The healthcare landscape is ever-changing and can be hard to navigate for providers. This is especially true for physicians opting to go private in order to offer personalized care for their patients. So, if you are looking to build a sustainable practice, this article is for you.
Running a Sustainable Private Practice
Private practice is a major part of the healthcare system. Many providers choose private practice because of its work-life balance as physicians set their own hours and choose how to communicate with patients. Additionally, another benefit for going private is having autonomy; as a medical practitioner, you decide how to run your office.
There are several aspects to consider when running your own practice, many of which we have elaborated on in our Insights section. Today, we are going to focus on navigating payer contracts. Indeed, these are the backbone of any healthcare provider and might be overwhelming to navigate.
An Overview of Payer Contracts
The American Medical Association lists the following types of payers (also spelled ‘payors’):
- ERISA Self-Funded Employee Benefit Plan/Union Trust. Responsibility for overall cost of care lies with the employer.
- Third Party Administrator. An entity that contracts with ERISA plans to administer functions necessary for plan operations.
- Fee-for-Service Government Programs (Medicare, Medicaid, etc.). The terms are set by the government entity.
- Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO). These organizations build a network of providers that agree to their payment structure or fee schedule. The difference is that HMos limit access to providers who are in the network only, and PPOs offer out-of-network visits at a copay cost.
- Point of Service (POS). A POS plan is a hybrid PPO/HMO which provides the flexibility of a PPO while retaining cost controls.
- Leased Network/Contracting Networks. Physician networks are typically organized and managed by entities other than insurers.
- Accountable Care Organization (ACO)Clinically Integrated Network (CINs). The voluntary networks of providers are typically organized and managed by health care providers (e.g., health systems) with the goal of delivering high-quality, coordinated care.
- Health Care Sharing Ministries. A nonprofit ministry that solicits contributions for sharing of health care costs among members.
A Checklist before Signing Any Contract
When considering what contract or contract mix might be best suited for you, you should take the time to go over the following:
- Know your costs to compare them with reimbursements and determine whether the relationship is financially viable.
- Become familiar with the payer policies, terms and conditions. Sounds easy enough, but sometimes, we lose sight of this in the hustle. Moreover, the lexicon they include can be confusing. Consulting with experts is a good idea in this case!
- Be knowledgeable of fee schedules. The contract might mention them, but you should be up to date with them outside of the contracts so as to negotiate a fair and competitive fee.
- Negotiate your rates before going through the credentialing process to make sure the licensing is correct.
- Be mindful of payment policies. Every payer is different and if you are going with a mix, you should consider how each payment policy will impact the administrative side of your practice.
- Keep a log of contract end dates. Years go by fast and before you know it, you might be out of your contract without realizing it.
- Does the contract stipulate that you may have access to a payer representative by phone or email? You may suggest this be included.
- Check for any clauses that mention changes over time and prepare for this. If you centralize your contacts into a database, you can keep track of details and avoid missing deadlines or stipulated changes.
Your strategic plan for the organization you want to build is key when deciding which contract to opt for.
Handling Payer Contracts
Making business-building decisions like selecting payer contracts can be a complex and time-consuming process that you can choose to take on by yourself or outsource.
While handling it in-house may require less of an initial investment, it eventually impacts the availability of your resources and time.
Alternatively, when you pair up with healthcare consulting experts like Peregrine Healthcare, you can rely on their experience to steer you in the right direction. Additionally, their in-depth knowledge of all of the aspects mentioned above will help you materialize the vision you have for your business.
The biggest benefit of partnering with an expert organization is, at the end of the day, that you can focus on your patients 100 percent, leaving contracting burdens to professionals in the field.
Peregrine Healthcare has developed strategies to maximize contracts, a unique system that leverages the pros and cons of each payer, and we are up to date with market reimbursement.
Learn more about our customized contracting solutions here.
