Under healthcare reform, both payers and providers face significant pressure to reduce costs and ensure patients receive quality care. Rather than uphold antagonistic relations, progressive physicians and insurers have begun to work together to achieve this goal. Four gastroenterologists describe how GI physicians can create a working relationship between payers and endoscopy centers.
Question: How would you define the ideal endoscopy center-payer partnership?
Maxwell Chait, MD, FACP, FACG, FASGE, AGAF, ColumbiaDoctors Medical Group (Hartsdale, N.Y.): Creating a positive relationship with payers is highly beneficial to develop constructive, meaningful interactions and is highly important in today's reimbursement climate. The ideal relationship is where one can develop win-win strategies for both to derive high patient satisfaction with high quality procedures at reasonable cost.
Michael Lustberg, MD, Digestive Health Consultants, Santa Rosa (Calif.) Memorial, St. Joseph Health: The ideal payer and DOS relationship would be one that
values quality of care; such as adenoma detection rate, cecal intubation rate and other quality measures – and reimburses accordingly. It would also ideally be one that looks at the local market and responds to demand and available supply for services.
Manoj K. Mehta, MD, AGAF, Gastroenterology Consultants of the North Shore (Kenilworth, Ill.), NorthShore University, University of Chicago/Pritzker School of Medicine: The ideal relationship is one that recognizes the value of working together. Patients need endoscopic procedures, for example. The payers are obligated to cover the costs. Quality standards and outcomes must be goal-oriented and emphasized by all parties. But, we all realize that cost containment is a central issue in the evolution of appropriate care. For too long, each party has had their own best interests in mind. When the providers and together, however, we can achieve the balance that ultimately will lead to high quality, appropriate and cost-efficient care.
Christopher J. Vesy, MD, Member, AGA Institute Practice Management & Economics Committee, Managing Partner, Dallas Endoscopy Center: Bundled payments. Endoscopy centers (the physician or corporate owned) can then control costs for the payers by contracting with themselves (staff ASC physicians) for professional services, anesthesia services as necessary, pathology services as necessary and the ASC facility itself, plus any management fee. Payers and patients will not be hit with four separate bills for one service. Neither will they have any possible surprise out-of-network expenses. We already have experience with this model from research studies.
Unfortunately, most payers are not ready to proceed with bundled payments as their software doesn't have the ability to assure non-duplication of payments to the professional, anesthesia or pathology services that would be covered by the overall endoscopy center fee in a bundled payment. We should see this glitch in software change soon and those ASCs ready for bundled payments will have an upper hand in the future.
The American Gastroenterological Association has developed a bundled payment framework for colonoscopy performed for colorectal cancer screening or surveillance. It can be a starting point for GI practices to develop episode bundles for other cognitive and procedural service lines. The AGA working group specifically did not develop a recommended payment for a colonoscopy bundle; rather the goal of the project was to provide physicians with a framework that they can use when negotiating with their local entities. More information about the bundled payment framework for colonoscopy performed for colorectal cancer screening or surveillance is available here.
Q: What are the biggest obstacles endoscopy centers must overcome to begin creating a constructive relationship with payers?
MC: A payer has a network group that includes the payer contract negotiators, network managers and the provider relations representatives. Be prepared to discuss several topics, including the cost of care, case mix, payer mix, quality and safety of your facility and your accreditation. The payer should tell you what they will cover and how those services apply to your EC. The cost of care will be most important to the payer. The EC should try to develop a reputation for being thorough and strategic to gain the respect of payers. Demonstrate a strong business case for the rates proposed. The EC should bring viable data and statistics to negotiations to prove why it deserves certain terms. Often the ECs' poor relationship with payers is due to a lack of communication and transparency.
ML: The greatest obstacles that centers and payers must overcome together are related to breaking out of traditional models of reimbursement care. This takes time and effort on behalf of both parties.
MM: I certainly wouldn't say that hospital systems, government payers or private payers were somehow working against us, but there has been an unexplainable interest in driving business to the large organization-based health care systems. This, despite a quantum leap of success of ASCs in terms of efficiency, cost containment, access and patient satisfaction. It seems there needs to be a shift in the culture of thinking whereby the ASC is seen as a partner and not an enemy. This involves breaking down the existing relationships between corporate healthcare providers, the insurance industry and the government payers. We won't wine, dine and junket them, but we can emphasize the value ASCs hold overall. This includes making the benefits known to the patients. They are the end consumers and are an invaluable ally in creating this cultural shift.
