Payer Contracts

Lena J. Weiner, October 1, 2016

HealthLeaders Media Council members discuss their organizations' experience with risked-based payer contracts.

This article first appeared in the October 2016 issue of HealthLeaders magazine.

 

Brian S. Bizub
Chief Executive Officer
Palm Beach Orthopaedic Institute
Palm Beach Gardens, Florida

Brian S. Bizub
Brian S. Bizub

We don't have a risk contract at the current time. Our contracts are based upon negotiated contracts with each insurance payer, but we are in a comanagement agreement with our hospital that involves a gainsharing model for total joints and fractures.

There are benefits and downsides of the comanagement agreement; the downside is that the hospital takes more of a control position in the negotiations, and controls the payment. The pros to it would be that the physicians and hospitals work together collaboratively in ensuring that quality of care is not jeopardized, nor are the outcomes based upon reducing cost.

I think both insurance payers and providers are interested in sharing risk. They believe that's a fair model, versus being at the mercy of a payer, who may decide that an arbitrary amount is what they are going to pay based on the Medicare fee schedule. Risk-based contracts give providers an opportunity to show that they are responsible for taking care of patients, making sure their costs are low, and not overutilizing the system. In the past, it felt like reimbursement was based solely on DRG or ICD-10 codes, and that was the extent of it. From a monetary standpoint, gainsharing would be advantageous for both sides.

Lena J. Weiner

Lena J. Weiner is an associate editor at HealthLeaders Media.

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