In our view, any payer contracting strategy that relies on the reduction of managed care in the future is fundamentally flawed. Accordingly, while the future of some managed care entities is questionable, the future of managed care itself is not; the alternative to managed care - unmanaged care - simply has no future. Therefore, every medical practice, whether independent or hospital-sponsored, needs to carefully review its contracting strategy to determine the extent to which it is achieving optimal results.
In providing such support, Wipfli utilizes a multi-step approach:
- Build a "context" to include current contract inventory; reimbursement levels, methods, and volumes; competitiveness of contracts relative to the market; and financial performance of each contract (margin per unit).
- To the extent required, educate stakeholders about managed care contracting trends, key elements, landscapes, and alternative strategies.
- Create indicators to measure success including financial performance targets, improved market position, and measurable incentives such as improved patient satisfaction, level of risk to be managed, and the amount of data collection required and by whom.
- Review/determine key issues such as terms and conditions of each contract; competitor comparisons (i.e., scope of services); administrative, financial, and clinical issues, reimbursement level and method; and incentives/withholds.
- Evaluate internal capabilities to include current organizational structure, leadership and management, information systems, provider education, and capital/financial resources.
- Finalize contracting strategy by understanding/affirming its goals/objectives to be achieved, timeline, "yes/no" thresholds, roles and responsibilities, and leadership and management requirements.
Wipfli is available to assist with negotiations of contracts and any implementation support required, including reaffirming infrastructure requirements and developing appropriate monitoring processes and reporting.