Here's how to crack the managed care market
Big and small providers alike are finding success
Home infusion providers are scrambling to attract managed care organizations (MCOs) looking for "one-stop shopping" when contracting with providers, says Tamera Grubb, RN, with Long's Home Infusion Therapy, an OmniCare Company located in Jacksonville, IL. While this one-stop-shop approach isn't new to the home care industry, it's time home infusion providers realized that if you want lucrative managed care contracts, you must offer a basketful of services that streamline work for MCOs.
Karen Lovell, director of business relations & development at Baylor Homecare, an affiliate of Baylor Health Care System in Dallas, senses this shift requiring home infusion providers to offer multiple services. With nine locations throughout the Dallas area, Baylor Homecare has created customized services covering more than one aspect of the home health industry.
Lovell says landing a managed care contract hinges on several areas. She finds MCOs consider the following factors when looking for a home infusion therapy provider:
· price;
· range of services offered;
· coverage area;
· expertise of nursing staff within specialty areas.
The specialized nature of Baylor Homecare's business has "gotten us in more doors than if we only offered one service," Lovell says, adding that the level of competition in the industry makes specialization necessary for survival.
Grubb also finds MCOs are requesting comprehensive services. However, Long's Home Infusion has landed contracts while providing only home infusion therapy. Long's seeks a competitive edge by "providing quality patient care and quick turnover time on meds, including an hour-and-a-half to four-hour window for having meds available to patients," says Grubb.
In addition, Long's Home Infusion remains a local team providing "hometown service" by having a local pharmacy team (their main supplier is located in Peoria) that provides support, first dosing, and backup as well as concentrating on the motto "Customer First," Grub says. Long's wide range of home infusion services, including antibiotics, pain management, fluids, and chemotherapy, keeps the company competitive with providers offering multiple home care services. Long's also offers education to nurses and doctors, and seamless coordination of care with hospitals, home health agencies, and Long's Home Medical Equipment, Grubb adds.
The company further enhances its services by having infusion specialists and a pharmacist available 24 hours a day. At the core of Long's "hometown service" philosophy is the fact that it has served the Jacksonville community since 1916, providing stability in a constantly changing market, notes Grubb.
Nailing managed care contracts
Much of Baylor Homecare's success with managed care contracts is due to its marketing. For example, the agency has three marketing representatives, each of whom is assigned a territory. The marketing reps solicit managed care contracts and other business referrals in their territories. They make cold calls to insurance companies, physician organizations and practices, and employer groups. "Anytime we hear about a new HMO or managed care product coming into our area, we try to schedule an appointment to find out who they plan to use to provide services," says Lovell.
Also, managed care staff act as liaisons and support to insurance case managers to build solid relationships with insurance companies, hospitals, and physicians. "This is a relationship business," Lovell says. She offers these tips on building a relationship-oriented business:
· Be a consistent presence in the customer's office.
· Make periodic customer visits.
· Offer inservices and CEU-accredited sessions.
· Offer tours of your facility.
· Answer questions and concerns in a responsive manner.
· Bring snacks or lunch.
"Customers love food, but this can get expensive," says Lovell. The above tips are all the more important because it's not just quality service that gets your foot in the door, she notes. Many MCOs assume that all infusion providers offer the same level of quality, which means that price and relationship building often become the differentiating factors for choosing a company, Lovell adds. "You'll likely have to provide that service at the lowest price for an MCO to respond to your initial courting calls. Then it's the relationship that keeps the business coming."
Long's Home Infusion Therapy is beginning to pursue managed care contracts by talking with case managers at insurance companies with whom they currently deal, and determining their preferences in a home infusion provider. The company plans to secure MCO contracts by approaching the marketing from an OmniCare perspective. "This will allow us to use our'size' to obtain the contracts. Our cold calls are visits to local doctors and case managers for the insurance companies," Grubb explains.
Company employs'managed care nurses'
Jumping into managed care doesn't come without a price tag. One cost Baylor Homecare experiences when maintaining contracts includes salaries for designating managed care nurses to work with case managers, says Lovell. The 4.5 managed care nurses Baylor Homecare employs handle specific managed care contracts. They serve as the "point person for the MCO case manager," she says. Although this is costly, Lovell notes that "an MCO case manager can call the assigned managed care nurse at our company and get the necessary information without going through a lot of phone calls and time-wasting efforts."
One difficulty Lovell faces is meeting the pricing demands of MCOs. Because Baylor Homecare is a mid-size provider, low prices offered by national organizations sometimes make it hard to compete. Although the cost of providing services keeps rising, MCOs demand contractual rates that do not offset rising costs. Lovell acknowledges Baylor Homecare adjusts by knowing the prices are going to be low and trying to keep its business as cost-effective as possible while maintaining quality patient care.
"We are able to offer prices competitive with national companies about 80% of the time," she says. "If a national company offers to capitate all lives of an insurance company on a national basis, we cannot do this." In addition, Lovell says Baylor recently started a cost-effectiveness analysis on a contract-by-contract basis. When a contract is not cost-effective, it becomes necessary to give it a pass, she says.
Grubb points out that hospitals have an advantage in securing MCO contracts because the doctor who discharges a patient influences the choice of home infusion provider. For example, Grubb recalls one patient who was required to stay in the hospital an additional day because the medicine from her MCO was being shipped from out of town. The MCO pays for the extra medical costs of another day in the hospital while waiting for the meds, when he or she could have been treated more quickly by another service provider right around the corner. The MCO pays more for the patient's care in this situation unless the case manager opts for an out-of-network provider to serve the patient.
"The overhead involved in the case of a hospital stay vs. at-home therapy is obvious," says Grubb. "At home, you only have the basics. A person can be taught how to operate the pump and do line maintenance. We often use family members for this as well, and provide the patient or caregiver with appropriate training as well as providing them with 24-hour on-call nurse for support and backup."
The bottom line is operating a profitable business, but balancing profitability and quality service can be a tightrope walk. Such is the case with managed care. "Managed care is better in that it offers a higher volume of business and worse in that the volume of business it offers is labor-intensive," says Lovell.
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