A friendly managed care plan — what doctor doesn’t dream of finding one? Unfortunately, a totally friendly plan may be too much to hope for, given the combative nature of contract negotiation and reimbursement, and the frantic pace of healthcare mergers and acquisitions during the past 2 years. But "reduced-hassle" plans definitely exist. The key to finding them lies in knowing what to look for.

Here, I’ll present some guidelines that you can use to assess health plans and other third-party payers, and their provider agreements. If not exactly physician-friendly in the ideal sense, payers that address all or some of the following issues generally have a realistic understanding of the difficulties placed upon physicians working in a managed care environment, and are willing to work to make the system better.

You’d be amazed at how many physicians tell me they’ve signed managed care contracts without fully understanding what was in the documents, and without negotiating on any of the terms and conditions.

When I ask why, a typical response goes something like this: "They said the contract was their ‘standard agreement’ and that it was non-negotiable — I could take it or leave it. I need access to patients, so I took it."

In any managed care contract negotiation, compromise — by both parties — is an integral part of the process. If a payer presents you with a standard contract and says you can take it or leave it — it’s best to leave it because they’re not negotiating with you, they’re giving you an ultimatum.

Under the real or perceived pressures of the moment, you might think that you must have a relationship with that payer, regardless of its oppressive dictates, in order to keep yourself in the managed care game and keep your competition out. But that’s a fallacy. A bad contract (especially one from an unfriendly payer) brings complex and compounding problems. In the end, it will cost you more than you can possibly imagine.

To avoid finding yourself under the thumb of an unfriendly payer, I urge you to take these three simple premises to heart:

• A bad contract is a bad contract.
• Bad contracts rarely get significantly better with time.
• No contract is better than a bad contract.

Let’s look at some specific protocols and policies that can tell you a lot about a payer’s character and your prospects for a long-term, successful relationship.

• Referrals.
Most ophthalmic cases will come to you by referral because managed care plan members usually aren’t allowed direct access to specialists. Obviously, you have to know whether the referrals are appropriate, timely and accurate.
A physician-friendly plan will provide you with information that clearly outlines referral protocols and requirements, such as having an authorization number written on an approved form signed by the primary care physician (PCP). These protocols and requirements are based, in part, on input from both PCPs and specialists.
Physician friendly plans are also sensitive to the problems specialists encounter when referrals are incorrectly generated or when patients present without a referral. So, look to find a mechanism in place to minimize the number and magnitude of such problems.
Unfriendly plans either won’t provide you with any documents or they’ll provide non-specific documents that leave the collateral damage resulting from any referral-related problems squarely in your lap. Administrators of these plans are likely to dance around critical referral issues and avoid taking responsibility for problems they create. Steer clear of payers who demonstrate a callous disregard for referral problems.
• Eligibility verification.
The problem with eligibility verification is that you depend on the accuracy of the payer’s data for reimbursement. If it’s flawed or delayed, you could be left at risk for the financial loss if you provide services to patients who later turn out to be ineligible.
Physician-friendly plans accept a measure of responsibility for the accuracy and timely delivery of eligibility data on their enrollees. Although they also depend on others, such as employers or the federal government, for the accuracy of the data they supply to you, friendly payers will usually work with you when a legitimate financial responsibility issue results from eligibility data errors.
For example, a friendly plan might guarantee payment at a negotiated rate for services you’ve rendered in good faith to members whom you’ve presumed were eligible (but in fact, were not), as long as you’ve provided the services based on the most recent eligibility data available to you, and your staff has followed all eligibility verification protocols to the letter.
A physician-friendly plan might also be willing to act as an intermediary among you, the patient and the employer to broker a financial settlement (particularly if the employer has failed to provide the health plan with a timely data update on its employees). Keep in mind, however, that unless these arrangements are spelled out in the contract, they’re not the payer’s legal responsibility.
An unfriendly plan won’t be willing to accept any responsibility for the collateral damage created by inaccurate eligibility data. It’ll probably tell you to pursue the patient for collection. "The patient knew she wasn’t eligible and presented under false pretenses. She’s responsible for paying your bill, not us. Besides, the employer group (or federal government) is ultimately responsible for the accuracy of our eligibility data." With that said, the plan washes its hands of any responsibility.
• Claims payment.
There’s plenty of news about payers being months behind in claims payments or leaving doctors holding unreasonable, sometimes uncollectible receivables.
A friendly payer will negotiate firm and specific payment due dates. Some may even surprise you and agree to penalties for late payment. The provider agreement will include specific language such as, "Claims postmarked by the last day of any month will be processed and payments mailed to provider by the 25th of the following month." This arrangement is clear to all; it’s fair and it’s tight.
Unfriendly plans, on the other hand, will use all sorts of contractual trickery to delay your payments. You might see language such as, "Health plan will use its best efforts to pay all claims by the 10th of the month." What does "use its best efforts" mean? How will you be able to prove that the payer is not using its best efforts?
Another ploy practiced by unsavory payers goes something like this, "Claims processed by the end of the month will be paid by the 10th of the following month." This might seem perfectly agreeable at first glance, but read it again. The way this is worded, the plan could let your claims sit on a desk and remain unprocessed until the calendar clicks over to another month — and you’d be powerless to do anything about it. Make sure the provider agreements you sign don’t give the payers unrestricted freedom to manipulate your revenue streams.
• Utilization limits (ceilings).
A friendly plan will provide you with accurate utilization data and be willing to negotiate capitation rates, particularly if there’s a fundamental change in utilization mid-contract. For example, to improve its Health Plan Employer Data and Information Set (HEDIS) scores, a payer might initiate a big push to identify diabetics and encourage them to visit the eye doctor by refunding their co-payments. If you’re getting paid by capitation, the artificial spike in utilization and office visits will adversely affect your bottom line. A friendly plan will adjust your capitation to reflect the changes in utilization.
Unfriendly payers have no honor or conscience when it comes to putting providers at unreasonable and untenable risk. They’ll typically tell you that you’re responsible for providing all necessary care, including any that you must out-source.
The problem for solo or small group physicians under capitation is that they usually don’t receive enough compensation to pay for their own services — let alone sub-contracted services. As a result, in order to minimize payments to outside providers and to survive within the aggressive budgetary constraints created by the plan, some doctors may be tempted to take on certain cases that really should be sent out. I don’t like to think that any physician would consider this action, but under pressure, particularly from unfriendly plans, it happens.
Unfriendly plans will also be uncooperative when it comes to providing historical cost and utilization data to prepare your capitated bids or to analyze their proposed cap rates. And even if they provide some data, unfriendly plans will refuse to share any risk with physicians by creating "risk windows" or "risk corridors," which allow retrospective reconciliations if actual utilization bears no resemblance to the plan’s initial data.

You may believe that finding a physician-friendly plan is wishful thinking; that payers simply won’t negotiate and don’t care about physicians.

While this is true of some plans, others are responding to the public and legislative outcry for managed care reform that’s sweeping the nation. These plans will negotiate with you. Of course, they’ll try to cut the best deal possible to protect their interests — but friendly plans are smart enough to find a workable, mutually beneficial compromise. Although even the friendliest plans present challenges, you can at least strike some gold when you find one that works for you.