Home Health & Hospice Week

Show managed care partners you can save them money with quality care.

A Medicare managed care storm is rising (see story, this page). But if you follow these expert tips, you can emerge under sunny skies:

1) Examine your costs. To successfully contract with a MA plan, you must sharpen your pencils and know your own costs well, advises Martin Hadelman, president of Advisors for Health Care in Roswell, GA, who helps providers negotiate managed care deals. That requires cost accounting, he says.
 
You don't want to agree to a payment rate "and find out six months down the road you can't cover expenses," Hadelman warns. "Make sure whatever price you agree on is accurate and you can live with it."

2) Hone your marketing. To capture Medi-care MCO business, you have to craft a marketing message targeted at managed care needs, Hadelman counsels. One important component will be your quality indicators - patient outcomes. You'll have to prove to MCOs you provide better care than the competition to win a contract, Hadelman expects.
 
It's up to you to show MCOs what you can do for them, notes consultant Alison Cherney with Brent-wood, TN-based Cherney & Associates. Savvy home care providers will emphasize that they'll keep costs down for the MA plan through means such as preventing pricey emergency room visits and rehospitalizations. Outcome-based quality monitoring (OBQM) measures HHAs already collect are perfect for reinforcing that message, Cherney points out.
 
3) Tout your subcontractor capacity. HHAs can also save programs time and money by managing and subcontracting for other home care services such as home medical equipment and home infusion services, Cherney suggests. "A good home health agency is the mainstay" of an MCO's home care program, she says.
 
Of course pricing will play a significant role in plans' contracting decisions. But MCOs usually don't just go for the lowest bidder, Hadelman believes. They want to see value for their money and high quality care.

4) Target decision-makers. Once you have your selling points and managed care strategy in order, your job is to find the decision-makers at the MCO and convince them you deserve the contract, Cherney instructs. Those key contacts could include provider relations managers, medical directors and senior executives (see Eli's HCW, Vol. XIII, No. 4, p. 28 for more managed care target ideas).
 
Often these decision-makers don't really understand what home care providers do, so HHAs must spend time educating them, Cherney explains. Pointing out that you can save MCOs money on high-cost patients such as diabetes and stroke cases - "patients agencies get anyway" - is a winning technique, she says.

5) Negotiate the contract. How much wiggle room a contract has will vary greatly depending on your "power base" and the individual MA plan, Hadelman says. Once you've convinced an MCO you're the right agency for the job, you may be able to negotiate important sections of a contract, or you may not be able to negotiate anything at all, Cherney agrees.
 
If you can, Hadelman advises negotiating a guaranteed patient volume in return for a certain payment rate. HHAs generally will need a certain volume level to make up for the reduced rates they accept under managed care. Make sure you won't be one of a large number of providers on a panel - and therefore likely to receive only a handful of referrals - if you are accepting significantly lower rates for your services.
 
Specifying a term for the MCO contract, usually one year, is a good idea, Hadelman adds. And spelling out under what conditions the contract terminates is prudent. For example, you want to have an out if the MCO isn't paying your claims appropriately.
 
Agencies often can negotiate how much paperwork they will have to take on for the MCO, Cherney notes. Whittling that administrative burden as much as possible is an attainable goal.
 
On your end, you can expect the MCO to want to specify what services you will cover and your response times to provide the services, Hadelman advises.

6) Clarify payment terms. Managed care contracts are legal documents filled with often unfamiliar language, Hadelman cautions. "You'll be in extreme trouble and difficulty if you don't understand the contract language," he warns.
 
A well-known managed care tactic is to "stretch out payables" whenever possible, Hadelman says. And many providers enter into contracts without specifying key payment terms or understanding what they're really agreeing to.
 
Defining every payment term in the contract before signing is vital. "Treat it as a divorce before you get married," Hadelman quips.
 
If nothing else, be sure you nail down what the MCO's definition of a "clean claim" is, Cherney counsels. Spell out that if "I do A, B, C and D, you'll pay me," she urges.
 
Adding a provision that charges interest if the MCO fails to pay clean claims within 30 days is a good idea, Hadelman suggests.

7) Get a move on. Many managed care companies are launching Medicare Advantage plans now, Cherney notes. It's much easier to get on an MCO's panel from the start, she insists. "Later, they won't switch unless there's a problem." So getting your marketing effort into gear quickly could pay off big.