As executive teams of specialty provider organizations look ahead to 2019, it appears that the shift to performance-based reimbursement will continue. The most recent change has been the new CMS rules that will move accountable care organizations (ACO) to full-risk reimbursement contracts (see CMS ‘Pathways To Success’ Medicare ACO Overhaul Limits ACO Time Without Risk). This is going to generate new and different relationships between health plans and provider organizations, as I discussed in Health System/Insurer Combos Gain Steam-& More To Come With ACO Changes. As a result, the OPEN MINDS senior team views value-based reimbursement (VBR) strategy as a key sustainability issue for provider organizations in 2019—The 2019 Health & Human Service Landscape: 2018 Legacy Sets Stage For Opportunities & Challenges and The Three Trends That Are ‘Top Of Mind’ In 2019 For The OPEN MINDS Team.
If that is the case, the strategic question for executive teams is: How do you seize the opportunities and avoid market challenges in this landscape? That question will be the focus of the upcoming 2019 OPEN MINDS Health Plan Partnership Summit on February 13, 2019 at the Sheraton Sand Key Resort, in Clearwater Beach. The summit is led by my colleague and OPEN MINDS Senior Associate Deb Adler. Ms. Adler’s overarching advice for provider organization executive teams struggling with this question is focused on enhancing their skills with building relationships (and new programming) for health plans.
What is involved in that relationship building? Ms. Adler outlined four key items:
- Develop a brief (one or two slide) value story that describes how your organization’s programs are differentiated in terms of quality and costs, and how you contribute to health care cost savings for the payer
- Know the payer’s pain points and needs, as well as important performance metrics
- Know thyself and plan a formal negotiation strategy that identifies your “walk-away” position on pricing and service model elements
- Develop the relationship, at the highest level possible, and sustain that relationship intentionally
Develop a brief value story—When contact is made, and executives of a provider organization have gotten “in the door” for their initial meeting, the conversation needs to get to the point promptly. What value is your organization bringing to the table, and what are the strengths that differentiate you from the competition. Ms. Adler noted:
Provider organizations should have a short, one or two-slide value story presentation that illustrates what they bring to the health plan that is a cost and quality differentiator. Ideally it would include measurable results for the measures that the plan cares about—measures like ambulatory follow-up, readmission rates, health care cost savings, reduced emergency room visits, etc.
Know the payer’s pain points—It’s a mistake to walk in and attempt to describe the problem when the payer knows exactly what their problems already are. The key is for the provider organization’s executive team is to understand the problem from the health plans perspective and how they will measure success. Ms. Adler explained:
There is a high probability that the payer’s pain points largely center around three key areas: access to psychiatry services, addiction costs, and autism service access and costs. While I wouldn’t assume that any individual health plan has all three or even any of these pain points, the best approach is to ask. Get to know the health plan’s specific problems and devise a proposal that makes the health plan management team successful in terms of the quality or cost issues they have identified. Presenting a proposal that ultimately solves the health plan’s current challenge is the key—with a focus on the service, the cost, and measures of performance.
Know thyself and plan—When developing a relationship, and hopefully a contract, a provider organization’s executive team need to know when to compromise and when to hold firm. Walking that fine line is the focus of your negotiations, and requires an understanding of the market, the competition, and your organization’s capabilities and cost structure. Ms. Adler explained.
Provider organizations need to have a formal negotiation strategy-knowing what they want and how to negotiate towards that end. You need to understand your internal unit costs and key performance indicators (KPI) and your ability to manage risks and alternative reimbursement models. You should spend time preparing (and role playing if possible) all key contract terms (both language and reimbursement), thinking through various payer reactions and how you will respond. You need a clear idea of what things you will bend on, as well as those that would result in walking away.
Develop the relationship—Finally, Ms. Adler stressed the importance of pull-through on the new relationship. After the contract is in place, the executive team must be involved in maintaining and continuing to build the relationship to ensure that the partnership remains mutually beneficial. She noted:
Like any relationship, you need to find ways to develop and sustain it. I always recommend reaching as high into the payer organization as possible to develop those relationships—and the more relationships, the better. Then implement formal touchpoints (e.g., monthly or quarter scorecard reviews) or informal touchpoints (watch for conferences where the health plan leader is attending, and you can interact), where you can share industry updates that you think will be valuable to the health plan.
In summary, Ms. Adler explained that connecting with health plans on these (and other) topics comes down to persistence more times than not. Provider organizations need to find the right contact in network management, or whoever is leading their local plan and continue to reach out.
For more, be sure to mark your calendar for The 2019 OPEN MINDS Health Plan Partnership Summit on February 13, featuring Ms. Adler along with Kelly J. Champ, Vice President, Network Strategy & Innovation, Optum; Matt Miller, Senior Vice President, Public Sector, Magellan Healthcare; Charles Gross, Ph.D., Vice President, Behavioral Health, Anthem, Inc.; and Beth Rath, PMP, Vice President Network Operations, New Directions.