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Getting payers to contract with your physician practice is a little like getting an actor nominated for an Academy Award. Although the optimists think good work will be recognized and rewarded, the realists don’t take anything for granted. So just as major movie studios mount advertising and publicity campaigns for their favorite actors and movies weeks before the nominees are selected, your practice should be proactive in seeking out contracts with payers.
For tips on how to do this, Physician’s Managed Care Report talked with Emory Healthcare, a health system that leapfrogged from one payer contract to 150 (see related story, p. 152), as well as consultant John Eudes, who has helped dozens of physician practices mount a payer marketing strategy.
Don’t worry if your practice doesn’t have a Hollywood-style marketing budget. A proactive payer strategy is less of a financial investment than an investment of your staff’s time and energy, says Eudes, a principal with the Atlanta-based Greystone Group. "You can think of being proactive as being somewhat of a sales function," he says. "Like all sales functions, it requires some prospecting and qualifying of potential clients."
Eudes advises practices to follow these steps in pursuing payer contracts:
1. Do your homework.
Use information available to the public to determine payer strategies. Who is in their provider network? How many members do they have? Who is their target market? How profitable are they? Your state insurance department, local business publications, and even Web searches should give you this information, Eudes says. Most health plans will mail out provider directories upon request, especially if it is a consumer request that can be mailed to your home address.
2. Review your own patient database.
How many patients, if any, does your practice have of your major target carriers? This may help your bargaining position in contract renewal negotiations. If you’re not currently contracting with a carrier you’d like to go after, do a geographic study of where your patients live, where your practice offices are, and where the carrier’s major employer clients are located. If you can show overlaps, again, you can approach negotiations from a position of strength.
For example, approximately three years ago, US Healthcare (now Aetna US Healthcare) entered the Atlanta market. The local business press reported that the carrier’s first strategy was to target small employers. If you were an Atlanta physician practice within a five-minute drive of approximately 30 small businesses, US Healthcare probably would have been very interested in talking with you.
But don’t assume a carrier’s will do in your market what it did somewhere else, Eudes stresses. Search the local newspapers, and talk to consultants, insurance department contacts, or other sources to find out their strategies for your particular market.
3. Rank potential payers and build an information file on them.
By looking at the database of information you’ve built, determine which managed care organizations are important to you. Once you’ve narrowed your list down, find out everything you can about how the organizations develop their provider panels. What are the names of their provider relations directors or other decision makers who drive this process? Use the provider directory to see how many other specialists in your field are included and where these practices are located. If you’re located on the south side of the city and the provider has few practices in your part of town, you may be in luck.
4. Find out about the practice review process for each of your target payers.
Most managed care organizations have an audit or some other sort of review process that they use to screen potential providers. Ask your target payers for an evaluation form or a list of the criteria they use to select practices and physicians in their network, Eudes says. You’ll be surprised at the number of payers who will give out this information.
5. Conduct a self-audit of your practice.
To determine how your practice would fare, hire a firm to do a mini-audit of your practice or use someone from your staff. Your audit might include the following areas:
List what your competitive differentiators are: cost, location, etc.
Are the physicians in your practice meeting the practice standards set out by the payer? Often, practices will employ standards similar to those used by MCOs (i.e., board certification), but they may not enforce them across the board for all physicians, Eudes points out.
How does your practice stack up in terms of access? If a patient called today for an appointment, when would the first available appointment time be? What is the average time patients spend in the waiting room?
How does your practice handle physician referrals? Do you have backups in place?
Does every physician in your practice give progress notes to the referring physician to let him or her know how the case turned out?