FROM A SYSTEMS-BASED PRACTICE, ISSUES TO CONSIDER FOR PRIMARY CARE PHYSICIANS

Factors used to determine Bonus may include:

  • Number of members PCP treats
  • PCP’s cooperation in patient management
  • Available office procedures
  • Scheduled office hours
  • Internal practice coverage for when PCP is unavailable
  • Member opinions and transfer rates
  • Percentage of patients receiving preventative care

Since the systems-based practice environment creates risks not present under fee-for-service arrangements, providers will try to minimize risks by accepting capitation only for services they can control.

One way providers can minimize risk is to specify certain services as exempt from capitation (“carved-out” of the MCO contract). Carved-out services may include out-of-area emergency, out-of-network services in plans that allows members to use non-network providers, mental health, substance abuse, vision and dental care.

Some Contract Questions:

  • Distribution of surplus funds among providers
  • Stop loss recoveries – MCO’s reinsurance
  • Who risk sharing partners are
  • Exclusions from capitation
  • Settlement provisions, including timing

To get a balanced contract, some consultants urge providers to ask a broad range of questions, even if they do not know exactly what all the answers should be. The questions can help determine how payments will be calculated, who is covered, and how treatment is managed. For example, questions might include: how surplus funds (such as from the risk pools) will be distributed among providers; how stop loss recoveries are handled (such as when the MCO’s reinsurance applied for example in a catastrophic case after a specified dollar amount was spent by either the MCO or PCP); who the risk sharing partners are (for example, are all of the PCP’s from the variety of agreements that the MCO may have — formed into a group to share the risk for a specific pool of funds); what are the exclusions from capitation; and what are the provisions about settlement, including the timing of settlement.

Some Issues to Consider In Providing Care Include:

  • Ethical issues
  • Medical Malpractice
  • Quality Controls

MCO’s might not use the term “withholds” and use the term “bonus” and pay a lower capitated rate that equals out to a higher amount if the PCP meets the performance standards and goals to receive a “bonus”. Factors that payors may use to determine bonuses include: number of members PCP treats, PCP’s cooperation in patient management, available office procedures, scheduled office hours, internal practice coverage for when PCP is unavailable, member opinions and transfer rates, percentage of patients receiving preventative care.

Thus, it is to the advantage of the capitated PCP to keep his/her patients healthy and to practice preventative medicine and to focus on treating patients efficiently and providing alternatives to inpatient and costly care.

As providers assume more risk – need for utilization management programs for clinical efficiency becomes paramount.

It may seem to some physicians that as physicians there might be more incentive to not provide care under the managed care system. Besides the medical malpractice and ethical issues that can arise with that approach, consider the quality controls that may be implemented into the managed care system. There may be built and continuing to be built into the managed care system a quality control so that physicians learn to provide better care to their patients in terms of trying to keep their patients healthy in the first place. Under this system, physicians are compensated by ways of an incentive or a bonus by the MCO’s to provide such service. It could be interpreted that the MCO’s are not doing this out of the benefit for mankind, but to protect their market share and gain more in the marketplace. Also, some physicians are providing these services because they do not want to have any problems in case they are audited by MCO’s or others as compared to protecting their patients.

For Providers to get a balanced contract – ask a broad range of questions.

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