Pitfalls Physicians Must Avoid
By Dr. David Edward Marcinko; MBA, CPHQ, CMP™
By Hope Rachel Hetico; RN, MHA, CPHQ, CMP™
[Publisher-in-Chief and Managing Editor]
It is well known that stakeholders of the healthcare industrial complex often have different, and divergent, interests. Intra-as well as inter-stakeholder competition occurs; as well.
The Friends-Enemies [“Frenemies”]
For example, several decades ago, the authors were often at odds at the payer negotiation table.
He was managing partner of a large private medical practice, ASC and later PPMC. First, she was the representative of a national DME vendor, healthcare system and later, private insurance payer.
Key Pit Falls to Avoid
There are seven key pitfalls to watch out for when evaluating an MCO contract.
1. Profitability: Less than 52% of all senior physician executives know whether their managed care contracts are profitable. “Many simply sign up and hope for the best”.
2. Financial Data: 90% of all executives said the ability to obtain financial information was valuable, “yet only 50% could obtain the needed data”.
3. Information Technology: IT hardware and sophisticated software is needed to gather, evaluate and interpret clinical and financial data; yet it is typically “unavailable to the solo or small group practice”.
4. Underpayments: This rate is typically between 3-10% and is usually “left on the table”.
5. Cash Flow Forecasting: MCO contracting will soon begin yearly (or longer) compensation disbursements, “causing significant cash flow problems to many physicians and physicians”.
6. Stop Loss Minimums: SLMs are one-time upfront premium charges for stop loss insurance. However, if the contract is prematurely terminated; you may not receive a pro-rata refund unless you ask for it!
7. Automatic Contract Renewals: ACRs or “evergreen” contracts automatically renew unless one party objects. This is convenient for both the payer and payee, but may result in overlapping renewal and re-negotiation deadlines. Hence, a contract may be continued on a sub-optimal basis, to the detriment of the provider.
Assessment
Always remember, in the game of negotiations, today’s enemy – may be tomorrow’s ally.
Conclusion
And so, your thoughts and comments on this Medical Executive-Post are appreciated? Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.
Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos
Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com or Bio: www.stpub.com/pubs/authors/MARCINKO.htm
Get our Widget: Get this widget!
Our Other Print Books and Related Information Sources:
Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759
Physician Financial Planning: http://www.jbpub.com/catalog/0763745790
Medical Risk Management: http://www.jbpub.com/catalog/9780763733421
Healthcare Organizations: www.HealthcareFinancials.com
Health Administration Terms: www.HealthDictionarySeries.com
Physician Advisors: www.CertifiedMedicalPlanner.com
Subscribe Now: Did you like this Medical Executive-Post, or find it helpful, interesting and informative? Want to get the latest ME-Ps delivered to your email box each morning? Just subscribe using the link below. You can unsubscribe at any time. Security is assured.
Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos
Filed under: "Advisors Only", "Doctors Only", Book Reviews, Career Development, Managed Care, Practice Management | Tagged: ACRs, ASC, contract medicine, david marcinko, DME, evergreen clause, HMO, HMO contracts, hope hetico, IPA, Managed Care, managed care contracts, MCO, PPO, provider reimbursements, stop-loss, wholesale medicine
