Physicians Need New Approach to Managed Care Contracts

This article appears in the July 2012 issue of Managed Care Contracting and Reimbursement Advisor

With all the changes in the healthcare industry, physician practices may need to reassess how they evaluate managed care contracts and reimbursement strategies, say some experts. What worked in past years may not be your best approach for the future.

The changing face of healthcare is resulting in more creative interaction between payers and providers, says C. Frederick Geilfuss II, JD, a partner with the law firm of Foley & Lardner, LLP, in Milwaukee. There is more talk about narrow networks, risk sharing, and ­information sharing, he says.

"That is somewhat unusual and I think it's attributable to the focus on accountable care," he says. "Some of the bigger systems are saying to providers that they should put together a narrow network product and take some of the risk on it, then they can go out to targeted audiences with the narrow network."

Smaller physician practices may not be a part of those narrow networks, Geilfuss says. That could have a detrimental effect on acquiring optimal managed care contracts.

"Physicians not in these networks may see some steerage in some programs or networks against them. You could lose out on some business," Geilfuss says. "The bigger systems are doing these networks, so if you get wind that these are coming together, you may want to be connected in some fashion so that you can be a player in that network."