By Karen Swedersky

This is the second part of an article on the management of relationships between health care providers and managed care groups. Part I of this article was published in the Winter 1999 issue of the Tracker.

As healthcare workers are discovering, working with Managed Care Organizations (MCOs) is very different from working with traditional insurers or Third Party Administrators (TPAs). It can be even more of a challenge for occupational practices because MCOs often engage in the relationship as if the occupational provider were a family physician in their group health network. This lack of understanding on the part of the insurer or TPA when developing and managing workers’ compensation MCOs can create strenuous relationships for everyone. As more and more states transition to some type of managed model for workers’ compensation, it will become increasingly important for occupational practices to navigate these relationships successfully.

There are many factors that fuel these misunderstandings: occupational providers are relative newcomers to managed care, whereas most Primary Care Physicians (PCPs) have been working with some version of managed care for over ten years. The role and function of occupational physicians is also generally not well understood. Often, because we refer to ourselves as "Occupational Specialists," we are lumped into that category rather than being viewed as the "Primary Care Gatekeeper" for work related health. Finally, the insurers and TPAs will often approach contracting and contract management from a group health perspective. They fail to recognize the unique variables that are crucial to workers' compensation management for providers: knowledge of the work environment and any applicable regulations, working relationship with the employer as well as the employee, and participation in safety and prevention programming at the work site.

Role Clarification

As all occupational providers understand, the worker cannot be treated in a "vacuum" as they would on the group health side for personal injuries. The more one provider or provider group works with a company, the more a company-wide view and understanding develops. which single providers cannot hope to achieve by treating patients individually. Because this collective approach to managing the health of the workforce is unique to occupational health, most insurers and TPAs do not understand its existence let alone its value, and they will often continue to manage the network as if each patient were being seen by their family physician.

Ironically, despite the fact that occupational health providers essentially work like "Gatekeepers," referring the patient on to a specialist or other parts of the delivery system, workers’ compensation networks, in all probability, will not contain primary care "Gatekeepers." In many group health managed models, the "Gatekeeper /PCP" serves the vital role of determining when and to whom a patient should be referred. These "Gatekeepers" also typically receive a per member per month payment for managing the patient’s care. This allows for reimbursement to the provider, whether the patient requires care or not, and is calculated by the MCO based on the predicted utilization.

The reason for the absence of this common mechanism found in many group heath plans is that the age/sex risk assumptions insurers use to predict utilization in group health do not apply when calculating utilization and costs in workers’ compensation. Workers’ compensation is a much more random occurrence and is not influenced by age/sex but by other factors that do not impact the group health rating experience. Some of these factors are workplace safety, prevention, work environment, relations with management, and the willingness of the employers to accommodate work restrictions and provide alternate duty positions. Consequently, this source of revenue or payment coverage is not available in workers’ compensation because it cannot be reasonably predicted at the patient level. It can only be predicted in broad populations by industrial classification with no assurances of where that population will ultimately go for medical care based on freedom of choice in comp laws. Consequently, MCOs are unlikely to create incentives for payment when they cannot cover their risk. Without a financial incentive to create this mechanism, MCOs are unlikely to replicate this common group health "Gatekeeper" model in their workers' compensation products.

This does not mean, however, that companies cannot select a "Gatekeeper PCP," aka occupational practice, for their company within the confines of their state’s rules regarding direction of care. In reality, this is what many companies have already done, they just do not have a name for it. Occupational providers have an opportunity to educate both the MCO and, in some instances, the corporate customer of the value of designating an occupational practice as their "Gatekeeper." Even when state laws have leniency in allowing workers to choose their own provider, preliminary studies indicate that 90-95% of all injured workers will go to a provider if directed by their employer. Also, the employees will continue with that provider until the injury is resolved, if the employee perceives care to be satisfactory and if the practice has a good reputation.

Using occupational practices in this capacity will probably not come naturally for most MCOs. So, educating and convincing them that utilizing occupational practices as the hub of their network will be difficult and probably unsuccessful in the early stages. Keep in mind that in group health products, the MCOs establish and manage the network and the patient picks the PCP based on the network listing. This is their frame of reference and they may be extremely hesitant to hold one group or a group of physicians out as being truly preferred providers within an existing network.

