1. Blue Print for Success Session 1, Overview
June, 2015

2. Leadership Mr. Steve Selbst, CEO Ms. Susan Charkin, President
Manages Healthcents Operations including contract negotiations
Successfully negotiated 4,000+ payer contracts
Invented Revolution Softwaretm and designed the product
Designed and delivered “Blue Print for Success Payer Contracting Class”
30 years as a Software and Business Executive in the Software Business at IBM
BS Degree in Business Admin, Arizona State University, Summa Cum Laude, and invited to apply for a Fulbright Scholarship
Ms. Susan Charkin, President
The Nationwide Expert in Payer Contracting and Strategy, well known
President of Healthcents since 1994
20+ years of Senior Contracting Positions for payers and providers (Healthnet, BCBS, Aetna, University of California, San Francisco, Maxicare and others)
Trustee of Natividad Hospital- largest public hospital in central California, a teaching hospital affiliated with UCSF.
Leading Author and National Speaker on Managed Care (Boston University, George Washington University, American Ambulance Association, Specialty Capitation, Beckers ASC EMS Insider and others)
Expert in ACO’s, put together key roadmap for AUA, interviewed Dr. Elliott Fisher, Brookings Institute, Blue Cross of CA and an early IPA implementer
Undergraduate Degree in Education (UVM) and MPH Degree (USF).
Ms. Regina Vasquez, VP of Account Management
Leads all of our day to day client and contract management
Led the development of a major Skilled Nursing Facility Network for a Large Payer in California
Leader in a local economic development commission and in two large non-profit organizations
Very skilled negotiator, analyst and project manager, proven track record with references, has made 15%-25% ROI for all of our clients, large and small

3. Company Nationwide Corporation formed in 1994
Core Businesses, three major products / services:
Services: Managed Care Contracting: Enabling medical providers and companies to obtain more profitable contracts with health insurance companies (HMO, PPO, ACO and Workers Compensation), General Healthcare Consulting
Both analytics and complete soup to nuts end to end negotiations
Healthcare consulting, webinars, regulations updates etc.
Education: Managed Care Contracting Training and Education for providers and insurers (AUA, Alere, AAOE, ASCA and more…)
Products and Software Solutions:
RevolutionSoftware web service
On Demand, Cloud and Intranet Based Business Model
50 Active clients, 1000’s served, Business Partnership for “Blue Print for Success” with the AUA, Alere Inc. and TUMG
Reference accounts, many published at our web site:

4. Typical Practice Revenues5%
40%
55%

5. Session 1 Objectives (Contracting Process Overview)
History of Managed Care
Is contracting worth the effort, why?
Critical Success Factors:
Analysis (Quadrant Analysis, Value Based Contracting, Data Analytics)
Winning Solutions for maximizing payer contracts
Payer Contracting Process
Understanding and matching provider’s and payer’s objectives
Handling potential “Landmines” , including what to do when a payer will not negotiate
Contract Language “Cover Your Contracts”
How to sell your practice to payers and to employer groups
Wrap up, Q and A and Quiz

6. Session 2 Objectives (Data Analytics)
Perform a benchmarking analysis of payer fee schedules using RevolutionSoftware™ to set fee schedule proposals
Identify and define patterns in reimbursement to use in an overall negotiation strategy
Analyze and benchmark billed charges against an established minimum percentage of Medicare reimbursement to avoid being paid less than any contract rate and to maximize your cash based business
Compare any two of your payer fee schedules on a “normalized code” and volume base to benchmark against each other.
Learn and use a practical technique for comparing claims’ payments to contracted rates and assess whether or not you are being “under reimbursed”
Objectively assess in network versus out of network reimbursement

7. Session 3 Objectives (SWOT and Contracts Negotiations process)
Perform a SWOT analysis of your practice to identify strengths, weaknesses, opportunities and threats to your practice in your market with each payer
Apply findings of SWOT and prepare persuasive payer proposal letter that highlights their strengths and opportunities to bring added value to the payer network
Conduct contract negotiations
How to handle various payer responses
Learn how to handle payer objections and shut downs
Handle escalations and other options

