The  managed care reimbursement world can sometimes seem complex and difficult to understand. However, this system has key terms and players that every potential patient should be conversant with. 

Simply put, a managed care plan is a type of health insurance. This program is based on contracts between healthcare practitioners and medical facilities to reduce costs while providing care to its members. 

When these providers agree, they form a network, and the rules differ from one network to another. The costs will also vary; therefore, it is vital to understand a plan’s coverage and flexibility before making a choice.

That’s why we’ve put together this guide to help you understand managed care contracting, assessing the situation, developing a strategy, and conducting contract negotiations. 

What is a Managed Care Contract?

A managed care contract is a formal agreement between a Managed Care Organization (MCO) and a healthcare practitioner. This agreement determines the quality and extent of healthcare services and financing available to network members. 

There are three main types of managed care plans:

  1. Health Maintenance Organizations (HMOs) – With a fixed periodic payment plan, you can access various healthcare services facilitated by your primary healthcare practitioner. This plan is considered the more affordable option.
  2. Preferred Provider Organizations (PPOs) – A plan where a group of hospitals, doctors,, and other healthcare providers contracts with an employer, insurance agency, or other groups to provide medical services to their network members. This plan costs more but covers a larger scope.
  3. Point-Of-Service (POS) plans – This plan integrates HMO and PPO characteristics where members can choose their preference when accessing healthcare services. 

Assessing the Situation

Before getting into a legally binding agreement with an organization, it is crucial to have candid discussions to understand the extent of the risk they are willing to cover, both now and in the future. In addition, these conversations will help you assess the organization’s ability to meet the contract terms. 

Although contracts vary, there are three common features to consider:

  • A well-organized care process that covers referrals, disease management, outreach, and planning programs.
  • Access to efficient IT systems that evaluate services and provide virtual assistance and information on alternative contracts.
  • Provision of healthcare services at the patient’s convenience. It is critical to establish the wait time involved.   

When it comes to assessment, the main requirement you should be looking for in any organization is its ability to deliver value-based services.

Developing a Strategy

It is crucial to have a strategy in place when seeking the right managed care contract. Below is a list of the top things to keep in mind when developing an effective strategy:

  • Seek out other benefits besides good prices – the quality of service and response time are equally as important.
  • Establish your preferred contract duration – costs will vary with the time aspect of contracts; shorter plans tend to be more pricey than longer ones.
  • Determine your expectations in advance – this gives you a clear picture of what you want when discussing with different organizations.
  • Work with Accountable Care Organizations (ACOs) – these organizations tend to mitigate the total charges on patients while upholding high-performance levels.
  • Consider the current rates an organization offers and the rate increases expectations. The future implications will determine the current viability of a contract.

Conducting Contract Negotiations

When it comes to negotiations, everything rises and falls on communication. Therefore, it will be vital for the following aspects to be clearly defined:

  • Determine who the key stakeholders are to develop the right negotiating team.
  • Set out a clearly defined process for escalation and approval of the negotiations. Establish who the final decision lies with and communicate it.
  • Develop an effective communication plan based on the potential risks that may arise from the negotiations.

Although every negotiation will differ, the list above serves as a guide when developing a negotiation strategy for your organization.

Trust the Experts at PayrAdvisors

We have a team of highly experienced, skilled, and well-connected negotiators to meet all your managed care negotiation needs. As a result, we will eliminate the frustration and stress associated with the negotiating process.  Our team connects with the right leaders at the Health Plans to ensure your practice is negotiating to the best of its ability, to yield the highest possible reimbursement.  

Owing to our vast network and connections to health plans, you can trust us to negotiate the most suitable managed care contract just for you! 

Contact us today to learn more about how we may be able to help you and your practice!