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By Monica E. Oss, Chief Executive Officer; Deb Adler, Senior Associate & Richard Louis, III, Senior Associate

One of the most frequent requests our team receives is to help provider organization management teams get new (and preferred) contracts with health plans and accountable care organizations (ACO). The reasons are obvious-more Americans receive their health care through health plan and ACOs than ever before (see Navigating The Changing Relationships Between Health Plans & Provider Organizations). The challenge? There are 4,000+ health plans and ACOs-all with different populations, needs, rules, and issues. And, depending on your geographic service area, your organization may need contracts with several of them.

So how to tackle this complex marketing challenge? Our team has developed an six step approach that management teams can use for organizational business development:

  1. Set strategic goals
  2. Develop an external market map
  3. Develop a solution-focused relationship strategy
  4. Build the payer pitch
  5. Manage the proposal, rate negotiations, and contracting process
  6. Focus on implementation, consumer pull-through, and contract management

Set Strategic Goals

First and foremost, you need to build a link between your strategic plan and your payer marketing plan in a way that takes a clear-eyed look at your services, your geography, and the performance data needed for each service line. This internal analysis phase should examine your organization’s strategy goals, operational capabilities, risk-based contracting competencies, and current performance. Each program and service line needs a comprehensive financial analysis, including an understanding of your unit costs, and clinical performance review. With this internal analysis, your team can determine how to align your payer marketing strategy with your strategic plan and market position.

Develop An External Market Map

All payer marketing starts with market mapping and identifying which health plans are “good business development targets” and what they want to buy is mandatory in a VBR environment. The “right target” will rely on finding out what parts of the market are being managed in these contracts, and by which payers. Getting a complete picture of your market requires an external analysis, resulting a three-pronged market map:

  1. Start with the payers in your service area-For all the payers in your market, (including Medicaid managed care organizations, commercial insurers, Medicare advantage plans, etc.), you need data on their enrollment, coverage, current relationships with your organization and your competitors, as well as which measurements the plans are need to support “value.” Your team should conduct interviews with as many payers as possible to understand their key “pain points”, how they are measuring value, and their key strategic priorities.
  2. Next, research the consumers-If you are going to positively affect performance, you’ll want to find consumer data on demographics, health care coverage, and service needs.
  3. Finally, examine your market competitors-Identify your competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of your own programs or services. This means researching all the organizations in your area to determine their revenue, services and programs, consumer base, the payers that they are working with, and whether they are operating in a value-based contract (and if you can, how successful they are).

Knowing your potential customers and your competition is key to building a solution-focused program that can meet health plan “pain points.”

Develop A Solution-Focused Relationship Strategy

Once your team has identified your market targets, the next step is understanding their specific needs and building relationships with health plan managers. To build relationships, you need a “solution-focused sales” approach. Your goal is not to “sell them” what you do—it is to understand their problems and develop solutions that meet their needs.

The objective of your initial outreach is to know the payer’s pain point so you can develop a “value story” for your services. It’s a mistake to walk in and attempt to describe the problem when the payer knows exactly what their problems already are. The key is for the provider organization’s executive team to understand the problem from the health plan’s perspective and how they will measure success.

Start by selecting the key payers identified during market mapping and build a profile and action plan for each, that includes:

  1. Identification and contact information for the network manager and clinical manager in your region
  2. Understanding of the health plan network application process and a copy of their facility/organization provider network application form
  3. Provider web portal address and key features available
  4. Member web portal address and key features available
  5. Key market intelligence related to the health plan—enrollment by locale, insurance service offered, markets sectors served, ACO relationships, etc.
  6. Electronic copies of their network manual; level of care/medical necessity guidelines for residential substance use treatment and for residential eating disorders treatment; and facility/organization site visit guidelines and checklists

Gathering this data is essential to planning your business development efforts. But don’t forget the relationship building. Health plan managers want to work with provider organization executives who bring “network value.” That simply means the provider organization team understands managed care and value-based principles from the top down, aligns with payer expectations and goals (fiscal, customer satisfaction, treatment outcomes, single point of contact, referral network, etc.), and has adopted the infrastructure to deliver services (managed care readiness) within a VBR platform. Understanding the immediate and long-term needs of the payer will enable you to develop the solutions that they are looking for within their service area; this is your “value story.”

Build The Payer Pitch

With an understanding of each health plan’s needs, it’s time to develop your payer pitch document to demonstrate your solution. The pitch document should be a short overview of the services your organization delivers and demonstrate the value proposition that your proposed solution can provide the health plan. Prepare a full description of the service/program, a cost/benefit analysis, and rate ranges. This is your opportunity to demonstrate that not only do you understand the market and their needs, but also that you have a concrete solution and plan to address their problems. There are a few key elements that should be part of every pitch deck:

  • Introduction to your organization, including a statement about your interest in partnership/contracting and your unique positioning in your market
  • Brief organization description-mission, vision, values, key executive and clinical leadership
  • Description of programs and services (include specialty services)
  • Populations served
  • Outcomes data, including clinical, patient satisfaction, intake/admission (timely access, low no show rates)
  • Risk-based contracting management capabilities (customer-centric intake/admissions process, revenue cycle management, performance data tracking and reporting, account management, referral network development, etc.)
  • Highlights of unique program capacity or clinical capabilities

The key here is to highlight the quality results (not processes) your organization has achieved that will resonate with the payer. These need to be presented in a measurable way. Examples: support the payer in improving HEDIS scores by X%; Readmission rate within 30 days is below Y%; Consumer engagement rate in community-based services is Z% post initial appointment.

Manage The Proposal, Rate Negotiations & Contracting Process

With positive feedback about your solution concept, your team can move to proposal development. One half of the development process is clinical and operational-what are you proposing to do and what performance measures do you expect? The other half is, what will this cost and how much financial risk are you willing to accept as part of the reimbursement model? Your team needs to know your proposed model, its performance metrics, and its costs, in order to negotiate a payer partnership.

When it comes to VBR, taking “best practice” from concept to practice involves some advanced management competencies-analysis market intelligence, feasibility analysis service line design, and the ability to manage performance-based contracts are front and center. If you don’t have these, meeting the requirement of any contract will be difficult to impossible.

Focus on Implementation, Consumer Pull-Through & Contract Management

When the partnership is formed and your organization is providing your new program for your new partner, realizing revenue may require a new approach to referral source and consumer marketing. This is pull marketing-provider organizations need consumers to want their services. In our current market, it’s all about endorsements, reputation, and web optimization-with a focus on building brand identify through repetition of message and imagery. Typically, consumers make selections quickly, so it is essential for provider organizations to make their presence in the market known. There are six key elements for internet-integrated consumer marketing:

  1. Offering the right services, with the right positioning, at the right price
  2. Addressing pull through issues with payers and referrals sources – building new relationships and maintaining existing relationships
  3. Marketing materials (both print and online) conveying the right message to consumers
  4. Making sure consumers in need find you – web content planning, web site design, and web search optimization
  5. Maintaining brand, reputation, and relationship with referral sources and consumers – stakeholder engagement plan and team
  6. Building customer web functionality that integrates with your service delivery

Remember, when it comes to executing a VBR plan, it comes down to performance. After you have the contracts and you’re delivering the services, you must be able to demonstrate that your organization is providing the best service to both payers and consumers. But that is a conversation for a different day (see How To Prepare For Value-Based Reimbursement: Four Key Competencies For Success).

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