8. Session 4 Objectives (Language, ACO’s, Capitation, 10 Best Practices)
Finish contracts’ negotiations process
Language Review
Monitor Claims and remember to renegotiate (Best Practice 10)
ACOs and Capitation
Bringing it all together with the 10 Best Practices, review of
How to evaluate a managed care fee proposal
Preparing a SWOT analysis to identify opportunities and threats to a practice’s reimbursements
Conducting a managed care proposal reimbursement analysis used for benchmarking, pattern identification and business modeling
Evaluate in-network vs. out-of-network options and maximize your billed charges to uniform, customary & reasonable (UCR) levels.
Techniques for negotiating “win- win” agreements with managed care companies
Simple technique for monitoring claims payments and comparing to your contracted rates to insure that you are not underpaid

10. Session 1, “Overview” Agenda:
History of Managed Care
Is contracting worth the effort?
Critical Success Factors:
Analysis (Quadrant Analysis, Value Based Contracting, Data Analytics)
Winning Solutions for maximizing payer contracts
Payer Contracting Process
Understanding and matching provider’s and payer’s objectives
Handling potential “Landmines” , including what to do when a payer will not negotiate
Contract Language “Cover Your Contracts”
How to sell your practice to payers and to employer groups

11. Your one stop shop for all class materials
For your convenience, we have established a class web page: that contains links to:
Questions and Answers from class participants
Pre-requisite viewing and reading materials
Homework assignments and instructions
Charts presented in class
The class web page content will be updated at least one business day before each session to give you time to review materials and to do your homework and preparation work.
Overall Objective – Lay a solid foundation for Managed Care Basics to enable your practice to make more revenue
Welcome!

12. History of Managed Care & Third Party Payers
1970s – First serious look at healthcare reform:
Nixon Administration introduced HMOs
HMO act of 1973
Main informant was Dr. Paul Ellwood
$375 million in federal funds
Preempted state laws banning prepaid plans
FFS (Fee for Service) had to be changed to achieve positive reform.
1980s – Current:
Continued growth in managed care plans as way to control cost to employers/consumers.
States using managed care models to control cost of Medicaid.
Trend continues to be increased enrollment in managed care plans.

13. Is contracting worth the effort?
Pros:
Cons:
Potential to increase volume and therefore increase overall revenue
Administratively higher patient satisfaction
Administratively potentially fewer claims appeal issues and less direct collection from patients
Access to more lines of payer’s business and covered lives
Lower reimbursements than out of network – no ability to balance bill
Assumes low patient attrition, and low volume loss
Maintenance fee schedule adjustments
Potentially restrictions on covered services depending on patient’s plan
Multi-year contracts with no opt out if unsatisfied with outcome

14. Before you negotiate, do your homework!
Critical Success Factors
AnalySis
SolUtions
ProCess
ObjeCtives
Avoid PotEntial Landmines
ContractS’ Language (CYC)
Sales
Before you negotiate, do your homework!

15. Analysis Quadrant Analysis, how much do you ask for?
Value Based Contracting
Where does your practice revenue come from?
FFS Rate by CPT x Encounters = Revenue
Bundled Payment
Episode Treatment Groups
Self-performed ancillary services
Capitation
The 20/80 Rule
Identify the top 20 percent of codes that drive 80 percent of your practice’s revenue.
Use the same codes for each payer fee schedule for comparative purposes

16. Healthcents Quadrant Payer Analysis
Pay High
Pay Low
Conservative
15%-25%
Ultra-Conservative
5%-15%
Ultra Aggressive
35%-45%+
Aggressive
25%-35%
Open to Negotiate
Not open to negotiate

17. Value Based Contracting Example
Efficiency
(2% if >70 points)
Qualitative
Active E-Prescriber:
25 pts
Quantitative
(1% if >70 points)
Follows Best Practices Guidelines
50 pts
In network referrals only
>2.5: pts
: 60 pts
: pts
Patient Satisfaction
3 stars: 25 pts
2 stars: 20 pts
Generic Drug Utilization
>90%: 75 pts
%: 60 pts
%: 45 pts
Preferred Drug Utilization
>90%: 25 pts.
%: 20 pts
%: 15 pts

18. What Is a Capitation-Based Payment?
Capitation- a payment method for health care services.
Capitation based payment is when the physician, hospital, or other health care provider is paid a contracted rate for each member assigned, referred to as "per-member-per-month" rate, regardless of the number or nature of services provided.
The contractual rates are usually adjusted for age, gender, illness, and regional differences.
More to come in sessions 3 and 4…

