Physicians Need New Approach to Managed Care Contracts

Geilfuss is hearing more complaints from smaller providers who feel they are being squeezed by vague definitions of medical necessity, or no definition at all, in their contracts.

"I think it's important to have a definition, not just to say it is determined by the payer," he says. "Try to get as many objective criteria into the definition as you possibly can so it is not a subjective decision. A lot of providers think the payer uses that lack of definition as a way to avoid paying, when the ­treatment is common in their community."

Volume not primary goal any longer
Changes in healthcare are prompting providers to move away from the strategy of recent years in which physicians sought to maximize volume in order to compensate for meager reimbursement rates, says ­Taylor Moorehead, a partner in billing operations with healthcare billing consultants Zotec Partners and also their corporate compliance officer. Rates may have been low, but until recent years the process was relatively straightforward.

Not so much anymore, he says. Increasingly, managed care companies are requiring more of providers before approving payment, and some of the data collection provisions in healthcare reform will increase that burden further, he says.