CV: Business is a person-to-person interaction. It is very important to know your payers as people doing an important job. Access to your representatives at the payer level can be difficult and those representatives may leave their position or have changed responsibilities. The best way to continue to negotiate well with your payer is to know the proper people making decisions and the biggest obstacle to creating a constructive relationship is maintaining that person-to-person relationship.
Q: What ideas are innovative endoscopy centers bringing to payers to help develop a mutually beneficial partnership?
MC: There are many ECs that maintain a preferred status with payers. An EC that is considered preferred often means that the EC has accepted lower rates and the payer will direct volume to that EC before recommending EC's with higher rates. A desire to compromise will foster a valuable relationship. Showing how the payers save money will bolster relations and build trust and allow fair contracts that payers and EC's will accept. Contract relationship that reduces the cost of doing business and improves the payer's return on investment will obviously maintain a positive relationship. The EC can save payers money and benefit the EC by reducing denials and claims rework and making sure par providers will work with the EC. The EC should look for ways to control costs to show payers they are well run by offering lower costs to commercial payers while maintaining quality and an acceptable profit margin. ECs should consider developing contracts and partnerships with payers and that are positive for the EC and the payer rather than looking for a one-sided solution. The EC should approach contract negotiations with a reasonable position.
ML: Innovative ideas are changing the relationship between centers and payers. Some centers are offering their patients reimbursement for quality of care as well as performance of services. Centers are also working to achieve higher colorectal cancer screening rates among patients in their areas, as well as focusing on cost-reduction and implementing DRG-like models.
MM: All payers should be influenced by the bottom line, provided quality and patient satisfaction remain constant. We've long been able to demonstrate that we can undercut the fees of hospital-based services by providing the same services at an ASC. What more do the payers want? Progressive thinkers in that industry will see the value of negotiated rates for specific services. If an ASC can guarantee a specific volume of work to be done at a lower cost, it is in the interest of the payer to drive its clientele to that location.
Likewise, even the hospital based systems should see the value of partnering with ASCs to handle some of the volume of their outpatient work. They are obligated to provide these services, but they cannot efficiently be done in the logistical quagmire of a hospital outpatient setting.
CV: I have already encouraged bundled payments. Another contracting idea is to work on three or five year contracts so that neither the ASC nor the payer has to worry about their future
relationships. Offering modest yearly increases of 1 percent to 3 percent on contracts is both good business for the ASC and payer — and achievable when working with representatives who know and trust you.
Q: From the payer perspective, what can endoscopy centers do to demonstrate value?
MC: The endoscopy center must earn respect from a commercial payer prior to contract negotiations by good preparation. This may even mean working with a full-service billing company rather than managing your own negotiations. The third party billing company can collect your EC claims history, including in- and out-of-network data, to provide to the payer and ensure accuracy. Also, the billing company may have worked with commercial payer before and have established ties with the contracting departments of commercial payers that can provide a significant advantage over the EC facility director who might be less experienced in the payer contracting process.
ML: Endoscopy centers need to know their strengths and the market within which they are competing. They can make the cost of performing procedures transparent, implement various value measures, improve colorectal cancer screening rates, evaluate the cost of performing global care related to colorectal cancer screening services and adopt preventative strategies for colon cancer.
CV: Document quality. For instance, get AAAHC certification and maintain professional society certifications. Publish quality indicators on your website and in your pamphlet. Make your quality indicators are a part of your contracts. For instance, if you are a GI ASC, assure adenoma detection rate is above national standard by greater than 10 percent, or demonstrate adherence to follow-up procedure guidelines. Research and participate in data registries, such as the AGA Digestive Health Recognition Program™. Registries are often qualified by CMS and allow clinicians to demonstrate and be recognized for superior quality of care in the treatment of many disorders, including colorectal cancer screening and surveillance, among others. Payers and patients understand quality and will reward it.
Q: What are a few of the best strategies for negotiating new contracts with payers?
MC: The EC should always approach payer relationships and reimbursement rates realistically for reasonable prices for services. With realistic expectations the EC can foster a positive relationship with payers rather than a combative one. Of course one must try to get the most reimbursement, but you also need to stay within reason of the demand. In trying to correct a bad contract, the best approach is to sit down with the payer to discuss what you need. The rate may not be the best thing to attack. Other terms of the contract and carve-outs may be the key to successful contract negotiations.
