Earlier this week we kicked off The 2016 OPEN MINDS Strategy & Innovation Institute with a great keynote address, The Strategic Path To Health System Sustainability: Lessons From Northwell Health, by Kristofer L. Smith, M.D., the Senior Vice President and Medical Director of Northwell Health Solutions. Dr. Smith gave some very pointed advice to executives of provider organizations who are looking for contracts with health plans and accountable care organizations (see ‘Winning The Game’).
But that’s from the health plan perspective. What does this look like from the provider organization perspective? In the session, How To Move From Idea To Action: A Guide To Building Successful Partnerships With Managed Care Organizations, Andrew F. Vitullo, Executive Director of BioCare Recovery, laid out his plan of attack for successfully contracting with managed care organizations.
BioCare Recovery, started in 2013, provides outpatient addiction treatment services for consumers on an individualized, case rate/flat fee model. And, Mr. Vitullo has successfully expanded this consumer cash-pay model to a managed care organization (MCO). BioCare has an alternative payment model contract with the Optum Behavioral Health unit of UnitedHealth. The reimbursement model is a tiered case rate that is based on consumer acuity.
How did BioCare Recovery go about contracting with an MCO for an alternative payment model? There were four key elements in Mr. Vitullo’s approach – pulling together data on program effectiveness, market mapping, a solution-focused sales approach, and developing services that provide health plans with a clear value proposition.
Gathering Program Data – For any provider organization operating in the field today, pulling together the data needs to be step number one is “proving” your program is worth the investment, and can deliver the necessary outcomes. If your organization is looking for a contractual arrangement based on the “value” of what you deliver, the metrics of your costs, processes, performance, and clinical outcomes are essential.
Market Mapping – Another step is understanding the customers in your market – the health plans and the consumer landscape. You should know what health plans have the greatest market share, their clinical partnerships, and their benefit plans. On the consumer side, population data is needed to project market demand. This is the market intelligence component of the process – and we have covered this before (see Market, Math & Metrics and Diversification = Market Research + Math).
Solution-Focused Sales and Payer Strategy Development – Using a solution-focused approach to your relationships with health plan executives was the next key to developing value-based reimbursement arrangements (see The Health Plan Marketing Roadmap and Use Consultative Selling To Eliminate The Competition, Shorten The Sales Cycle & Close The Deal). You need to understand the concerns of the health plan executives and develop new services that are “solutions” for those problems. To gather the information needed to understand the issues of health plans, a key is to find the right person at the health plan to talk to. Mr. Vitullo noted that he has yet to have a successful conversation with the provider relations contact that you call on the 1-800 numbers. In response to this situation, BioCare Recovery had to get creative. Mr. Vitullo used a two-fold approach. First, he hired team members with health plan experience. He also reached out to managed care executives on Linkedin. Eventually, he found internal champions at an MCO, which allowed the contracting process to move forward.
Developing Services With The Payer Value Proposition In Mind – The final step is to develop services that provide solutions, and offer a variety of alternative payment models. BioCare Recovery presented three different contracting options – a shared savings model, a case rate model, and a combination of the two. According to Mr. Vitullo, the key to this portion of the process is to be flexible where you are able and be inflexible when it comes to the core tenets (the tenets that allow you to deliver on your promises) of your program.
I think the recommendations by Dr. Smith of Northwell and Mr. Vitullo are amazingly similar. You need to bring your outcomes data to the table to prove you can address the market issues that the health plan needs to solve. The similarities reinforce my belief that this is the right path to moving provider/health plan relationships from “vendor” to “partner.” My takeaway from the day? Organizations must be both persistent and patient. Finding the right person within the MCO to champion your program, and the negotiation process, takes time. You have to be persistent and you have to understand that it can’t happen overnight.
If you couldn’t join us, make sure to check out our archived coverage on Twitter @openmindscircle – #OMInnovation from The 2016 OPEN MINDS Strategy & Innovation Institute, and stay tuned for our continued coverage. And, for even more, be sure to join us at The 2016 OPEN MINDS Executive Leadership Retreat on September 20-22, 2016.