Is managed care in your future?
Is managed care in your future?
Prepare for obstacles if pursuing first contract
(Editor’s note: Last month, Home Infusion Therapy Management profiled two home infusion agencies with distinctly different approaches to managed care. This month, in the final part of our two-part feature, the agencies share tips on managed care and predictions of coming trends in home infusion.)
Although the Englewood Cliffs, NJ-based Infu-Tech has embraced managed care, it may not be right for your business, says Jack Rosen, the agency’s president and chief executive officer. In fact, depending on what you hope to accomplish as a business, you may not need to participate in managed care at all.
"If you want to be a local provider, I think there will always be a niche for smaller-niche players," he says. "But if you want to grow your company rapidly and expand beyond a small regionalized area, the only way I see of doing that is participating in managed care contracts."
If growth is in your future and you’re not already a player in the managed care game, Rosen says you’d better step up to the plate.
"It’s becoming a little late in the day for people to come in and learn how to participate," he says. If you’re new to the game, here are two obstacles Rosen says you’re likely to face:
• Getting your foot in the door.
Many managed care organizations already have established their network of providers, Rosen says. Breaking in can be difficult at best, if not impossible.
• Preparing for the risks.
With any managed care contract comes associated risks. Spiraling costs or declining patient outcomes can cost your agency dearly in a managed care contract.
"Managed care has put a lot of onus on us to track our costs closely, because our profit margins have decreased significantly," says Joyce Nelson, RN, Chief Operating Officer of Y Medical Associates in Dallas. "Yet, while tracking our costs, we still have to maintain quality. If you’re a small company and you go into a managed care contract without knowing your costs, it could be financial suicide."
But there are ways you can protect yourself, if you know your costs. For example, Rosen says that Infu-Tech builds safety nets into its agreements.
"If for some reason there is a change in utilization patterns or a change in the type of enrollees private vs. Medicare, for example or a significant change in the type of patients that we treat HIV for example the contract is adjusted," Rosen says. "There are some bands that we operate within, but when that changes and you operate outside those bands, the agreement permits us to go back and adjust the pricing, so we limit our risk."
He adds that incorporating such safety nets should be commonplace when negotiating.
Managed care has established itself enough to grow out of the emerging trend category. So what’s next? Here are three emerging trends.
• Subacute care.
"As Medicare enrollees and the elderly population begin to sign up with managed care, we’ll see a need for more subacute care as the elderly who are hospitalized will not be able to go back into the home as readily as the younger population," Rosen says. "I think subacute care will be the answer for many of these people."
• Disease state management.
"Disease state management programs are an area we’re investing in right now," he says. "It’s a way in which managed care entities will be able to improve outcomes. When you’re done negotiating the best price for your nurses and services, the only other way you can reduce costs is to improve patient outcomes. Any programs related to the improvement of patient outcomes will be something that is necessary."
• Physician control.
Nelson adds that she wouldn’t be surprised to see physician referrals make a comeback. In many cases, the patients’ medical coverage limits to whom physicians may refer a patient. Nelson says that could change.
"I have read articles that the amount of product indemnity cases that are point of service, where the patient and the physician have absolute choice of providers, is decreasing," she says. "But I’ve read articles that say the pendulum is going to start swinging the other way in that there is going to be more control as far as the patient and the physician choosing the local companies that they want to use."
For example, a bill recently passed in the Texas legislature that Nelson says will allow rural providers and patients to have a choice of pharmacy.
"If there is a Revco in town that has a national contract with Prudential for pharmacy services, and then there is Joe’s Pharmacy that has been servicing that community for 80 years, this [bill] will allow patients to choose to go to Joe’s Pharmacy as long as Joe’s Pharmacy is willing to meet the rate and meets all the pharmacy requirements with the payer," she says.
Nelson notes that Y Medical is hoping this will translate over to the infusion market, particularly for patients in rural areas who otherwise would be required to travel great distances to receive coverage from a contracted care provider.
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