ML: The best strategies for negotiating with payers include knowing your strengths and your particular market area. Knowing your competition, demographic, cost-of-living, cost of providing service and market for facility fees within your region helps a center charge appropriate prices. Knowing what services that you provide that are unique within your geographic area also adds value to your services.
CV: Payers want to know they are receiving quality at a fair price. It's value. Show them that their clients (your patients) are having procedures performed in the ASC setting rather than a more expensive alternative, and then map out that cost savings to them on a spreadsheet. This negotiation is part of your person-to-person business relationship. Make sure that even if you have a five-year contract on hand, meet with your payer representatives at least yearly and supply them with this cost savings documentation.
Q: As health care continues to change, how do you think the relationship between payers and endoscopy centers will evolve?
ML: As the healthcare landscape continues to evolve, there is likely to be a greater focus on the global cost of endoscopy services. There will be increased emphasis on cost-reduction and quality measures related to endoscopy. Reimbursement should be increasingly focused on dedicating a share of savings for both cost-reduction and quality measures met that are mutually agreeable.
MM: It is clear that partnerships between health care payors, hospital-based providers, and free-standing ASC’s are in everyone’s best interests. The most well-served in these types of relationships are the patients, actually. We have the real opportunity here to make access easier, provide higher overall satisfaction, and even reduce costs. Despite the cultural shifts that need to occur before these partnerships take foot, they will come eventually. The driving influence of monetary constraints in the current healthcare environment is simply too strong to ignore. Those institutions that resist these changes will be left behind—in the business world, heads roll when money is lost.
CV: I am anxious about narrow networks. I think they are the biggest short-term threat to ASCs. Data reporting measures are often used as an excuse for excluding ASCs that are not owned by the narrow network. These software issues may be overcome. However, payers understand that quality and cost (value) should outweigh any attempt to exclude some or most ASCs for the purpose of monopolizing patients. I am reassured that payers will not allow narrow networks to exclude the value offered by ASCs in the long-term.
More articles on gastroenterology:
Defining the ideal GI physician partner
9 gastroenterologists in the news
3 GI/endoscopy devices receive FDA 510(k) clearance in August
Question: How would you define the ideal endoscopy center-payer partnership?
Maxwell Chait, MD, FACP, FACG, FASGE, AGAF, ColumbiaDoctors Medical Group (Hartsdale, N.Y.): Creating a positive relationship with payers is highly beneficial to develop constructive, meaningful interactions and is highly important in today's reimbursement climate. The ideal relationship is where one can develop win-win strategies for both to derive high patient satisfaction with high quality procedures at reasonable cost.Michael Lustberg, MD, Digestive Health Consultants, Santa Rosa (Calif.) Memorial, St. Joseph Health: The ideal payer and DOS relationship would be one that
values quality of care; such as adenoma detection rate, cecal intubation rate and other quality measures – and reimburses accordingly. It would also ideally be one that looks at the local market and responds to demand and available supply for services.Manoj K. Mehta, MD, AGAF, Gastroenterology Consultants of the North Shore (Kenilworth, Ill.), NorthShore University, University of Chicago/Pritzker School of Medicine: The ideal relationship is one that recognizes the value of working together. Patients need endoscopic procedures, for example. The payers are obligated to cover the costs. Quality standards and outcomes must be goal-oriented and emphasized by all parties. But, we all realize that cost containment is a central issue in the evolution of appropriate care. For too long, each party has had their own best interests in mind. When the providers and together, however, we can achieve the balance that ultimately will lead to high quality, appropriate and cost-efficient care.
Christopher J. Vesy, MD, Member, AGA Institute Practice Management & Economics Committee, Managing Partner, Dallas Endoscopy Center: Bundled payments. Endoscopy centers (the physician or corporate owned) can then control costs for the payers by contracting with themselves (staff ASC physicians) for professional services, anesthesia services as necessary, pathology services as necessary and the ASC facility itself, plus any management fee. Payers and patients will not be hit with four separate bills for one service. Neither will they have any possible surprise out-of-network expenses. We already have experience with this model from research studies.
