Facing Closed Managed Care Panels? Consider a different strategy

These days, I get lots of calls, emails and shoulder taps at cocktail parties and events from frustrated healthcare providers and suppliers about closed panel hurdles. Healthcare providers and suppliers, both new and established, ranging from physicians, hospitals, ASCs, dialysis, orthotics, DME/HME, psych, homecare, rehab, pharma, and others are being terminated from existing contracts, deselected for non-renewal, or ignored or denied participation when they pitch a health plan to get a new contract.

Do one of the above scenarios describe your current situation?

If yes, this article may offer you a different approach to circumnavigate the hurdle.

A few pre-flight checks before you begin:

1. Do you understand ERISA as it relates to managed care and dealing with self funded health benefit plan sponsors (employers, unions, associations). If your answer is "no", you'll really need to get a grasp of ERISA concepts and how ERISA relates to provider network, contracting, and disintermediation (contracting directly with self funded employers, labor unions and associations). Don't know how ERISA works or how to use this knowledge to your advantage? No problem, there are people to help you. I am one of them. No time to execute your strategy? No problem, if you can afford to pay for assistance you need, you can outsource it to someone who will handle it for you. No time, no money and no skill? Problem. Overcome the problem with training on skills you need to know. No money to take the training? Problem. Can't means won't. In about 2 hours' time, I can coach you privately on understanding and navigating the ERISA quagmire and coach you on what to do and how. I offer you the option to come to Denver or we can do it online in a personal coaching session. The price is the same whether we do it online or you come to Denver. Or you can take my next Master Class on December 4th and 5th and learn a lot more for about $200 more.
2. Do you know where to access and what to look for in self-funded health plan sponsors' IRS Form 5500s? If your answer is "no", you won't be able to use this strategy without this knowledge. If you know this information, you don't need anyone to generate or source leads for you. You know where to find them and what to do with them. All you need is an outreach campaign strategy and time to execute it. Don't know how to build a campaign strategy? No problem, there are people to help you. I am one of them. No time to execute it? No problem, if you can afford to pay for assistance you need, you can outsource it to someone who will handle it for you. No time, no money and no skill? Problem. Overcome the problem with training on skills you need to know. No money to take the training? Problem. Can't means won't.
3. Is your professional and brand reputation squeaky clean, 5-star, and super fabulous everywhere someone finds you on the Internet? If not, fix that first. Do whatever it takes. Answer any negative comments on review and feedback sites. Show appreciation to positive reviewers. Anything less than a 4-star rating (or even worse, no ratings and no feedbacks) is a brand liability. If you need a current and real time snapshot of all your feedback and comments in one place, my staff will run one for you. Visit this page on my website and email us to request a reputation snapshot. The cost is $5. The report output prepared for you enables you to preview how others see you when they search for your brand online and also indicates what you can fix and how. You can fix identified issues all by yourself if you have time. It won't cost you a penny if you do it yourself. The report looks in so many places that takes two days of automated Internet crawling by our platform searchbots to prepare for you - so please be patient. If you decide you want help to fix the issues found, talk to us and decide if you'd like to hire our social media concierge to fix it for you.
4. Have you amplified your brand differentiation factors? In other words, if an employer, labor union or association that is self-funded were to give you an opportunity to discuss your value proposition, what unique and specifically relevant benefits can you offer them? If you say, "better something", be able to prove it with independently verified statistics. If you say "cheaper something", be able to prove it with independently audited comparisons to your competitors that they already access. If you say "faster something", be able to prove it with independently verified comparisons to your competitors that they already access. If your only claim to fame is that you do what everybody else does at the same price, but you aren't better, cheaper or faster, you need to revisit Michael Porter's Five Forces. As you do the PFF exercise, you must critically determine what WILL (not "might") make a prospect go through the time and trouble to switch loyalties or inconvenience themselves to do business with you. After all, they paid the network developer (ASO, TPA, PPO) a monthly access fee (about $75 per employee per year) to be entitled to discounts with the existing panel of contracted providers that compete with you. What specific angle can you target to prove your competitive advantage that is valuable - to them? Keep in mind that you can combine differentiators. For example, you may not only specialize in servicing patients with a particular treatment, procedure or service or product, but also offer a money-back guarantee on your services - or be willing to share performance based risk. The fusion of these two characteristics could make your very special. Also leep in mind that your differentiator must be true. In other words, you can’t just make one up. You have to live it. This is what my colleague, Ilan Geva calls a "living brand". It must be true and consistent at every touchpoint. If you promise a differentiator but fail to deliver, you will damage your brand.

