Creating a regional one-stop shop from scratch

Close-minded owners need not apply

What began as informal and occasional meetings between home health providers has since given way to a unique alliance of independent providers intent on acquiring managed care contracts. How difficult was it to bring together different businesses, personalities, and management styles into one group?

David Horowitz, RPh, president of Med-Alliance and executive director of C&C Homecare, the respiratory therapy/rehabilitation and medical equipment specialists for Med-Alliance, says the success relied on the group as a whole and not any one individual.

"It was important to be united with other providers so we could express to managed care groups that we can provide all the services they need, not just one component," he says. "That’s a mindset these people had to have."

With that in mind, several home health providers looked to form just such a group. Here are the steps they took:

1. Complete the puzzle.

To approach MCOs as a comprehensive alliance, Med-Alliance had to have a comprehensive array of services in its arsenal. So the first step in forming the group was deciding what services would be necessary. The interested parties realized that in addition to the services they could provide (rehabilitation, respiratory, and DME), several critical areas were missing. These included:

• nursing;

• orthotics;

• prosthetics;

• home infusion.

2. Take aim.

Now that the group realized where its potential holes were, it looked to fill them with top-notch home health providers.

"We were looking for those in the higher echelon of health care in our area," says Horowitz. Qualifications went beyond accreditation from the Joint Commission on Accreditation of Healthcare Organizations. Reputation also was important. To find out who the respected providers were, Med-Alliance went directly to the source.

Each member contacted MCOs it was already doing business with and asked what other home health providers they liked doing business with. Once this input was received, the group interviewed several of the providers face-to-face, where the third critical qualification was addressed.

"We obviously wanted people who could be committed to the concept," says Horowitz.

Following the interviews, the group decided what providers it wanted to offer a position to in the newly formed corporation of Med-Alliance.

3. Get it in writing.

Now that the members were in place, it was necessary to draft an internal contract. It stipulates that no member has to give up existing individual contracts and can retain full control over services, intake, and reimbursement. Such contracts could still benefit other members. If the home infusion provider needs nursing, the Med-Alliance member would first call the appropriate Med-Alliance affiliate. If a referral comes in to Med-Alliance after a contract is established and service is provided by a member company, the member would bill on behalf of Med-Alliance and not itself.

The contract also stipulates that contracts will be signed on behalf of Med-Alliance even if only one member will benefit.

"If a managed care group is looking for nursing only, we would still sign the contract because it will benefit one of our members," notes Horowitz. "As a result, one out of the seven current members would get all of the current business. So they would pay a fee [to Med-Alliance] for the intake and billing process because they are getting all the business."

Thomas M. D’Angelo, RPh, president of Americare Pharmaceutical Services Inc., the home infusion provider of the group based in Franklin Square, NY, says being open-minded is critical.

"Some people are going to say, ‘I only want to take care of a small portion of upper New York, and I don’t want to have to go all over the place,’" he says. But as a member of the group, you won’t have the choice of limiting your service area if it comes at the expense of Med-Alliance.

4. Streamline the processes.

With seven members spread throughout New York, it would literally be impossible to meet for every issue that comes up. So the Med-Alliance members avoided management by committee with a unique rotating liaison group.

When Med-Alliance was negotiating with CPR, for example, two members of Med-Alliance were assigned as liaisons to CPR: one as the spearhead and the other as a backup. After six months, the backup became the spearhead, the spearhead was removed, and a new member became the backup.

"This way, we don’t have to have a committee meeting every time we want to get something done," says Horowitz.

5. Set a cost.

There are two financial criteria that members must adhere to in the group. First, there is a flat amount paid by each member to offset the regular operating expenses of the group. The second is a fee based on the amount of work each individual member is getting from any particular contract.