Unfortunately, most payers are not ready to proceed with bundled payments as their software doesn't have the ability to assure non-duplication of payments to the professional, anesthesia or pathology services that would be covered by the overall endoscopy center fee in a bundled payment. We should see this glitch in software change soon and those ASCs ready for bundled payments will have an upper hand in the future.
The American Gastroenterological Association has developed a bundled payment framework for colonoscopy performed for colorectal cancer screening or surveillance. It can be a starting point for GI practices to develop episode bundles for other cognitive and procedural service lines. The AGA working group specifically did not develop a recommended payment for a colonoscopy bundle; rather the goal of the project was to provide physicians with a framework that they can use when negotiating with their local entities. More information about the bundled payment framework for colonoscopy performed for colorectal cancer screening or surveillance is available here.
Q: What are the biggest obstacles endoscopy centers must overcome to begin creating a constructive relationship with payers?
MC: A payer has a network group that includes the payer contract negotiators, network managers and the provider relations representatives. Be prepared to discuss several topics, including the cost of care, case mix, payer mix, quality and safety of your facility and your accreditation. The payer should tell you what they will cover and how those services apply to your EC. The cost of care will be most important to the payer. The EC should try to develop a reputation for being thorough and strategic to gain the respect of payers. Demonstrate a strong business case for the rates proposed. The EC should bring viable data and statistics to negotiations to prove why it deserves certain terms. Often the ECs' poor relationship with payers is due to a lack of communication and transparency.
ML: The greatest obstacles that centers and payers must overcome together are related to breaking out of traditional models of reimbursement care. This takes time and effort on behalf of both parties.
MM: I certainly wouldn't say that hospital systems, government payers or private payers were somehow working against us, but there has been an unexplainable interest in driving business to the large organization-based health care systems. This, despite a quantum leap of success of ASCs in terms of efficiency, cost containment, access and patient satisfaction. It seems there needs to be a shift in the culture of thinking whereby the ASC is seen as a partner and not an enemy. This involves breaking down the existing relationships between corporate healthcare providers, the insurance industry and the government payers. We won't wine, dine and junket them, but we can emphasize the value ASCs hold overall. This includes making the benefits known to the patients. They are the end consumers and are an invaluable ally in creating this cultural shift. CV: Business is a person-to-person interaction. It is very important to know your payers as people doing an important job. Access to your representatives at the payer level can be difficult and those representatives may leave their position or have changed responsibilities. The best way to continue to negotiate well with your payer is to know the proper people making decisions and the biggest obstacle to creating a constructive relationship is maintaining that person-to-person relationship.
Q: What ideas are innovative endoscopy centers bringing to payers to help develop a mutually beneficial partnership?
MC: There are many ECs that maintain a preferred status with payers. An EC that is considered preferred often means that the EC has accepted lower rates and the payer will direct volume to that EC before recommending EC's with higher rates. A desire to compromise will foster a valuable relationship. Showing how the payers save money will bolster relations and build trust and allow fair contracts that payers and EC's will accept. Contract relationship that reduces the cost of doing business and improves the payer's return on investment will obviously maintain a positive relationship. The EC can save payers money and benefit the EC by reducing denials and claims rework and making sure par providers will work with the EC. The EC should look for ways to control costs to show payers they are well run by offering lower costs to commercial payers while maintaining quality and an acceptable profit margin. ECs should consider developing contracts and partnerships with payers and that are positive for the EC and the payer rather than looking for a one-sided solution. The EC should approach contract negotiations with a reasonable position.
ML: Innovative ideas are changing the relationship between centers and payers. Some centers are offering their patients reimbursement for quality of care as well as performance of services. Centers are also working to achieve higher colorectal cancer screening rates among patients in their areas, as well as focusing on cost-reduction and implementing DRG-like models.
MM: All payers should be influenced by the bottom line, provided quality and patient satisfaction remain constant. We've long been able to demonstrate that we can undercut the fees of hospital-based services by providing the same services at an ASC. What more do the payers want? Progressive thinkers in that industry will see the value of negotiated rates for specific services. If an ASC can guarantee a specific volume of work to be done at a lower cost, it is in the interest of the payer to drive its clientele to that location.
Likewise, even the hospital based systems should see the value of partnering with ASCs to handle some of the volume of their outpatient work. They are obligated to provide these services, but they cannot efficiently be done in the logistical quagmire of a hospital outpatient setting.