However, laying the conceptual foundation for being an "Anchor Medical Group" or "Primary Treatment Center" for work-related health will be crucial to creating occupational practices as the hub of workers' compensation networks at some future point. Financially, this will work to the MCOs’ advantage (not to mention the employer’s and worker’s). The financial return, however, will be in the reduction of lost work days and more aggressive treatment patterns—very different from how they calculate per member per month rates in group health.

Signing Contracts: Do Your Homework

Perhaps the most important part of the process in creating and managing these new relationships successfully is the review and negotiation of the written contract. Everything will begin and end with this agreement. Review it carefully. When signing contracts it is imperative that you understand thoroughly the rules of the game, particularly if your state’s workers’ compensation laws have been changed or modified to allow for managed care models. You cannot assume the MCOs will know the law and will write contracts in accordance with state rules or generally accepted workers’ compensation practices. This understanding will also be important in navigating who does what. It is not inconceivable that the MCOs will attempt to push work to providers without compensating them for doing what, in many cases, could arguably be MCOs’ work. If your hospital’s managed care department is handling contracting, be certain that they know and understand the new law and your needs and desires for successful contracting. Touch base with them routinely to ensure that negotiations are going according to your expectations.

The MCOs will also require a significant amount of documentation during the contracting process. You can facilitate this process by preparing for the MCOs’ information needs through standardizing and preparing documents or MCO packets. A sample list of commonly requested items is noted below:

MCO Information Checklist

• Identified points of contact with your system: provider relations, billing and administrative/contractual/customers.

• List of physicians with DEAs, medical license, training & certification, years of experience.

• Statement of single signature authority of senior administrator to sign contracts on behalf of employed physicians.

• List of primary and secondary sites for your system.

• Maps, hours of operation, authorization to treat or other helpful forms or written policies.

• List of your secondary (referral) providers.

• Certificate of insurance; verification of malpractice insurance.

• Statement regarding status of malpractice claims.

• Quality assurance plan, audit reports and process improvements.

• Patient satisfaction cards and reports.

• Employer satisfaction reports.

• Organizational chart and phone list for all relevant areas of system.

• American College of Occupational and Environmental Medicine (ACOEM). Code of ethics.

You must know not only who your customers are, but also what they are like. How much revenue do they represent? What is their loyalty and satisfaction with your program? Will they favor your program over the MCO? What is your current market share for workers’ compensation? Will the MCO initiative increase or decrease that share? If you do not readily know the answers to these questions, you must find out before you sit down to negotiate with the MCOs. They are accustomed to having the upper hand and they will take advantage of you, if you let them. Knowledge is power and if you have maintained excellent relationships with your customers, you have nothing to fear. In most cases, the customers will pick you over their MCO, assuming your quality and service is excellent.

These are important questions and their answers will determine how and what you negotiate with each MCO. If you are an established program with an excellent reputation and solid market share, you should be able to get exactly what you want out of your contracts or have the confidence to walk away if the deal is not advantageous or to your liking. If your customers are loyal to your program they will make their preferences known to the MCOs. Unlike group health, the universe of providers who are excellent at workers’ compensation is much smaller. More often than not, employers have direct experiences with the providers they prefer and will dictate to the MCO which providers should be included or excluded from the network.

Once your contracts are signed, you must manage them. Be sure that key individuals such as the billing supervisor, administration, center management and sales know which plans have been contracted with, along with renewal dates and what your obligations are for each contract. This is especially true of discounts and agreements for payment—be certain your billing department knows what has been agreed. Also, routinely supply your customers with this information. Do not assume that the MCO’s marketing will be sufficient to educate your customers and keep your current clientele as active customers of your practice.

Who Owns This Relationship?

As with any other relationship, you will only receive what you put in and what you deserve. Demand the best and give the best! If you allow yourself to be walked on by the MCO, that is what will happen. Ask for what you want but be reasonable and flexible. Often MCOs will give much more when asked—but this will never come voluntarily.

