Following are other key factors that you must have knowledge of before you make a decision to join a particular managed care organization. Don’t be rushed into participating in an MCO without understanding the effect these factors will have on your practice:
What kind of an MCO is it?
· HMO
· PPO
· IPA
· PHO
Who owns the MCO?
· A private or publicly traded national holding company or HMO chain?
· A commercial insurance company?
· BCBS?
· A chiropractic group?
· Independent?
· A cooperative?
Licensure and qualifications?
· Does the MCO comply with qualification requirements?
· Is the MCO licensed by the appropriate agency in your state, i.e. health or insurance department?
Size
· How many contracts does the MCO have?
· What has been the MCO’s annual growth rate?
· What are it’s five year growth projections?
· What is the ratio of enrollees to chiropractors?
Benefits
· What chiropractic benefits does the plan offer?
· Does the chiropractic benefit require additional premium?
· Are there limitations on chiropractic services?
Marketing and service area
· Does the plan provide all enrollees with comprehensive information about chiropractic benefits?
· What are the procedures for selecting a chiro
The advent of managed care has changed nearly all of the parameters around the way health care is delivered in the United States. In some cases, it has forced people into choosing a primary care physician who essentially acts as a “gatekeeper” for all of their health care needs-requiring that they have a referral from their primary care physician for visits to specialists if they expect reimbursement. It dictates which hospital they go to and which pharmacy they use, and in general, managed care is forcing people to be more responsible for their own physical and mental well-being.
Its impact on chiropractic continues to be both positive and negative. For chiropractors who are educated about managed care and prepared for its impact, managed care has led to far busier practices. The downside has been tighter profit margins and an increased requirement for clinical documentation.
Chiropractors who have accepted this and adjusted their business practices accordingly are thriving. Those who are resisting in the hope that patients will remain loyal and pay for chiropractic treatment “out-of-pocket” may not be faring as well. They need to accept that managed care is NOT going away, and that in fact, consolidation within the health care system, in an effort to take advantage of the economies of scale, will continue.
Gaining Entry into Managed Care
Chiropractors can gain entry into managed care organizations in several ways: by approaching the managed care organization (MCO) and if necessary, educating administrators and member physicians about chiropractic; by influencing employers in the area to request chiropractic coverage; through a ground-swell of patient/consumer requests and by educating and working with other providers in the MCO’s area.
Before the chiropractor gains entry, however, they need to do their homework on everything from the MCO’s solvency and application and credentialing processes to understanding the financial repercussions that the contract terms of the MCO will have on their practice. The chiropractor should have a “due diligence” exam performed on the MCO and should read the MCO contract carefully.
The MCO Contract
Good information is absolutely essential to the decision-making process. All reports used in the process should provide pertinent information, and be timely and accurate. In addition, the MCO contract should not be too restrictive, and the associated fees for enrollment and annual renewal should be reasonable for the services provided.
Remember that MCO contracts are not carved in stone and that it is unproductive to have a “take it or leave it” mind set. Be aware that you can negotiate with a managed care organization. Be clear as to how many managed care patients you will need to meet your goals during each of the next five years.
Don’t be too timid or desperate to ask questions. You need to know if the managed care plan utilizes primary care physicians. How many are already included in their panel? What is the current and projected mix of MCO members? Who are the participating hospitals, specialists and ancillary providers? What kind of utilization management and quality management systems procedures and supports do they provide? Does the MCO provide practice management support? Are there billing and administrative requirements? What reporting systems are required with primary care physicians? What is the solvency of the managed care organization? How viable is it and what is its general reputation and commitment to quality?
Methods of Compensation
A major consideration is compensationthere are many basic issues that need to be addressed prior to signing a contract. For example, what will the method of payment be? Will it be a discounted fee-for-service and if so, what is the fee schedule? What kind of risk is involved regarding fee for service with a withhold? Or capitation? Is there a balanced billing? Is there a limitation on balanced billing and is there a “hold harmless” provision? (“Hold harmless” is undesirable because it leaves the chiropractor fully liable.) What are the conditions for denial of payment?
Other matters that should be considered are how the MCO will orient the chiropractor and his/her staff to administrative procedures, and whether it will provide an operations manual. Will there be access to timely and accurate eligibility information so that the chiropractor and staff can easily determine if a patient is currently eligible for MCO benefits? Does the MCO have mandatory audits? What are the basic terms and conditions of the contract? Be clear as to the list of covered services.
Also, what are the standards of care? How are referrals made? What are the medical records requirements? What are the requirements of the practice site? Are signs required in the chiropractor’s office? What compliances are required with the MCO rules and regulations? Is there an exclusivity requirement? What is the requirement of release of medical records and confidentiality? What are the requirements of professional liability insurance and general liability insurance?
A word about “Capitated Care”
One of the most important terms to become familiar with when you are dealing with MCOs is “capitation.” Capitation is a method of payment under which providers are reimbursed at a fixed amount per MCO member per month. It represents a significant shift in the basic economics of chiropractic practice.
The focus changes from how much the chiropractor will be paid, as in fee-for-service, to how much will it cost the chiropractor to provide the services specified in the capitation agreement. Participation in a capitated MCO plan requires in-depth analysis. Learn how to evaluate the capitation rate and if possible, equate it to fee-for-service revenue.
Be absolutely clear about what specific services are included in the capitation rate, the anticipated frequency in terms of units and service per member per month, and the estimated unit cost for each of these services. Entering into a capitation plan requires careful thought and analysis.
Preparation-the Key to your Success
This article is meant to give chiropractors a general overview of the impact of managed care on their practice. Participation in an MCO takes careful thought and analysis, and requires legal and financial advice. The question to join or not to join should be decided only after the analysis has been done and you have consulted with your practice consultant, accountant and/or attorney. You can be successful, but as with any important decision, be prepared-doyour homework!s
Richard E. Vincent, DC, FICC, is chairman of Vincent Management, Inc. of Burlington, Massachusetts, a management consulting organization that addresses the concerns and goals of each of its clients on a highly individualized basis. With a commitment to chiropractic spanning 40 years, Dr. Vincent is past president of the Society of Chiropractic Management Consultants, past chairman of the Massachusetts Board of Chiropractic Examiners, Federation of Chiropractic Licensing Boards and National Board of Chiropractic Examiners. For more information on Vincent Management, call 1-800-545-5241.
