;
  • Patient satisfaction scores;
  • Patient safety metrics, including those in the Business Group’s Safety& Quality Checklist for Achieving Preferred Hospital or Center of Excellence Status;
  • Readmission rates;
  • Rate of avoided surgeries based on second opinions provided before a procedure is scheduled. This should be assessed up to one year after the second opinion prevented a surgery to assess if the patient ended up having the surgery later with another provider; and
  • Predictable costs for an episode of care that are competitive based on the center’s performance on metrics listed above compared to the market.
  • For COE programs that require travel, look for ancillary services like travel support, companion services, and post-discharge physical therapy provided at a nearby hotel for patients no longer needing inpatient servicesbut not yet able to travel home.

Additional Considerations for Designations of COEs

  • How many facilities will be included in the COE network? Selecting a smaller set of the highest- performing facilities for COE designation can increase the quality of care at those COEs, but this practice may make it more difficult for employees to get to those facilities.
  • Will you rely on health plan COE designations or create your own? Each of the major carriers has COE criteria that are standard in their network design, but self-insured employers may create their own. Creating custom COE criteria requires clinical expertise and additional work to develop and review RFPs, but it can result in designations that better suit individual employer needs. Employers or their consultants should analyze carrier-designated COE performance compared to the market.
  • How important is cost to your COE designation? A luxury car may be more expensive but can be well worth it (if you’re into that sort of thing.) While low quality is an automatic disqualifier for COE designation, a higher- cost facility may still be worth contracting with as a COE if its quality and outcome metrics are extremely high compared to their competitors (see Figure 2).
Employer-covered surrogacy costs or benefits 

How Are COEs Reimbursed?

Most COEs are still reimbursed based on fee-for-service (FFS) payments, but many take on bundled payments that incentivize coordination of care with community providers and create additional predictability in costs over time. Others may take on some risk-sharing or outcomes guarantees. Method of reimbursement is not as important as performance on key outcomes and quality metrics, but it can be a signifier that a health system is willing to take on financial risk and is committed to excellence (Figure 3).

How Do You Engage Employees to Use COEs?

If you build it, they will… not necessarily come. There are several steps that employers should take to promote the use of their COE networks to increase appropriate utilization:

  • 1 | Identify claims triggers and other indicators that predict that someone will need surgery, then proactively target communications to them. Claims for physical therapy, for example, can be predictive of a higher likelihood of seeking orthopedic surgery in the future. Therefore, employers and their partners should use this information to reach out to individuals who have submitted such claims to make them aware of the COE program (Figure 4). Other examples of triggers for outreach prior to surgery include:
    • Searches for “surgery” or “pain” in price transparency tools;
    • Prior authorization requests for surgery at a non-COE provider;
    • Physician queries to health plans regarding whether they will be reimbursed for performing a surgery; and
    • Plan members calling advocacy services asking if a procedure will be covered.
  • 2 | Encourage cross-promotion of COEs by other vendor partners. Concierge, transparency, carrier patient navigators, ACO providers, on-site clinics, employee assistance programs (EAPs) and other vendors should refer patients to COEs, when appropriate.
  • 3 | Increase benefit for people seeking treatment at a COE. One- fifth of large employers use value-based benefit design (VBID) to steer patients to COEs, which has evidence of success. Some companies cover care at a COE at 100%, even for those employees in consumer-directed health plans (CDHPs), by covering the benefit outside of the tax-exempt health plan.
  • 4 | Limit coverage to COE providers only. This only works if the COE is associated with a travel program, making it available to all employees, or if your COE network provides meaningful geographic access for all employees. This approach drives COE utilization to 100%, but it may cause friction for patients seeking care.
  • 5 | Implement incentives for using a second opinion program prior to getting particular surgeries covered, or penalties for not using those programs. Decision support or second opinion programs can be used to direct patients to COEs.
    A few large employers have had success in dramatically increasing utilization of second opinion services when penalties are associated with non-use.

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  • 1 | Sinaiko A, Landrum MB, Chernew M. Enrollment in a health plan with a tiered provider network decreased medical spending by 5 percent. Health Affairs. May 2017; 36(5): 870-875.


  1. Additional Considerations for Designations of COEs
  2. How Are COEs Reimbursed?
  3. How Do You Engage Employees to Use COEs?