Cutting Out Managed Care Middleman Cuts Health Plan Costs

From cutting the intermediary and managed care contracting directly with medical providers may seem like a drastic solution to reduce cost health plan. However, for employers who has been tireless whipsawed by increases in costs, it may be the only solution that really works. The profit-bloated managed care industry, with much to lose, it has spread many myths about why this sensible approach will not work. But their solutions have not worked. The costs are still vague and employers are desperately seeking relief. A.J. Lester & Associates, Inc. Has razkrinkati the myths about the direct contractors, shedding much needed light on this ingenious and innovative cost-containment strategy.
Myth 1: Employers can not negotiate the best deal with medical providers may as managed care companies. The truth is employers can often negotiate an agreement as good or better. Providers welcome direct agreements for the very reason that they are not as conventional managed care contracts. Doctors have complained for years about agreements contradictory and poor reimbursements to them by HMOs and PPOs. This negative perception created a strong desire among medical providers to do business directly with employers. These " win-win agreements " employers ultimately save money without shortchanging the suppliers. Unlike managed care companies, direct agreements disclose all the details contractual thus both employer and provider of knowledge deal they are getting and nothing can be hidden by an agent of " cut ".
Myth 2: We need a large number of workers to negotiate contracts direct supplier. The truth is that doctors and hospitals often contract with employers for a limited number of employees. When a direct agreement is fair and repayment terms are reasonable, providers quickly realize it & 39; sa smart business decision to work with employers in their own community. A local employer, regardless of size, represents a group of life existing as potential patients, ready to use the network of direct suppliers. Direct networks have been developed successfully in areas where the employer had as few as 30 employees.
Myth 3: Direct recruitment will not work in areas where other PPO networks are available. The truth is that doctors have to disadvantage patients agreements and miserable managed care reimbursements to them by companies. They really welcome the opportunity to engage directly with employers. For many doctors, the very reality is an agreement with the employer, and not a managed care company, is a sufficient reason to join a network directly. A direct agreement establishing a real business relationship between supplier and employer, which promises a provider reimbursements faster, better benefit payment levels, as well as easier access to the last payment (the employer). It is also a gesture of good community relations for any physician, medical group or hospital to demonstrate.
Myth 4: Direct networks create more administrative burdens and higher costs. The truth is once direct networks are developed, the advantages of " " have a network quickly outweigh " leasing " one of a company managed care. There are no recurring fees for access to the network; doctor less friction, less employee complaints; simple self-renew contracts; best provider relationships; simple plan design features, and ability to choose the best contractors for utilization review, case management, claims processing, and other administrative tasks. Managed care companies failed to contain employer medical cost increases, in spite of all their network management of the so-called efforts. Ironically, coincidentally, managed care industry profits are in a moment of high, as all employers still suffer.
Myth 5: Direct hiring exposes employers to greater responsibility. The truth is that direct contracting represents no greater risk of litigation than any other benefit program component and may actually offer greater protection against him. Contracting directly is intended only for self-insured employers whose plans are governed by ERISA, which offers protection against the built-in accountability. ERISA preempts state civil laws and limits the ability of the employee to perform a plan ERISA liable for negligence under state laws that govern malpractice, not ERISA. Because direct state agreements, the employer is not providing / directing medical care and has no role in any medical decision, protection afforded by ERISA preemption is safe maintained.
Myth 6: Managed care companies can not (or not) process Direct Credits for networks. The truth is that the processing claims and administering benefits for employer-owned provider networks are well within the technical capability of the companies managed care. Fake its inability to process claims direct network is one of many ways that companies managed care hold their employer-customers hostage in networks that are owned, leased or managed care organised by the companies themselves. If a company existing managed care can not or do not want to administer direct network claims, there are numerous third Administrators (TPAs) that can deal with it, usually at a lower cost per employee. For employers who want to direct networks in selected locations (but want to maintain business networks elsewhere) using a TPA is a convenient and cost effective way to get the job done.
Myth 7: Managed care companies do a better job containing costs and saving Employers money. If that was true, employer medical plan costs would fall instead of rise. The truth is that employers who have implemented direct contractors are experiencing lower costs and greater savings. A national employer with 20000 workers have used direct networks to keep their health plan cost trend flat for the past five years. Another major employer reduced their health plan costs by more than 20%, without reducing the benefits or costs of relocation of workers. Bottom Line: Cutting the managed care intermediary and contracting directly with medical providers can help employers reduce galloping costs and benefits regain control over their health corporate plans.
About the Author Howard " AJ " Lester is president of AJ Lester & Associates, Inc., a leading employee benefits consulting firm based in Houston, TX that helps large employers reduce costs by developing health plan directly contracted medical provider networks as an alternative to commercial PPOs. Since 1994, A.J. Lester has developed direct networks of well-known national employers in all 35 states, negotiate agreements with about 80000 physicians and more than 800 hospitals on behalf of clients. A.J. Lester & Associates has helped its customers save tens of millions of dollars on their health benefit programs.
Read the Case Studies of employers that have reduced costs through direct provider contracting.
To help employers understand recruited directly as a strategy of cost reduction, AJ Lester & Associates publishes a White Paper on everything you always wanted to know about direct contracting. glenna ricky



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