Manage your practice’s destiny under a third party regime
by consistently controlling these six variables…
First Variable: PARTICIPATION
Should I or shouldn’t I participate in managed care?
This is a very complex question with no simple answer, since managed care is here to stayfor now! Thus, one will have to participate to some degree in order to survive and be successful as a chiropractor in meeting or beating the competition for patient attraction and retention.
Second Variable: DIRECTION
Who or what sources can provide me with the best answers concerning my practice’s participation in managed care?
Remember, no one currently has all the answers concerning managed care because it is regenerating almost daily. Presently doctors have little or no input as to how it should be generating. However, as managed care changes so will your sourcing for answers.
Available sources today for answers to your questions are: national and state associations, chiropractic schools and journals, health care consultants, managed care representatives, state insurance commissions and colleagues who actively participate in managed care plans.
These colleagues can and will give you much insight into which plan, or plans, are acceptable for your participation. However, your own experience will ultimately become the best educator and yardstick to measure plan acceptability.
THIRD Variable: PLAN ACCEPTABILITY
“Plan Acceptability” will be measured by:
- The favorability of the reimbursement of fees; e.g., the reimbursement amount as it relates to the original fees generated or charged;
- The timeliness of reimbursement after submission of paperwork and charges;
- The patient volume under a given plan;
- The administrative ease of working within a given plan from a staff and business perspective.
Once you have tested and measured an acceptable plan in which you are participating, use this plan as the benchmark for all other plan acceptance. If other plans meet or beat reimbursement of the accepted plan, they then meet the established criteria and are acceptable for participation; if they do not, then you are armed with enough information to reject them until they do meet the acceptable criteria. However, you must be willing to review all previously rejected plans at least semi-annually for possible changes that render them acceptable due to plan influence in your particular marketing demographic area or community.
Fourth Variable: YOUR OWN ADAPTABILITY TO CHANGE
The only absolute in life is change!
Once again, managed care is here to stay for now. Thus, those willing to see change in a favorable light and who are willing to adapt will have the best potential to survive successfully. Therefore, act rather than react; the successful survivor of the managed care system will not waste time with negativism but will move forward in spite of frustrations with the required process. Keep in mind that by the year 2010, 90% of all persons in the United States will be covered by a managed care plan. The changes you continually make in the process of moving forward will become the absolute, so don’t let it become chaotic for you and your staff.
Fifth Variable: PROFITABILITY AND EFFICIENCY
Once accepted into a plan, the practice receives discounted fees for services rendered. Thus, net revenue, as it relates to gross revenue, is reduced significantly. In most cases, once the practice has reached 40-50% of its patient base as managed care patients versus fee-for-service patients, the practice will require a 25-30% increase in gross revenue to maintain the same net revenue as previously experienced without the managed care participation. Therefore, efficiency will become the most important element to profitability. Staff efficiency, computerization, office design (to obtain maximum patient flow or movement), standard care versus extra care implementation, internal marketing, overt training and shared overhead will all become major factors in aiding and maintaining profitability. Strict attention and adherence to programs and policies supporting these factors will become mandatory for maximizing patient and business revenues.
Your chiropractic staff is your largest expense; however, they are also your key to “affording” managed care. Without a well-trained and efficient team, there is no way you can win in this era of managed care. Thus, training will become one of your most important allies. Training will create efficiency which will allow profitability under managed care.
SIXTH Variable: GET YOURSELF AND YOUR STAFF IN THE MANAGED CARE MODE!
1. Knowledge is power.
The first rule of managed care is that all your staff must be informed and trained. Employees will need to be familiar with all managed care plans and the patients covered by them. Written information (in the form of an office or procedures manual) should be available for you and your staff’s immediate use at the front desk. Color code managed care patient charts so all those dealing with these patients are aware that this patient will receive standard care, and the staff should be totally familiar with the treatment plan applicable to this patient.
2. Integrate with your current system.
When addressing managed care strategies to prevent managed care from developing into unruliness or chaos, the doctor will have to implement a total system that integrates managed care into the practice. Charge your staff with developing a system or master plan that will address the following:
- How do we schedule managed care patients?
- How should we document and chart their visits?
- Who should discuss plan coverage and fees with the patient?
- Who is responsible for collecting co-payments, payments and patient signatures on forms required?
- Who should process claims submissions and serve as the liaison with the various managed care plans?
- Who follows up when communications and procedures break down?
- In summary, a system or master plan will have to be in place addressing these concerns if participation in managed care is to function smoothly.
3. Track profitability regularly.
Remain consciously aware of the weekly/ monthly/ quarterly/yearly status of the practice’s profitability for the key to timely decisions regarding staff size, overhead, external marketing, office expansion and accepting additional managed care plans, etc. If necessary, utilize a professional consultant to assist you with analyzing and directing your financial and business needs and to helping guide your progress with managed care participation.
The current concept of managed care is like driving a Porsche at 140 miles per hour on ice and slamming on the brakes; where will it finally be when it comes to a halt? At this point, no one knows! Because of this, the chiropractor must be willing to continually reevaluate his or her position at least quarterly or even monthly with respect to managed care participation. Currently, to be successful you will be forced to participate in managed care; however, experience and knowledge will be your best guides to survival and success.
John W. Gay II, LLD, RFC, CIS, President of the Denver-based consulting firm of John Gay & Associates, has assisted more than 2,600 medical professionals with the management of their practices for over 16 years. Dr. Gay is a Registered Financial Consultant and a Certified Investment Specialist, speaks to professional groups throughout the U.S. and Canada, and has written articles for many professional journals. Please contact him at John Gay & Associates, 303-690-2727.