Greeting from Long Beach! Today was the opening day of The 2019 OPEN MINDS Management Best Practices week. I had a chance to sit in on today’s executive summit, How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating, & Contracting With Health Plans, with OPEN MINDS senior associate Deborah Adler and guest faculty member, Yanick Hazlewood, Esq., Vice President, Third Party Payer Contracting, LifeStance Health.
My big takeaway from the day? Brief is best.
In the discussion today about the “how to” of creating partnerships between provider organization and health plans, there were three areas of focus—presenting services to interested health plan executives, negotiating contracts and rates with health plan executives, and building on-going relationships with these organizations. At every point, building a deliberate and brief messaging was the key.
Deb Adler opened with a discussion—and examples—of health plan “pitch decks.” This is the document a provider organization management team uses to communicate about their services to payers and health plans—a short (less than ten slides) summary of the competitive differentiators of those services. In marketing vernacular, this would be the “elevator speech” about market positioning and competitive differentiation (see What Are Health Plans Actually Doing? and Health Plan Business Development For The Entrepreneurial Provider Organization—Step-By-Step).
Most important in the pitch deck is a “value summary” (on one slide) of the quality differentiators and the cost differentiators of an organization’s services. The quality differentiators could be access, measurement-based care, follow-up services, social determinants, consumer engagement and well-being, or some other factors. On the cost side, differentiators could be length of stay, emergency room use, readmissions, or other cost factors. Ms. Adler did provide insights about what most health plan managers are looking for—access to prescribing professionals, telehealth, and HEDIS scores top the list. The key to the pitch deck is presenting a brief targeted message.
From the discussion of how to communicate your services, the session turned to contract and rate negotiations. Whether negotiating a first contract, a contract rate increase, or a value-based payment arrangement, Ms. Hazlewood provided a step-by-step approach on how to prepare for discussions with health plans. My takeaway? Be brief and to the point, invest in lots of preparation, and be prepared with a succinct proposal and ask.
I also picked up some useful benchmarks to guide this process duirng the presentation. Rate increases on existing contracts are a 60-day task, while proposing some type of alternate payment arrangement will take about a year. The best time of year for requesting rate increases is March to July (after the new year’s budget is set but before it is all spent). A high-end goal for behavioral health rates is 110% to 115% of the Medicare fee schedule; however, most health plans won’t go for increases of more than three to five percent in a single increase—which is why Ms. Hazelwood and Ms. Adler recommend reviewing and requesting contract changes to health plan contracts.
At the wrap of the day, the discussion moved from contract and rate negotiation to building on-going relationships with health plans, where I picked up a few key recommendations: First, develop relationships with many managers within the health plan—both local and national. Purposeful outreach at industry conferences (with targeted follow-up) and frequent and short messaging to these many managers supporting the brand and service market is a key to building these relationships.
Second, another big theme of the day was patience—patience in building a value story, patience (as an asset) in contract and rate negotiations, and patient in building long-term relationships. Remember, it’s a marathon and not a sprint!
For more, OPEN MINDS Circle Premium and Elite members can check out today’s presentation guide and the contract/rate negotiation planning form (see How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating, & Contracting With Health Plans). And, for more on health plan contracting and rates, check out these resources in the OPEN MINDS Circle Library:
- Health Plan Relationship Building Skills Key To VBR Success
- Adjust Your Strategic Sails!
- Getting On The Marketing Plan Path
- The New Board Conundrum—Managing Value
- The Five-Step Process To Demonstrate Your “Performance” To Health Plans
- Becoming A ‘Blue Chip’ Provider Organization
- The OPEN MINDS Health Plan Partnership Summit: A Guide To Developing & Negotiating Partnership Agreements With Health Plans
- From Pain Point To Revenue
- Selling Social Services To Payers & Health Plans: A Step-By-Step Approach
- Health Plan Business Development For The Entrepreneurial Provider Organization—Step-By-Step
For more live coverage from Long Beach this week, tune in this week when we report on The 2019 OPEN MINDS Management Best Practices Institute—be sure to check out our ongoing live and archived coverage of the event on Twitter @openmindscircle – #OMBestPractices.