| Cutting out the managed care middleman
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| | administrative tasks. Managed care
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| and contracting directly with medical
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| | companies have failed to contain employer
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| providers may seem like a drastic
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| | medical cost increases, despite all their
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| solution for reducing health plan costs.
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| | so-called network management efforts.
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| Yet for employers who've been whipsawed
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| | Ironically, and coincidentally, managed
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| by relentless cost increases, it may be
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| | care industry profits are at an all-time
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| the only solution that actually works.
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| | high while employers continue to
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| The profit-bloated managed care industry,
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| | suffer.Myth 5: Direct contracting
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| with much to lose, has propagated many
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| | exposes employers to greater liability.
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| myths about why this sensible approach
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| | The truth is direct contracting poses no
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| won't work. But their solutions haven't
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| | greater risk of litigation than any other
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| worked. Costs continue to surge and
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| | benefit program component and may
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| employers are desperately seeking relief.
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| | actually offer greater protection against
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| It's time to debunk the myths about
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| | it. Direct contracting is intended only
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| direct provider contracting and shed some
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| | for self-insured employers whose plans
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| light on this highly effective,
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| | are governed by ERISA, which offers
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| innovative cost-containment strategy.Myth
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| | built-in protection against liability.
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| 1: Employers cannot negotiate as good a
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| | ERISA preempts state tort laws and limits
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| deal with medical providers as can
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| | the employee's ability to hold an ERISA
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| managed care companies. The truth is
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| | plan liable for malpractice under state
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| employers can often negotiate just as
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| | laws, which govern malpractice, not
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| good a deal, or better. Providers
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| | ERISA. Because direct provider
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| welcome direct agreements for the very
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| | agreements state the employer is not
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| reason that they are not like
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| | providing/directing medical care and has
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| conventional managed care contracts.
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| | no role whatsoever in any medical
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| Physicians have complained for years
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| | decision, the protection offered by
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| about adversarial agreements and poor
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| | ERISA's preemption is safely
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| reimbursements forced upon them by HMOs
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| | maintained.Myth 6: Managed care
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| and PPOs. This negative perception has
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| | companies can't (or won't) process claims
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| created a strong willingness among
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| | for direct networks.
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| medical providers to do business directly
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| | The truth is that processing claims and
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| with employers. These "win-win"
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| | administering benefits for employer-owned
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| agreements ultimately save employers
| |
| | provider networks are well within the
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| money without shortchanging the
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| | technical capabilities of managed care
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| providers. Unlike managed care
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| | companies. Their feigned inability to
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| companies, direct agreements disclose all
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| | process direct network claims is one of
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| contractual details so both employer and
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| | many ways that managed care companies
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| provider know the deal they're getting
| |
| | hold their employer-clients hostage in
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| and nothing can be hidden by a
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| | networks that are owned, leased, or
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| middleman's "cut."Myth 2: You need large
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| | arranged by the managed care companies
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| numbers of employees to negotiate direct
| |
| | themselves. If an existing managed care
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| provider contracts. The truth is
| |
| | company cannot or will not administer
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| physicians and hospitals will often
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| | direct network claims, there are plenty
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| contract with employers for limited
| |
| | of third party administrators (TPAs) than
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| numbers of employees. When a direct
| |
| | can handle it, usually at a lower cost
|
| agreement is fair and reimbursement terms
| |
| | per employee. For employers that want
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| are reasonable, providers quickly realize
| |
| | direct networks in select locations (but
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| it's a smart business decision to work
| |
| | want to keep commercial networks
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| with employers in their own community. A
| |
| | elsewhere), using a TPA is a convenient
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| local employer, regardless of size,
| |
| | and cost-effective way to get the job
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| represents an established group of
| |
| | done.Myth 7: Managed care companies do a
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| existing lives as prospective patients,
| |
| | better job containing costs and saving
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| ready to use the direct network
| |
| | employers money. If that was true,
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| providers. Direct networks have been
| |
| | employer medical plan costs would be
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| successfully developed in areas where the
| |
| | falling instead of rising. The truth is
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| employer had as few as 30 employees.Myth
| |
| | employers who have implemented direct
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| 3: Direct contracting won't work in
| |
| | provider contracting are experiencing
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| areas where other PPO networks are
| |
| | lower costs and higher savings. One
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| available. The truth is doctors are sick
| |
| | national employer with 20,000 employees
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| of disadvantageous agreements and
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| | has used direct networks to keep their
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| miserable reimbursements forced upon them
| |
| | health plan cost trend flat for the past
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| by managed care companies. They actually
| |
| | five years. Another major employer
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| welcome the opportunity to contract
| |
| | reduced its health plan costs by more
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| directly with employers. For many
| |
| | than 20% without reducing benefits or
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| doctors, the very fact it's an agreement
| |
| | shifting costs to employees.Bottom Line:
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| with the employer, and not a managed care
| |
| | Cutting out the managed care middleman
|
| company, is reason enough to participate
| |
| | and contracting directly with medical
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| in a direct network. A direct agreement
| |
| | providers can help savvy employers reduce
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| establishes a true business relationship
| |
| | benefit costs and regain control over
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| between provider and employer, one that
| |
| | their corporate health care plans.Howard
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| promises the provider quicker
| |
| | "A.J." Lester is president of A.J. Lester
|
| reimbursements, better benefit payment
| |
| | & Associates, Inc, a leading employee
|
| levels, and easier access to the ultimate
| |
| | benefits consulting firm based in
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| payer (the employer). It's also a
| |
| | Houston, TX that helps major employers
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| gesture of good community relations for
| |
| | reduce health plan costs by developing
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| any physician, medical group, or hospital
| |
| | directly contracted medical provider
|
| to demonstrate.Myth 4: Direct networks
| |
| | networks as an alternative to commercial
|
| create more administrative burdens and
| |
| | PPOs. Since 1994, A.J. Lester has
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| higher costs. The truth is once direct
| |
| | developed direct provider networks for
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| networks are developed, the advantages of
| |
| | well-known national employers across 35
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| "owning" a network quickly outweigh
| |
| | states, negotiating agreements with
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| "leasing" one from a managed care
| |
| | nearly 80,000 physicians and over 800
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| company. There are no recurring network
| |
| | hospitals on behalf of clients. A.J.
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| access fees; less physician attrition;
| |
| | Lester & Associates has helped its
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| fewer employee complaints; simpler
| |
| | clients save tens of millions of dollars
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| self-renewing contracts; better provider
| |
| | on their health benefit programs.Read the
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| relationships; straightforward plan
| |
| | Case Studies of employers who have
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| design features; and the ability to
| |
| | reduced costs through direct provider
|
| choose the best contractors for
| |
| | contracting.To help employers understand
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| utilization review, case management,
| |
| | direct contracting as a cost-reducing
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| claims processing, and other
| |
| | strategy, A.J.
|
