Take a business approach to your managed care contracting strategy

Whether negotiated payment arrangements represent a small or large portion of your net patient revenues, contracting changes that are occurring on a macro scale may significantly affect your healthcare organization this year and next, says Christopher J. Kalkhof, FACHE, director of the Healthcare Industry Group, LLC, at Alvarez & Marsal in New York City. With federal and state governments partnering with managed care organizations (MCO) in programs, such as Medicare Advantage, managed Medicaid, Child Health Plus, and more than a dozen states considering universal healthcare coverage initiatives, many healthcare organizations will see their payer mixes evolve to the point where 80% or more of net patient revenues will be based on negotiated payments.

By identifying the critical elements of your contracts and developing a contracting strategy that’s aligned with your business plan, your organization can manage the impact of managed care contracts on your bottom line, Kalkhof says, provided you ask the right questions.