Managed care pitfalls: Look before you leap
Keep tabs on outcomes, financial issues
In her work as a managed care consultant, Nancy Beckley, MS, MBA, has witnessed problems providers have faced by not making the correct decisions with contracts. In fact, she has seen one private practice physical therapy clinic declare bankruptcy because of poor pricing decisions when they entered into managed care agreements.
If you can’t judge whether the contract will be a plus for your facility, don’t enter into it until you have a handle on your costs and know how to keep them under control, advises Beckley, president of the Bloomingdale Consulting Group in Valrico, FL, a managed care consulting firm.
Providers should have a clear understanding of their costs in order to judge whether they can survive under the constraints of a managed care contract, Beckley says.
Tips for coping
Here are some other tips on how you can cope with today’s healthcare climate:
• When you contract with a managed care organization, make sure you aren’t so tightly bound that you can’t provide adequate patient care.
If the contract doesn’t provide for what you think is reasonable patient care, don’t agree to it.
• Know the clinical issues related to the managed care plan and make sure your therapy staff is aware of them, Beckley advises.
What evaluation forms are required, details on documentation requirements, outcomes management mandates, and any requirements for specific protocols are among the details the therapists need to know.
If they don’t understand the parts of the contract that affect their practice, they’ll become resentful when they’re told their notes aren’t good enough for reimbursement, she adds.
• Keep your staff aware of changes in the marketplace and give them details on how managed care works.
In the past, therapists have been told to produce a lot of units because it brings in more revenue. Under managed care, therapy departments no longer are revenue centers; they are cost centers, Beckley says.
When Beckley talks to therapists about managed care, she finds that 90% of her audience doesn’t understand the concept.
"To them, it’s something that is restricting their ability to practice as they did in the past," she says.
• Analyze outcomes data to identify the most cost-effective and efficient interventions that will secure reasonably good outcomes.
• Develop a reimbursement verification system that identifies the exact benefits each patient has before any services are delivered, says Colodio Owens, BS, MHA, principle of Interface Health Care Systems, an El Sobrante, CA, managed care consulting firm.
Use the information to set priorities and goals before you begin treating the patient, she adds.
• Discuss financial issues with patients before admission.
Make sure they are aware of exactly what is covered by their insurance company and what would become their responsibility, advises Martin Schaeffer, MD, medical director for the department of physical medicine and rehabilitation at DuBois (PA) Regional Medical Center.
• Be a patient advocate with third-party payers.
Be willing to go to bat for a patient if you know a ruling is unfair and hurtful to the patient, says Kristi Kirschner, MD, chairperson of the Ethics Task Force at the Rehabilitation Institute of Chicago.
Most providers report moderate to good success in appealing payers’ rulings.
"We are aggressive advocates for our patients. If a patient’s length of stay is limited to the degree that it threatens their health and safety, we are aggressive in battling it out with managed care, and more often than not, we are successful," says Jan Bergen, vice president of administration for Bryn Mawr Rehab in Malvern, PA.
Bergen attributes her hospital’s success to building a strong relationship with managed care payers, largely through the efforts of the hospital’s case manager to educate payers about rehab, and the rehab staff about managed care.
• Don’t argue for an extended stay or more treatment for every single patient you lose your credibility with managed care organizations.
• Speed up your evaluations and treatment planning process.
"In a competitive market, if you don’t have your evaluation and care plan on the chart the same day the patient comes in, you fall behind," Burgess says.
• Institute a strong case management system with staff who have accurate up-to-date information about each patient.
Burgess cautions that you need a case manager who is an expert, not someone who performs the job only 20% of his or her time.
• Track pending legislation that will remediate some of the problems with the current health care marketplace, and urge your elected representatives to support them, says John Banja, PhD, associate professor, Center for Rehabilitation Medicine at Atlanta’s Emory University Health System.
For instance, 17 states have passed legislation making it illegal for managed care organizations to impose gag rules on providers, Banja points out. Be on the lookout for this type of legislation in your state, he adds.
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