19. Analysis – Benchmarking Before & After

20. Analysis- Reimbursement Summary

21. When the payer will not negotiate

22. Analysis – Are your billed charges high enough?
Source: RevolutionSW.com™

23. Analysis– Are you getting paid correctly?
Source: RevolutionSW.com ™

24. Question?
If we have two CPT codes, which is of Medicare, including patient co-payment, by the payer, at $1600/service and code which is of Medicare, including patient co-payment, by the payer, at $60/service and is performed 100 times a year and is performed 1000 times a year and I can get a 20% increase on one or the other, but not both codes, which code should I accept the increase on to increase my revenue the most?
Code 99213
Code 27130

25. Saleable Solutions– Payers have problems you can solve
Practice size and revenue, recent merger
Consult legal counsel about ramifications
Financial- Do you have enough $$/patients to justify a contract?
In office vs. facility based procedures
Geographic- Are you the only game in town? How close is the nearest Physician Practice that practice same specialties?
Demographics- Does your practice include large employer groups in the area?
Unique Quality/Services- What are you doing that no one else is doing?

26. Saleable Solutions – Payers have problems (Continued)
Logistics- Where do you hold privileges? Are you currently out of network and turning away patients?
Economics- What cost efficiencies does your group offer?
Electronic Health Records
Generic Drugs
E-prescribing
In-network referrals to ancillary services
Collaboration with PCP groups
ASC utilization
Quality- patient satisfaction survey, PQRI participation

27. Contracts Negotiations Process
Data Analysis
Proposal Letter
Make Initial Contact with Payer
Analyze Counter
Negotiate until agreement is reached
Escalate to Sr. Level Manager
Consider Out of Network Option
Monitor Claims
Re-Negotiate
Phase 1:
Prepare
Phase 2:
Negotiate
Phase 2:
Continue to Negotiate
Phase 3:
Monitor / Re-negotiate
Negotiations
Completed

28. Objectives Performance based Contracting Office Based Procedures
Payer
Maximize revenue and profit
Minimize fees paid
Market competitive
Cost Efficiency
Quality
Increased capacity for new lines of business and revenue streams
Provider
Optimize reimbursement
Enhanced reimbursement for high-cost, specialized services
Increase capacity for new lines of business and revenue streams
Performance based Contracting
Office Based Procedures
Reduction of length of hospital stay
Preventative care
Leverage market position (Provider)

29. Avoid Potential Landmines
There are things that payers would rather you do not know or discover:
Statewide fee schedules – several payers are moving to statewide or locally regional fee schedules that pay uniform fees to all providers. Consider the following to combat that policy:
PPO Only
Office Based Surgical Procedures
Carve outs
Performance Based Contracts
In-house, ancillary services
Make sure you can get reimbursed for all of the services you provide. Some payers are sole sourcing lab/path to large chain vendors. Even so, there are usually some services that will still be reimbursed in the office setting.

30. Trends and Directions
Medicare moving to efficiency based quality of care metrics, less fee for service, over time
See
Expect payers to follow
Number of ACOs and population of beneficiaries is increasing
About 15%-17% of US population is participating in ACO
IPAs and Hospital Systems moving in this direction
Efficiency metrics key to reimbursement on direct PPO and HMO agreements, often 5% today
FFS and Efficiency metrics, together determine reimbursements
Higher deductibles leads to the need for better patient collections
Telemedicine is here to stay and gaining traction with payers
Code 99490:
M and A acceleration
“E-everything”, technology dependent

31. Trends and Directions- Metrics moving to Efficiency Based
Limiting/reducing referrals to other providers who are non-par (this includes facilities and ancillary providers, e.g., labs and radiology services)
Increasing percentage of prescriptions that are generics vs. brand names, when a generic is available
Data baseline is payer’s data
Some contracts have a “reconciliation period” after which the provider has an opportunity to compare their utilization data with the payer’s and dispute negative measurement findings if the two data sets are not in agreement.

