What does your practice have to offer MCOs?

Use these tips to find out

Increased market competition means practices can’t sit back and wait for managed care organizations to come to them with contract offers.

As you seek to improve your attractiveness to MCOs, it is helpful to look at how MCOs evaluate physician practices, and come up with proactive measures you can take to market your practice to managed care organizations. (For more information on marketing tips, see Physician’s Managed Care Report, November 1997, pp. 151-152.)

Start by conducting a practice assessment. This helps you determine your desire and readiness for managed care patients. The assessment helps you concentrate on making those areas that you know the managed care organization will evaluate look good, so you can then demonstrate to an MCO that your practice provides high quality, low-cost patient care and achieves high patient satisfaction ratings.

During the practice assessment, you should gather the following data:

• A summary and review of your patient geographics and demographics. This reveals where your patients live and work, their occupations and employers, and what income levels and age ranges they fall in.

• An evaluation of what type of patients a medical practice is seeking, and what geographic areas work well with the existing hospital, specialist, and ancillary service provider affiliations of the practice or of the MCO. This helps you prove you can provide good access to an MCO’s patient base.

• A determination of the compatibility of a managed care contract with your existing physician referral sources. In other words, do your key referral sources participate in the contract you are considering participating in?

• A review of the marketplace for managed care organizations and competitive medical practices.

• Career plans and goal assessments in relations to the stage of a physician’s career, and the maturity of the managed care marketplace.

• Assessment of tangible and intangible assets of the practice. This includes your facilities, staff, administrative systems, medical and computer equipment.

• Self-assessment of the physician’s own ability to deal with a managed care environment.

Points to consider include whether a physician is trained to provide a broad range of services, if he or she has access to guidelines and protocols, and if he or she has the temperament to follow guidelines and jump through the various managed care hoops.

The next step is to understand how managed care organizations evaluate medical practices. The National Committee on Quality Assurance (NCQA) is to managed care organizations what the Joint Commission on Accreditation of Healthcare Organizations is to hospitals — in other words, they accredit organizations that pass muster, particularly in the area of quality.

Because achieving accreditation is a very important marketing tool for a managed care organization, an MCO often focuses on quality indicators of its participating and potential provider network members. These quality areas may include:

• The physician’s credentials and background. This includes educational history, licensure status, admitting privilege status at area hospitals, and board certification status.

• Interviews of physicians practicing in the office by the MCO’s medical director (these often are conducted at the practice).

• A chart review in the physician’s office to document the appropriateness of care and quality of how medical care is documented in charts.

• A site visit, which investigates how the practice stacks up in a number of ways that MCOs consider important to quality of care and patient satisfaction. This includes:

— cleanliness;

— accessibility;

— performance of office-based lab procedures;

— scheduling (specifically, how many patients per day does a practice typically see);

— how long it typically takes a patient to get an appointment at the practice;

— provision of preventive care.

• Provider profiling, which compares your providers’ performance to benchmarks of the MCO’s provider panel. Expect to be judged in some or all of these areas:

— Utilization: Each physician’s total cost of care, average hospital length of stay and readmission or complication rates for inpatient services provided for his/her patient base.

— Patient encounters: average cost per patient encounter and per diagnosis, plus average number of visits per member per year.

— Ancillary services: average utilization of ancillary services together with the average cost per patient encounter.

— Overall practice patterns.

By knowing this information, you’ll be prepared the next time a managed care organization approaches you about joining their network. You wouldn’t expect to show up for a medical school entrance exam without studying. Similarly, you’ll be pleasantly surprised at how much doing your homework before the MCO "test" can pay off.

[Editor’s note: Some of the information in this article was originally published in Managing Managed Care in the Medical Practice (Chicago: American Medical Association; 1996). The information is used with permission.]