CV: I have already encouraged bundled payments. Another contracting idea is to work on three or five year contracts so that neither the ASC nor the payer has to worry about their future
relationships. Offering modest yearly increases of 1 percent to 3 percent on contracts is both good business for the ASC and payer — and achievable when working with representatives who know and trust you.Q: From the payer perspective, what can endoscopy centers do to demonstrate value?
MC: The endoscopy center must earn respect from a commercial payer prior to contract negotiations by good preparation. This may even mean working with a full-service billing company rather than managing your own negotiations. The third party billing company can collect your EC claims history, including in- and out-of-network data, to provide to the payer and ensure accuracy. Also, the billing company may have worked with commercial payer before and have established ties with the contracting departments of commercial payers that can provide a significant advantage over the EC facility director who might be less experienced in the payer contracting process.
ML: Endoscopy centers need to know their strengths and the market within which they are competing. They can make the cost of performing procedures transparent, implement various value measures, improve colorectal cancer screening rates, evaluate the cost of performing global care related to colorectal cancer screening services and adopt preventative strategies for colon cancer.
CV: Document quality. For instance, get AAAHC certification and maintain professional society certifications. Publish quality indicators on your website and in your pamphlet. Make your quality indicators are a part of your contracts. For instance, if you are a GI ASC, assure adenoma detection rate is above national standard by greater than 10 percent, or demonstrate adherence to follow-up procedure guidelines. Research and participate in data registries, such as the AGA Digestive Health Recognition Program™. Registries are often qualified by CMS and allow clinicians to demonstrate and be recognized for superior quality of care in the treatment of many disorders, including colorectal cancer screening and surveillance, among others. Payers and patients understand quality and will reward it.
Q: What are a few of the best strategies for negotiating new contracts with payers?
MC: The EC should always approach payer relationships and reimbursement rates realistically for reasonable prices for services. With realistic expectations the EC can foster a positive relationship with payers rather than a combative one. Of course one must try to get the most reimbursement, but you also need to stay within reason of the demand. In trying to correct a bad contract, the best approach is to sit down with the payer to discuss what you need. The rate may not be the best thing to attack. Other terms of the contract and carve-outs may be the key to successful contract negotiations.
ML: The best strategies for negotiating with payers include knowing your strengths and your particular market area. Knowing your competition, demographic, cost-of-living, cost of providing service and market for facility fees within your region helps a center charge appropriate prices. Knowing what services that you provide that are unique within your geographic area also adds value to your services.
CV: Payers want to know they are receiving quality at a fair price. It's value. Show them that their clients (your patients) are having procedures performed in the ASC setting rather than a more expensive alternative, and then map out that cost savings to them on a spreadsheet. This negotiation is part of your person-to-person business relationship. Make sure that even if you have a five-year contract on hand, meet with your payer representatives at least yearly and supply them with this cost savings documentation.
Q: As health care continues to change, how do you think the relationship between payers and endoscopy centers will evolve?
ML: As the healthcare landscape continues to evolve, there is likely to be a greater focus on the global cost of endoscopy services. There will be increased emphasis on cost-reduction and quality measures related to endoscopy. Reimbursement should be increasingly focused on dedicating a share of savings for both cost-reduction and quality measures met that are mutually agreeable.
MM: It is clear that partnerships between health care payors, hospital-based providers, and free-standing ASC’s are in everyone’s best interests. The most well-served in these types of relationships are the patients, actually. We have the real opportunity here to make access easier, provide higher overall satisfaction, and even reduce costs. Despite the cultural shifts that need to occur before these partnerships take foot, they will come eventually. The driving influence of monetary constraints in the current healthcare environment is simply too strong to ignore. Those institutions that resist these changes will be left behind—in the business world, heads roll when money is lost.
CV: I am anxious about narrow networks. I think they are the biggest short-term threat to ASCs. Data reporting measures are often used as an excuse for excluding ASCs that are not owned by the narrow network. These software issues may be overcome. However, payers understand that quality and cost (value) should outweigh any attempt to exclude some or most ASCs for the purpose of monopolizing patients. I am reassured that payers will not allow narrow networks to exclude the value offered by ASCs in the long-term.
More articles on gastroenterology:
Defining the ideal GI physician partner
9 gastroenterologists in the news
3 GI/endoscopy devices receive FDA 510(k) clearance in August