32. Trends and Directions- Value Based Structure
Shifting of higher percentages of reimbursement tied to incentives and value based vs. FFS
Credentialing: In state presence often required by payer(s)
In state presence means a full service, licensed, Medicare certified, accredited location in the state where the provider wants to get an agreement.
This has become an issue for smaller DMEs and
Credentialing not leading to a contract 100% of the time.
Why? To be recognized in payer systems when non-par claims go through.
Still, "bundled payment" contracts are rare. 
One of our clients was working on an episodic reimbursement scenario with a payer that included the practice and the ASC limited to total joint replacements and included the 30 days before and 90 days after the joint replacement surgery
This may not have closed since the risk balance could not be agreed to 
Other changes- number of cores Medicare will pay for on a biopsy
Used to be 12, now it's less

33. Trends and Directions- Value Based Structure
Depending on baseline there may or may not be a first year increase.
Increases are usually based on making an improvement of an agreed amount in each category.
No penalty, that we have seen on commercial payer agreements, if benchmarks are not met. 
The provider does not get their increase for that year.
In most cases the total increase (2.5% - 3.0%) is split among categories, for example:
Meeting targets on non-par referrals
Meeting targets on generic drug prescription rates
This works for most providers because it is not an “all or nothing” deal.

34. Potential Landmines
Benchmark your payer agreements against each other. Identify service categories where you can optimize your fee schedule through negotiation of specific service groups (E&M, Surgical Urinary, etc.) Don’t take the first “no” you hear. Payer organizations are usually several layers deep. The front line negotiator may not have ultimate decision making authority and it is worth requesting a meeting with senior management if you are not getting anywhere with the initial representative.

35. When the payer will not negotiate
The decision to go out of network:
How much does that payer account for in the practice’s total book of business?
Will the payer write checks to the patient rather than the practice?
How many of your patients will you lose if you have to collect directly from the patient rather than billing the payer?
How much additional administrative cost will you incur on pre-authorizations and collections?
How much of an increase would you need to make it worth your while to stay?

36. Contracts’ Language CYC (Cover Your Contracts)
We recommend having all agreements reviewed by legal counsel. Hereare a few terms to watch for:
Term, Termination w/o Cause & Termination for Breach General / Fee schedule Amendment - you want minimal notification requirements for termination that are untethered to the anniversary date of your agreement, or annual.
Timely filing– make sure you have enough time to process secondary insurance claims.
Timely payment– make sure that you receive payment within 30 days of receipt of a clean claim.
“Lesser of Billed Charges” Language. Make sure your chargemaster is set high enough to avoid this.
Notification requirements – make sure the payer has to provide sufficient notification for changes, administrative amendments to the contract, including fee schedule maintenance changes.
Retrospective review Language: make sure that there is a reasonable time, <90 days, if possible, for retrospective claims reviews for the payer to collect from you.

37. “CYC” continued…
Silent PPO’s
No “favored nation” language (i.e., you get a decrease if your best contract is lower than this payer’s overall contracted rate
Check rates across product lines and map the product lines to your patients
Multiple PPOs, HMO, Medicare Advantage etc.
Carved out codes
Calibration to current year Medicare %, watch out!
Excluded services
Multiple procedures and bundling

38. Sales Accountable Care:
If you have significantly robust IT capacity and/or are active in a virtual network of coordinated care providers, you may want to float the idea of participation
Consult Legal Counsel before signing on

39. Sales Employer Groups (Who are a part of a payer’s plan):
Make direct contact with the HR department to see if you can reach out to employees.
Be creative, e.g., offer to contribute health news to the company newsletter/bulletin.
Offer to attend / help with health fairs or workplace wellness programs / policies
Employer Groups (Who are self insured, “ASOs”)
Reach out to these large groups for participation

40. Before you negotiate, do your homework!
Critical Success Factors
AnalySis
SolUtions
ProCess
ObjeCtives
Avoid PotEntial Landmines
ContractS’ Language (CYC)
Sales
Before you negotiate, do your homework!

41. Summary
We covered how to determine which payers to negotiate with, if your practice will benefit from engaging in negotiation with the payer and tips on how to navigate the process to successfully complete a negotiation.
Thank you for inviting us to be your tour guide and we wish you Succe$$.

42. Homework
View RevolutionSoftware™ Demonstration.
AND enroll to get your no charge four month license.
For instructions on how to register for RevolutionSoftware and to view the demo, please visit RevolutionCentral at:
Use Password: class2015

43. If you have questions… RevolutionSoftware Registration and Questions™
Regina Vasquez, Sr. VP of Accounts – Healthcents, Inc.
Tel: (719)
Class Help: or
Healthcents Inc. Headquarters:
Susan Charkin, President, Steve Selbst, CEO, Healthcents, Inc.
Tel: (800) or