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Home > Resources > eNews > eNews Vol1 No1 Part2 |
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The Managed Care Insider eNews Volume One Number 1 July 1999 PART TWO of TWO Welcome to the first edition of The Managed Care Insider eNews. You are receiving this because you have subscribed; the eNews is never sent unsolicited. Subscribe/unsubscribe information can be found at the end of this eNews. The Managed Care Insider eNews is published, copyrighted, and owned by the Scheur Management Group, Inc. (SMG), http://www.scheur.com and is distributed monthly, free to subscribers. If you wish to forward this edition, you may do so only if the edition is forwarded in its entirety. No reproduction of any part of this publication is permitted without the express permission of the publishers. ---------------------------------------------------------------- IT'S ABOUT MONEY: AN OUTLINE FOR MANAGING YOUR MEDICAL BUDGET The Management Infrastructure: Four Cornerstones Laying the groundwork for a successful Managed Care Organization (MCO) through effective management of the medical budget is much akin to building a solid foundation. It starts with an overall structure to which architectural supports are added to maintain integrity and strength for functionality and expansion in the future. There are four cornerstones to the infrastructure of medical budget management: * Appropriate revenue streams to provide monies to manage. * An adequate provider network to fulfill medical care commitments. * Operational supports sufficient to carry out necessary implementation, monitoring, decision making and problem resolution. * Medical management programs, for both utilization and quality, which guide the provision and caliber of medical care. Although other elements are essential, such as a clear vision, strategic direction, and qualified staff, these core components are the pillars of medical budget management mastery. REVENUE STREAMS: The foremost source of revenue for MCOs includes premiums and/or capitation. Initial construction and ongoing maintenance cannot occur without sufficient funding. While this may seem obvious, most MCO management still relegates important revenue-generating functions such as underwriting, enrollment, billing and collection to "back room" status. However, these items deserve thoughtful attention and allocation of suitable resources: 1. Underwriting & Enrollment: Guidelines consistent with marketing goals, risk protection and profitability, as well as routine rate review and adjustment, policies and procedures to provide proper application of rates and routine reconciliation of membership by account/program, combine to assure strategic systems are in place. 2. Marketing includes well-defined guidelines, revenue- and profitability-based incentive systems, and effective broker management, all within time frames that assure "prepayment" of premiums (considering internal processes that need to occur before the coverage period); appropriate employer and member orientation; and ongoing feedback for product development along with competitive analysis and administrative performance. 3. Billing & Collection: Only with timely and accurate billing, stringent collection procedures, routine premium/capitation reconciliation (large groups, federal and state programs), prudent parameters for extending credit, policies and procedures for pending of claims and/or cancellation due to nonpayment, posting and allocation procedures, and fiscally sound policy for "write-offs" can this area be successful. PROVIDER NETWORK: The provider network, another obvious underpinning of successful medical budget management, is all too often poorly planned, hastily developed and inadequately maintained. Providers are key partners in the viability and prosperity of any MCO. Provider network development, contracting and management should include the following considerations: 1. Provider Mix: Access to a complete set of provider types and specialties for the full spectrum of covered benefits; reasonable availability within providers' panels to serve all MCO members; adequate distribution and proximity of providers to members, by geographic location; and logical groupings of professional and facility providers. 2. Provider Reimbursement: The appropriate methods and amounts of risk-sharing and reimbursement by type of care and provider; and logical reimbursement mechanisms, across the continuum of care, to assure medically appropriate movement of patients through step-down care. 3. Network Maintenance: Continual reevaluation of the adequacy of the provider network, through evaluation of provider availability, by geographic area and type/specialty of provider, as compared to current and projected enrollment; routine evaluation of out-of-network care; contract negotiation and re-negotiation; and ongoing provider education and performance feedback. OPERATIONAL SUPPORTS: These supports can either make or break the ability of the MCO to effectively manage the medical budget. The use of information management systems, i.e. automated "collector" systems, to process, integrate and report on all managed care data is an integral part of an operational support system. MEDICAL MANAGEMENT: Without initial and constant attention to the quality, use and cost of resources, buildings and likewise MCOs cannot remain financially viable. Within an MCO, medical management serves as the resource manager for overall construction and preservation. As such, medical management works in concert with the other cornerstones to assure quality care, in the most appropriate clinical settings at reasonable costs. Once these cornerstones of medical budget management are in place, they must be continually reevaluated and modified to meet the current needs of the MCO as new markets are served, membership changes and new/modified products are implemented. CONCLUSION: Following these "blueprints" for building and maintaining this infrastructure is the essence of managing your medical budget. It will help ensure your financial success, increase market growth, and deliver superior outcomes and a value-added product. ---------------------------------------------------------------- Did you know?? SMG has a new medical management program. MCOREœ: Managed Care Operations and Revenue Enhancement Program. Find out more at our site http://www.scheur.com ---------------------------------------------------------------- News: NCQA to Expand Oversight Role to Include Preferred Provider Organizations: The National Committee for Quality Assurance (NCQA) announced that it will soon begin evaluating the quality of the nation's preferred provider organizations (PPOs) that historically haven't been asked to account for the care and service they provide. Initially, NCQA's assessment of PPOs will focus on evaluating member experience using a survey tool slated for release in the fourth quarter of 1999. A more comprehensive PPO evaluation program will follow in mid-2000. Editor's Note: SMG has developed a pre-survey analysis to prepare PPOs for NCQA accreditation. To find out more, mailto:smgnow@scheur.com. Or call us at 617-969-7500. ---------------------------------------------------------------- SITES AND SOUNDS ON THE INTERNET Ask SMG - An online question and answer forum for health care providers/professionals www.scheur.com. SMG has no ownership of, nor does it endorse, the following sites. This information is presented as a resource for subscribers. AAMCN - American Association of Managed Care Nurses www.aamcn.org ACHE - American College of Healthcare Executives www.ache.org AHA - American Hospital Association www.aha.org AHCPR - Agency for Health Care Policy and Research www.ahcpr.gov AMGA - American Medical Group Association www.amga.org ASHRM - American Society for Healthcare Risk Management www.ashrm.org Health Leaders: www.healthleaders.com For information and resources for providers, visit HCFA online: www.hcfa.gov ---------------------------------------------------------------- End of PART TWO of TWO, The Managed Care Insider eNews, Volume One, Number 1 Scheur Management Group is a nationally recognized change agent for the health care industry. We provide hands-on operations management and consulting services that improve your business and promote best practices in managed care. We deliver market-driven, customized solutions to clients in all segments of the health care industry. Contributors to this edition are Barry Scheur and Robin McElfatrick. Editor is Ruth M. Aaron. Research by Judith Jaffe. Production Coordinator is The Gracefield Group at http://www.gracefield.com/gg/index.html TO SUBSCRIBE: send email to insider@scheur.com with the word SUBSCRIBE in the subject and name, email, company, title, and country in the message. TO UNSUBSCRIBE: send email message to insider@scheur.com with the word UNSUBSCRIBE in the subject. Or visit our web site at www.scheur.com and go to our subscribe page. You can subscribe/unsubscribe directly from there. Get up-to-the-minute health care news online at www.scheur.com. |
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