A recent report from the National Institute of Health Care Management (NIHCM) found that vertical integration among physicians allows doctors to negotiate higher reimbursement rates from insurers. According to the study authors, when specialists’ practices are integrated with primary care doctors or other specialties, average prices paid to specialists by insurers is higher. This trend is even stronger when the doctors they integrate with have good concentration within a market.
One option is to join a clinically integrated network (CIN), which is a contractual arrangement among providers who work together to treat patients based on agreed-upon protocols. The goals typically are controlling costs, improving quality of services provided to patients, and increasing third-party reimbursement. Physicians have some accountability for meeting goals and measuring outcomes set by the network and they usually incur some financial risk. But they can remain independent and maintain a patient load outside the network.
The networks allow doctors in a market to band together with the ultimate goal of increasing negotiating power with payers. Bryan Niehaus, vice president of the healthcare consulting firm Advis, based in Tinley Park, Illinois, said these groups also allow doctors to share costs, expenses, and risks. They can also allow providers to share ideas for improving patient care and value.
In addition, CINs can also help retain or increase patient numbers. Doctors often lose track of patients if there is no affiliations among the organizations.
“Patients can get lost [to a practice] unless you are making sure all providers know what is happening between visits,” Niehaus said. CINs create an interconnected provider community that gives patients choices.
David Zetter, president of Zetter Healthcare Management Consultants in Mechanicsburg, Pennsylvania, said he has physician clients who join these networks solely for referrals. In some tough markets, primary care doctors and hospitals make many referrals, and specialists want in.
Are they right for everyone?
Zetter said there typically is not much downside to joining CINs, but providers should do their due diligence before signing a contract. “The key is to evaluate everything and make the right decision only after having the information and data you need,” he said.
Before joining a network, providers need to find out about the fees they may have to pay to belong. They also should learn about the threshold for data reporting and whether the network will support that, or if that will be up to the providers. Providers also must have a good handle on the required quality benchmarks and be comfortable with meeting those numbers. If not, providers can get kicked out of the group, which could be a difficult blow if a larger portion of their income depends on the network’s patients.
“How comfortable would they be if they had to leave or were forced out?” Niehaus said. “They should know how that would affect their practice and if patients would leave or stay with them.”
Doctors should also understand whether joining a network would help then move toward their own practice goals.
For instance, Zetter had a client who was interested in making money while treating underserved populations. Being part of a network allowed him the flexibility and income to also see a portion of Medicaid patients at his practice.
Physicians also need to have a good understanding of the market served by a network and its business plans going forward. Whether a group decides to participate in an integrated network or not, they should understand how that network might impact the market. Sometimes, if the market becomes flooded with CINs, it creates downward pressure over time and insurers’ reimbursement rates drop. This was born out in the NIHCM report, which found that, for all providers, the pricing advantage received by integrated networks dropped when there was a higher concentration of similar providers in the market.
‘Not Always a Home Run’
“It’s not always a home run for practitioners,” Niehaus said. “There are rules around how they function. Doctors have to have skin in the game, and there is time and commitment associated with a CIN. And if they fail to deliver various things agreed to in the contract, they can face some downside costs.”
Most doctors are able to negotiate reimbursement rates higher when they are part of a CIN, Zetter said. To determine if it makes sense to take part, providers need a list of all reimbursements from their payers plugged into a spreadsheet. That makes it simple to see if the network reimbursement is higher than what a group already receives from its payers.
Some contracts for specialists are already negotiated through the CIN. But if providers can negotiate their own, they should be prepared to show what they can do differently to provide a benefit to the network. If providers know they can offer good quality at a low cost, they need to demonstrate that with data and patient satisfaction surveys.
“Do your homework,” Zetter said. “It’s all about requesting an increase and helping the payer understand why they should pay you that. You’ll have a much better chance of coming out of the negotiation with a win than if you just go in asking for a good rate.”