Unless you've become a cash-only practice, dealing with payers is inevitable. But it doesn't have to be as painful as you think. We asked some experts from the payer side to offer their insights on how you can do better at the negotiating table.
Payers: love 'em, hate 'em, can't live without 'em. But you can live better with them, and we'll show you how. We wanted to find out payers' and employers' pet peeves and preferences so you could use that information to your advantage at the negotiating table and throughout the life of your network contracts.
For insights and tips we turned to three healthcare leaders - who didn't always agree on what's important to payers or whether the latest trends will last - but whose comments will, we hope, make your dealings easier with those groups that, like it or not, have strict control over the purse strings. First, some do's and dont's on contracting. Then, our experts offer their insights in their own words.
Contracting Do's and Don'ts: What the Experts Said
Payers "hate it when providers argue over clauses that are required by statutes or by regulations. They are not crazy about battles over indemnification clauses," she adds. These clauses, which prohibit physicians from attempting to collect payment from plan members in the event of a plan bankruptcy, are required by virtually every state insurance department.
Similarly, plans typically insist on - and providers dislike - hold-harmless clauses that prohibit physicians from blaming the health plan if the doctor is sued for malpractice. Trying to remove these clauses will tick off the contract negotiators, Gosfield says, because "they don't like any situation where they have to bring lawyers in."
"There is a mythology that [payers] don't cut separate deals - they will," she says. "But you might have to sign a confidentiality agreement that you won't talk about the deal."
It is an appropriate thing to participate in networks because the network is really an advertising arm," Dragalin says. "In return, the physician has to pay for that [advertising] and the payment is the discount" off her usual reimbursement amounts.
Q&A: The Physician-Payer Picture
Physicians Practice: What are the most important qualities health plans and employers value in a medical practice - size, quality, location? Has this changed over time?
Dragalin: Size, quality, location all matter, and no, it hasn't changed. From a payer perspective, we would rather deal with smaller groups than larger groups. They are just easier to deal with. The larger groups are more complex; they are a lot less flexible. By large, I mean several thousand; by small, I mean less than 50.
Darling: Employers would rather be paying for care that is based on best practices, on recommended care, on evidence-based care. This [desire] has accelerated within the last few years because the costs have soared again. When health plans tried to do any management, politicians, journalists, and sometimes employers said, 'We don't want you to put any limitations on physicians; don't make them mad or hassle them in any way.' The health plans felt burned.
Physicians Practice: Are you saying employers made mistakes?
Darling: Yes. Employers made a mistake in not engaging physicians earlier, and by putting in changes that made doctors mad. If something is going to work, it is going to have to be designed and accepted by practicing physicians. We actually see quite a difference [now] in the number of physician organizations becoming much more engaged in how to deal with these problems.
Physicians Practice: Physicians are skeptical of pay for performance, if not outright opposed to it. Is this concept here to stay?
Darling: Yes. The programs we have so far I think are really good, because they encourage physicians to meet certain standards ... and if they do, they get paid more. We should be paying doctors more. In terms of fees, at least, they are not the problem in the system. Primary-care providers are underpaid, in my opinion. We want to reward physicians who do everything evidence-based to help those patients. It sends all the right signals.
Dragalin: Physicians have a right to be skeptical. There are many, many different groups that say they can demonstrate quality. A lot of the variables have not been tested, from a longevity standpoint. I think most pay-for-performance systems out there today are based more on rates and less on quality. Pay for performance is nothing more than tiny snapshots in the care spectrum to see if a certain medical action was done.
Gosfield: Pay for performance is a rapidly developing phenomenon that I believe is transitional. I don't think it's going to last. It is not a sustainable model. Once you move everyone up [to meet quality standards], then where do you go?
Physicians Practice: What role should the federal government play in this?
Dragalin: I don't think the private sector is going to get it together - ever - to put together a pay-for-performance system that stands the test of time. Employers endorse specific programs and measures that are being pushed by whatever business coalition they belong to, and those are influenced by whichever consulting group is advising them. The private sector does not have the volume. I think the variables will come from CMS [the Centers for Medicare and Medicaid Services]. The government needs to step in and mandate a specific set of quality indicators that physicians need to be following for Medicare participation, and decide what we are going to do in terms of technology assessments, what drugs are covered. I don't understand how there is any other answer. Physicians will not be able to comply with 10 different health plans' pay-for-performance standards.
Darling: The federal government has to lead because it pays for such a high and growing amount of healthcare. Providers will, understandably, hold back from making investments to avoid the risk of doing something that would be a waste. We believe the federal government should convene all stakeholders, set tight deadlines for the stakeholders to work out the standards, uniform measures, interoperability requirements, and the rules needed for everyone to be efficient and effective.
Physicians Practice: Should physicians be making more investments in information technology (IT)? Who should pay for these?
Dragalin: Technology makes it easier, but technology is nothing more than the ability to manipulate certain pieces of the medical record, to have all your diabetics listed in a certain file [for example], so you can know when they have come in and when they haven't. Who should pay for it? Who pays for the nurse? It's buried in the physician's overhead. The same people who pay for all the rest of healthcare.
Darling: They should put in what is most useful to them first, scheduling or bookkeeping, billing, e-mail ... maybe the PBM [pharmacy benefit manager] gives them something with e-prescribing built in. We would love to see that, and we are happy to support the programs that would support physicians' offices [to] become more computerized.
We are encouraging our members to pay for pilots that would test the efficiencies and effectiveness of e-mail for physicians, and encouraged their foundations to make grants not just for hardware, but also for training and for time off. We think there are enough savings for everybody to make the investment. It is possible to lend money and have some shared savings. A payer would save money if transactions were done electronically.
Physicians Practice: Should there be consequences for physicians who don't change, or evolve, or adopt technologies? Should they be cut from networks?
Dragalin: There are physicians who are following much more objective, standardized protocols than other physicians. Does that mean everyone who is not following protocols should be cut? Probably not, since most physicians aren't.
Darling: I don't think so ... There should be positive incentives. If they are good doctors but they are slow to adopt technology, I don't think they should be punished. They need incentives.
Physicians Practice: Are there other issues of concern about physicians?
Darling: One thing we would like to see much more of is the use of other health professionals. The idea is that a lot of things are done in a medical group practice that are good for patients, but they don't [all] need to be done by a physician, such as counseling if you are a diabetic. These could be done by a nutritionist, or a nurse. If we could find a way to do that without hurting the physicians' income ... Right now we have a payment system that works against that.
Theresa Defino is an editor for Physicians Practice with more than 15 years' experience covering economic, legislative, and clinical aspects of healthcare issues. She can be reached at firstname.lastname@example.org.
This article originally appeared in the July/August 2005 issue of Physicians Practice.