Header graphic for print
Physician Law Current news, updates, & useful tips relating to legal issues affecting physicians & non-institutional providers in their personal & professional lives

Take an Active Role in Defining Your Payer Relationships

Posted in Reimbursement

If you’re not sure what your managed care payers want from you, maybe you need to tell them. Many physicians are (understandably) complacent about taking an active role in defining in their payer relationships. Not surprisingly, managed care payers have had very little incentive or ability to negotiate special arrangements with a diverse and disintegrated physician practice marketplace. However, as the marketplace consolidates, larger independent physician practices may have an opportunity to begin to define in their payer relationships.

Many physicians believe that insurance companies have exclusive access to the data necessary to define the specific cost controls and quality measures they will demand from the physician marketplace. In fact, while payers have historically had access to more utilization and quality data than the physician practices, with the implementation of electronic medical records and sophisticated IT systems, larger practices now have access to key data with which to define their quality, cost and utilization data. Very often when I talk to physicians about negotiating their managed care arrangements, they say that they don’t know what their payers are looking for. Consider, however, that this may be because the payers themselves don’t know what they are looking for.
 

Physicians are in a better position than virtually any other player in the healthcare marketplace to identify quality improvement and cost saving opportunities. With a reasonable amount of effort, most practices can identify at least a handful of areas where quality of care can be improved or significant/meaningful cost savings can be achieved. With this information, practices should consider approaching their payers to see if the payers will consider establishing reimbursement arrangements which reward achievement of specific goals surrounding these opportunities.

Here are a couple of tips practices can use to get started:

1. Establish a physician-lead managed care committee. This committee can be charged with identifying managed-care opportunities and exploring them with practice payers.

2. Identify high cost services offered by the practice and ways in which those costs can be reduced;

3. Identify the data necessary to measure cost and quality improvements and begin tracking them;

4. Identify achievable and measurable goals for quality and cost improvement for presentation to managed care payers. Note that payers may want to see empirical evidence of achievable savings and or quality improvements before negotiating. Develop and document case studies which support your practice’s proposals.

The only thing certain about the practice of medicine today is that change–in some form–is coming. We also know that cost, quality and convenience are and will continue to be the values that employers and payers are looking for in their health care providers. Physicians have an opportunity, perhaps now more than ever, to define the healthcare market and their role in it. The practices that will survive and thrive in the evolving health care market are likely to be those that take the initiative to not only adapt to change but to shape it.