If you need me or my branding specialists to help brainstorm these differentiation angles with you, that's consultative. I answer general answers like what is already in this article at no charge. When you want specific answers applied to your unique situation, I charge my usual and customary consulting fee for my time.

Remember the old adage, "prescription without diagnosis is malpractice." I won't give specific guidance on the fly. That's the mark of an amateur. You don't need to pay any expensive retainer contracts to hire us; just pay for the time you book at the time of service.

Please keep in mind that from September until December 31, providers are negotiating and renegotiating contracts for 2017. With about 4000 managed care contracting and strategy clients, this is as busy a time for me as tax time for a CPA. An hour of my time may be tough to nail down that also happens to be convenient for you. I'll get up early or stay after hours for you with a little advance notice. I'll even schedule a call early on a Saturday if necessary if you are busy during the week. By early, I mean we must conclude by 10:30a (US Mountain time) because that's when family expects my undivided attention. If those offers don't work for you - best of luck! I can't help.

Which decision-makers to target, how and why and what to pitch

1. Have you determined which employers have done substantial business with you in the past? This is only possible if you have collected and stored this information in your patient demographics files. Usually, most patients are asked to complete a new patient profile. Part of this information is where they work, coupled with information about their insurance plan.
2. Run a custom report and create heat maps to analyze employers whose employees have done business with you. A free tool is available at https://www.openheatmap.com/

How to proceed if you passed the pre-flight check

1. Create and review your data in a spreadsheet. Learn where your patients live (zip code report) and which employers have high impact on your business. If you hire our team or another consultant you must be able to supply this for us to be able to help you.
2. Analyze what they bought (frequency, outcomes, significant revenues, accounts receivable performance, denials, appeals, and fully-loaded activity based costs.).
3. Analyze why they bought what they bought and what influenced their purchase decisions ( your "steerage" factors) (e.g., trending diagnoses, trending referral influencers, ER call, steered consultations from colleagues, etc.)

If you cannot supply these data, I can't help you. Call Anne Bancroft. She was the miracle worker. Oh, right, she passed away in 2005. Sorry. This strategy won't work without this data. If you didn't collect this data or put it in your patient account files, you can't analyze your existing customers and business for this exercise. If you cannot access this data for whatever reason, you cannot measure your market and find any value gaps you might be able to exploit in the marketplace. A pity. Without it, you can't pay anyone to bail you out on this one. This strategy is not for you. Consider improving this going forward. Maybe next time....

Step-by-step Instructions:

Let's assume you have this data and know your customer and your value gaps Let's also assume you know with which employer they are affiliated, and which provider network they currently use, and the average reimbursement for your services that they are responsible to pay when claims are incurred.

1. Find the contact information for the self-funded health plan administrator on the IRS Form 5500. If you don't know where to access the Form 5500s, you probably need a little help - not just with getting the form, but how to put the data on it to use. Consider asking for help or coaching. Or you can buy a list for about $1800 from several sources. The list size is about 80.000. Every employer or group with 100+ participants on the plan must file a Form 5500 and they are FOIA available, you just have to know how to access current files. So, no you don't have to pay for it. You have to pay for someone's time or the convenience to do it for you.
2. Prepare your unique pitch, distill your data into nice highly visual graphs and charts, and a sample report of what that employer will want to know and need to know. If you have all this and don't have the ability to produce a beautiful pitch deck and targeted report specific to an employer with their relevant data, you could hire a graphics firm, a marketing specialist, and advertising wordsmith, and when you have it all drafted in the rough, find an intern from a graphics design college or art institute to produce it for you. I did that with a local nonprofit on a rebranding project and the student was thrilled with a $750 project stipend and learned a lot. Another option is to have a professional design your shell documents and you edit them for each pitch. once you have your drafts, you can use Fiverr.com to find graphic artists looking for work to produce the shell for you.
3. Make the call and if given the opportunity, make your pitch. Don't do this via email. Call and schedule an appointment for a follow up discussion by phone or visit in person. Don't send all your pitch information by email, even if requested to do so. Not until you've had the discussion. Show your data - that is unique to them - on screen and offer a copy after the discussion as a leave behind that you email. Don't do this beforehand or you will kill your opportunity to pitch and discuss.

