Local providers vs. national super-providers
Software company helping local agencies team
As regional and national providers of home infusion continue to grow through mergers, acquisitions, and strategic agreements, many local providers fear for their future. It’s tough to argue against the benefits of national buying power and one-stop shopping for referral sources. But a Columbus, OH, software vendor is out to level the playing field for its local, independent users.
"Everybody is putting the nail in the coffin of the small and medium-sized independents," says Jeff Johnston, RN, BSN, vice president of clinical services, of Definitive Homecare Solutions (DHS). "All things being equal, I think insurance companies would rather work with local agencies."
Johnston considers many of the successful local home infusion agencies to be just as stable, if not more so, than regional and national providers.
"The local agencies still around have downsized, survived, and become more efficient," he says. "They’ve survived this long, so they must be doing something right, and what they want is a level playing field."
And that’s just what DHS, through its CPR+ software, wants to provide. It is currently creating a nationwide provider network of users who will be tied together by the CPR+ software package.
A recent widely read study from the Northampton, MA-based consulting firm Fazzi Associates notes that only three of 25 horizontal home care networks it studied had gross revenues exceeding their total investment. However, DHS looks to overcome many of the obstacles associated with such networks, predominately a lack of standardization among members, through its software. Experts agree that standardization is critical if any managed care network provider is to survive. Yet, such standardization among hundreds of different agencies is not easy.
"A lot depends on how much they look like a seamless delivery network," says Alison Cherney of Cherney & Associates, a home care and home infusion consulting firm in Brentwood, TN. "They have so many different providers they try to get data from, it’s hard."
With all members using the same software, everything from outcomes data to bills and other forms will be in standardized format. Johnston and CPR+ users hope this gives member home infusion agencies the benefits of both national companies and local providers. Ideally, the network will provide members with group buying power and a national base of providers to help more readily obtain referrals from payer sources. Yet, it won’t be bogged down by the red tape of national companies.
"We’re going to be more responsive in a quicker time frame," says Mark Schneider, chief operating officer, Florida IV Services, in Miami. "I don’t ever want anyone to call my facility and have to wait for a call back for an approval for something."
Time of transition
Johnston says the goal for the provider network is simple.
"The bottom line is, we want to be able to leverage the strength of our customer base and take that to national, state, and regional managed care companies so they can contract with us instead of a traditional national chain," he says.
Early surveys of CPR+ users indicate the provider network is likely to consist of 150 to 200 members.
"The advantage of having 200 locations speckled around the country helps us quite a bit," says Stephen Lepley, DPH, president of Home Care Solutions, a home infusion company in Chattanooga, TN. "We’ll be more like a national company with a much broader base to offer an insurance company by all of us uniting together."
As it stands now, the network will not provide coast-to-coast coverage due to several "holes" in its user map. While CPR+ has a high concentration of users in Florida, Tennessee, and New Orleans, DHS would like to add users/members in North and South Dakota, some areas in the Western Plains, Washington, and Minnesota. Johnston notes that the company is actively trying to fill those holes. Currently in the planning stages, Johnston is establishing the requirements participating agencies will have to agree to.
Basing the provider network on CPR+ software will allow members to provide the consistent, reliable data managed care companies look for when awarding referrals. The software allows users to track everything from clinical documentation to inventory and accounts receivable.
"We can transfer information between us and the users very easily," says Johnston. "All the data will be uniform."
Combined with the outcomes program included in CPR+, the network will be able to measure the network’s quality of care and share that information with managed care companies.
"The CPR user group has the common denominator of the operating system," notes Schneider. "The idea behind the concept was that if we all have the same common database, we can create a network of users and contract with referral sources, [in addition to] procurement sources of products."
Even with centralized data, Johnston says that monitoring and ensuring quality of care is the network’s biggest challenge. That comes as no surprise to Michael Tortorici, Rph, MS, president, of AlternaCare of America, in Dayton, OH.
"One of the problems they may be encountering is consistency in quality, so they will have to develop some type of benchmarking process," he says.
However, with the software as a focal point, such benchmarking is possible. DHS will market to national managed care companies, and consistent standards will be maintained through the use of the CPR+ software.
"Most of the CPR+ users I know are individuals or small groups with two or three locations," says Lepley. "For an insurance agency that contracts with CPR+, because of the software they’re going to get consistent forms and consistent information, so every member will have the same information in the same format."
Strict guidelines could be a plus
But DHS will not serve as a national headquarters with final say over the operations of network members. "CPR will not be our boss or our manager, unlike a corporate office," says Schneider.
Still, Johnston says DHS is working on creating uniform policies and procedures that members will be obligated to follow, in addition to conducting centralized patient satisfaction surveys. But Schneider doesn’t see establishing such uniform standards for members as a negative.
"As a focal point for ABC’ insurance company, there must be guaranteed common grounds in various areas," he says. "CPR can go out and contract with payers and guarantee a minimum compliance in certain areas."
Such standards will also give members the ability to refer work among each other. For example, in the past, if a referral source contacted Schneider to provide service in Ohio, Florida IV Services was unable to comply. However, Schneider can now scan the list of member agencies and forward the referral to a network member.
Not everything is cut and dry when establishing a national network of home infusion providers. Attorneys anticipate making a pretty penny assisting the venture’s start-up.
First and foremost are anti-trust concerns. Unlike national chains, the CPR+ provider network will not be able to set standard rates for services.
"When Coram sets prices, they do so on a national scale and a national basis, but we can’t do that because we’re not a national company," says Johnston. "Coram’s affiliates are not affiliates, they are all one company. That’s the difference, and that’s what we have to be careful of."
According to Tortorici, a uniform price structure is possible if approached properly.
"If the network goes to Aetna and says I can do X’ for $150 and then goes to Metropolitan and gets $175, that’s really not price fixing," says Tortorici. "The network has to accept [what the payers agree upon] and then go to providers in the network and say, This is the pricing we agreed you could live with.’ "
In addition to worrying about the various federal laws and the laws and standards of each state, there’s also the matter of the network itself, which will be a separate legal entity and business from the software company. Although centralized through DHS’ home office, a separate staff specializing in such facets as marketing to managed care providers will be brought on board. But the network won’t ignore its internal strong points.
"We’ll definitely bring on folks with marketing experience, but we also feel that we can work collaboratively with our customers, many of whom have marketing personnel on staff and have contacts in their local areas."
Getting started
Because the software is critical to the success of the network, Johnston anticipates home infusion agencies having to be CPR+ customers to join. Even though the vendor has already extensively dealt with users, there still will be an application process. This will probably require a listing of the services provided by the agency, the geographic area it will cover, any subcontracting agreements it has, whether it is Medicare approved, Joint Commission accredited, and other important factors that could dictate the amount and/or type of work an agency could take. What’s up in the air is whether an application fee will be charged.
"You can make a strong case for not charging a fee because you’ll have more members," says Johnston. By charging a $500 to $1,000 fee, you often weed out agencies who aren’t serious about taking part in the network. On the other hand, Johnston is concerned that a fee may alienate some users.
"If we charge $1,000, some of the real small agencies may decide not to join," he says.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content