MCOs will probably try to get between you and the employer. They understand the value of controlling this relationship and they will do everything they can to be the only one to have a relationship with the employer. Remember the employer has always been your customer—do not give up any piece of this relationship to the MCO. Some MCOs may demand that discussions with the employer only occur if the MCO is present. Never agree to that requirement. It will be an administrative nightmare. If anything, you may need to step up your communications with your corporate customers just so they remember who you are and what you do. Consumers are often confused about MCOs—they often believe MCOs render care. Many MCOs thrive on that misperception. They understand that the customer will always need medical care when they are ill or injured just a little more than they will need the insurer to pay for coverage.

Solicit opportunities to co-market services but make sure you are receiving as much as you are giving. Verify listings in the MCO’s Physician Network Listing and hold them accountable for omissions or errors. Some customers will be petrified to pursue or maintain relationships if you are not clearly listed as being a member of the MCO’s network. Their mistake should not cost you business. You may have other opportunities to co-host events or educational seminars. Be creative and discuss how you can both cross-market your products and services. They may not work or even be necessary with every MCO, but it should be part of your tactical plan with these strategic players.

Troubleshooting

Many providers have problems with MCOs "receiving" paper work. As painful as it is, document the number of times you routinely have to re-copy or re-fax documents to the MCOs. This is duplicate work, an added expense for you, and it ultimately delays payment. Stand your ground and if you know your systems and practices are solid, do not tolerate inefficient "games" or performance from the MCO. A successful tactic you can use is to require a written request from the MCO to re-copy or re-fax documents. Or, you can delay such work until the end of the day or whenever it is convenient for you. If this continues to be a problem for your program you must document the problem e.g., paperwork is faxed an average of three times before it is received, and discuss the problem candidly with the MCO. Most states will not tolerate flagrant abuse or inefficiencies and will want to hear about MCOs with performance problems. If your regulations will allow it, don’t be afraid to charge the MCO for any ongoing abuse in the form or repetitive requests for records.

Another area where misunderstandings can often arise is in the regulatory compliance, particularly the Americans with Disabilities Act (ADA) and the release of medical information. Most insurers and TPAs have little knowledge or understanding of federal regulations and workplace health. Regulations regarding substance abuse testing, elective services and the types of medical information they are entitled to from a workplace illness or injury is very different than in the group health arena. Occupational providers must be prepared to educate and re-educate these groups about clinical procedures that must occur and the types of information that they are entitled to receive. Having abbreviated copies of the ADA, which explains the essential elements of the law and medical release of information, and copies of your policies and procedures for the release of medical records at the time of contracting should lay the foundation for avoiding most problems.

If you previously have not had a Managed Care Liaison/Representative, now is the time to have one. This individual should be responsible for creating and sustaining excellent relationships with all MCOs as well as identifying and resolving problems. They should also be the point of contact for all contracting questions, issues and provider applications. Just as you have representatives designated for your priority customers, so should you have representatives designated for your MCO customers. This individual should represent your whole delivery system to the MCO and not just the occupational medicine program, creating a seamless dialogue between your system and the MCOs, wherever problems or issues arise.

Managed Care, MCOs and the interface with occupational medicine represent a brave new world. But it is a world that is coming and already exists in some areas of the country. Occupational Practice Managers must learn how to navigate and perform in this new world. Since the role of the occupational provider will probably not be well defined or well understood by the MCOs, managers must take ownership of educating MCOs about who we are, what we do and why we are valuable to them. This process will take time. Some MCOs will come to understand our value very quickly, others will never get it. We will also want to keep educating the corporate customer for they truly are our saving grace. Success and profitability are possible with managed care, but only with knowledge, perseverance and a willingness to understand as well as create the new rules of the game as "integrated benefits" and "24-Hour" products become the norm. Occupational providers cannot assume that the delivery systems of the future will be created to anyone’s advantage, let alone occupational medicine’s. Taking an active and participatory role will be imperative in negotiating partnerships that will maintain the role and value of occupational practices – now and in the future.

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Contributor: Karen Swedersky, MHA assists occupational health programs as a member of the Occupational Health Research consulting team. As a former Program Director for one of the largest occupational practices in Ohio, she successfully negotiated with over 57 MCOs without rendering any discounts when Ohio transitioned to a managed care workers’ compensation model in March, 1997.