What's so special about ERISA plans?

Plan Administrators have certain fiduciary duties and liabilities - one is a duty of loyalty - to place the best interests of their plan beneficiaries at the forefront of all decisions made using plan assets. Can you leverage that insight into your opening salvo? Another fiduciary duty is to conserve plan fund assets wherever reasonable and prudent to do so. Can you leverage that insight into your opening salvo? If they are not compliant in fulfilling with these two duties, there are grave consequences from both the IRS and the US Department of Labor. If you cannot leverage these two points in some way to make a compelling cold call pitch, don't waste their time... or yours. ...or mine. (See previous comment about Anne Bancroft.)

Cinching the deal

Many plan administrators may be interested but feel they are not ready to draft an agreement to contract with you directly. They will use this as a bona fide delay tactic. They may also not want to call the corporate counsel and commission such a document. That's easy to solve. Have one ready for them. A simple Letter of Agreement is all that is necessary, not some 40 page contract. If you don't have one you can use or adapt to this need, I can draft it for you and your lawyer can review it and bless it. I include a model template in course materials for my ERISA class. You can purchase it for the same price as class attendance or you can take the class. The choice is yours.

If an employer, union or association decides to do business with you this way, it may be viewed as a material modification of their plan. If this is the case, they must create and document and disseminate a Summary of Material Modifications. Agree to cover the cost of this document as a part of the onboarding process. It may cost $100-$200 to have it drafted. They will also require a wrap document. The wrap document is a requirement that ties your deal, their existing network access and existing benefit plan rules, eligibility and other details together in a package with one big red bow. It also helps them to only have to file one Form 5500 instead of one for their existing plan and one for your unique side deal. My staff and I can help you help the client you've won with the wrap document if necessary. The cost is about $700. The document is about 30 pages in length. Offer to cover the cost for them if they will accept your deal. It's a small price to pay to move forward quickly and get them on board and using your services.

Good luck. If you believe that this article was helpful, I hope you'll click "like" and share it. If you have some point to add, please do so as a comment. It will help many others facing the same frustrations.

If you need help with any of the points above and you believe I can help you, call me at 800.727.4160. My team and I are here to help you in any way we can.

ABOUT THE AUTHOR

Maria Todd is an award-winning, trusted adviser and expert specialist to hospitals, clinics, governments, healthcare business owners, investors, and independent professionals. Clients call on her to help them do a better job of marketing, branding, customer service improvement or contracting with insurers and employers, and to grow their business.

Maria is the CEO of Mercury Healthcare International, in Denver, Colorado and the founder of Mercury Health Travel, the leader of the Health Tourism Practice Group of Mercury Advisory Group, the Executive Director of the Center for Health Tourism Strategy, its research and education resource center, and a Board Member and Advisor at Higowell, the world's first health tourism operations platform. She has been recognized as an Academician with the Ukrainian Academy of Rehabilitation and Human Health and is a member of the Scientific Committee of Termatalia in Spain. She is also a Board Member at Global Health Connections, a nonprofit organization associated with the University of Colorado MBA-HA program. She is the author of 15 internationally-published business improvement books in healthcare administration and health tourism. 

Invite Dr Todd to speak at your next event. She presents a compelling workshop of interest to healthcare contractors and suppliers on Opportunities for Direct Contracting with ERISA Self-Funded Health and Welfare PlansMariaTodd. She also presents Master Classes for managed care contracting, physician integration, and concierge medicine startups.

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