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Home > Resources > eNews > Aug 1999 |
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The Managed Care Insider eNews Volume One Number 2 August 1999 PART ONE of TWO Welcome to 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. ---------------------------------------------------------------- Compliance and Branding were selected as the focus of this issue because each, in its own way, has a direct impact on healthcare payers and providers. Compliance is a highly visible impact issue in healthcare and its delivery. Branding "how to's" in Part Two provide strategies for healthcare organizations to capture market share and succeed in an ever-increasing competitive marketplace. Insider Vision: A Perspective on Compliance by Barry S. Scheur, President Scheur Management Group "Compliance" has become one of the new health care gods -- a deity that you must worship and to which you must pay homage and make sacrifice. This sacrifice is usually in the form of control over business practices, filing lots of paperwork, and paying fines when it's been determined that you are out of compliance. The purpose of this article is to discuss some of the more controversial aspects of managed care compliance and to give advice from the perspective that, given the reality of the level of government involvement in health care delivery and quality, financing and reimbursement, and control over business practices, a proactive cooperative stance with regulatory authorities is the best prevention against trouble. When the term compliance is used, most people think of Medicare and Medicaid fraud, particularly as it applies to billing for care not provided or for inflating fees. However, compliance also refers to issues of private inurement for non-profit institutions, particularly as they provide "freebies" for physicians in exchange for preferential referrals, and to the quasi-governmental aspects of accreditation of HMOs, PPOs and other managed care entities by NCQA and JCAHO. Lastly, particularly with respect to HMOs, compliance applies to the financial aspects of business solvency pursuant to government regulations. In the mid-1980s, the predecessor company of the Scheur Management Group served as the management arm of the National Association of HMO Regulators (NAHMOR) for its regulatory foundation. Since there was little knowledge and much misinformation about how to regulate newly created managed care companies, SMG was asked to write a book under NAHMOR's auspices titled "The HMO Regulatory Primer." That book became the managed care regulatory bible for a decade. When we built HMOs for our clients, we made certain that the regulators were the first rather than the last to know what we were planning. By bringing them into our confidence, we were convinced that they would assist our clients in meeting legitimate requirements. But the business became more complex with the emergence of for-profit and publicly traded companies, where regulatory decisions and potential leakage of information could drastically affect share prices and investor well-being. The regulatory process became more adversarial when not-for-profit HMOs decided to petition to convert their corporate status to for-profit, thereby giving them access to capital and accumulation of wealth for their owners. In the managed care world, the regulatory process has been equally divided between the role and mission of public health regulation as it pertained primarily to ensuring sufficient access to care, quality, and delivery of care, and the insurance aspects of the health care business that have been routinely regulated by insurance departments. Again, this part of the business got more complicated, triggered largely by the bankruptcy of Maxicare and the discovery by a number of state officials that premium dollars were not always where they should have been, i.e., in the bank accounts in those states where the care was provided. The most recent chapter in the evolution of regulation has been the concern over quality, both in terms of access to care and the financial incentives through capitation and other reimbursement mechanisms that HMOs and provider networks utilize to control and "manage" care. This has given rise to the too often repeated phrase that managed care is really managed cost. Several states, beginning with Florida and Rhode Island, coincident with the demise of the HMO Federal Qualification program, decided that the accreditation bodies of NCQA and JCAHO should be relied upon by state regulators to evaluate whether HMOs (and more recently, PPOs) should be allowed to continue to do business. While many employers have come to rely on NCQA and JCAHO for the equivalent of the "Good Housekeeping Seal of Approval," there is growing skepticism that these organizations are looking at the right issues. Documentation of care processes and quality improvement studies don't answer questions of financial solvency, customer service, or how providers feel about the effectiveness of the managed care company. United HealthCare, one of the nation's largest publicly traded managed care companies, has recently spurned NCQA for JCAHO, perhaps because the requirements are easier to meet or perhaps because they make more sense. Meanwhile, these compliance initiatives certainly have not correlated with a happier group of customers, judging by the increasing anger over what is perceived as inadequate or unreasonably controlled care. In other words, if we're being regulated more, why does it feel like it's working for us less? The one area in which the states have been left to their own devices, in an increasingly complex maze of mergers, acquisitions, interlocking companies, and other business structures, is with respect to fiscal solvency. Right now there are more managed care organizations on the verge of collapse than at any time in the past decade. Yet, regulators and employers, those who are charged with protecting consumers and policyholders, are too often the last to know that the hurricane just blew through the house. They need to have better (and more timely) information about the true financial conditions of the HMOs, PPOs, and networks they regulate or purchase. Scorecards clearly aren't adequate; the simplistic step of increasing the amount of capital required in the business doesn't provide the early warning mechanisms that are needed. After all, an HMO with 50,000 enrolled lives can go through a $10 million capital swing in a short period of time. Additionally, the requirements for participation in the Medicaid and Medicare programs have mandated the emergence of full-time compliance specialists. Their roles cover broad aspects of understanding and compliance with regulatory requirements, monitoring and influencing regulatory changes, ensuring that appropriate clinical and educational standards are met, and ensuring the adequacy and integrity of reported information. Compliance is a burgeoning career field, especially considering the level of vigilance of the Federal OIG in combination with the FBI against physicians and hospitals. There are still many unanswered questions about how the emphasis on compliance will impact the managed care industry; some refer to it as the "straightjacketing of the industry." Increased compliance not only translates into increased premiums, but the specter of HMOs being strictly liable for the acts of alleged negligence on the part of physicians and hospitals is a full employment act for tort lawyers if there ever was one. I wonder also if many of the HMOs that have exited the Medicare risk program would list the complexity of compliance as one of the greatest contributing factors. If compliance is perceived as a major cause of the withdrawal from the health insurance business, the elimination of many companies will result in larger entities with more dollars to spend on contesting and accommodating compliance, but the result will be less choice for the consumer. With this responsibility in mind, our mantra for the next decade should be: Reasoned Regulation. --------------------------------------------------------------- Sites and sounds on the Internet regarding regulations and compliance. NOTE: SMG takes no ownership of these sites. They are offered as a point of reference for readers. http://www.os.dhhs.gov/progorg/oig/, Office of the Inspector General http://www.ncqa.org, National Committee for Quality Assurance http://www.urac.org, American Accreditation Healthcare Commission http://www.jcaho.org, Joint Commission of Accreditation of Healthcare Organizations http://www.chapinc.org/, Community Health Accreditation Program http://www.cchsa.ca/ , Canadian Council on Health Services Accreditation ---------------------------------------------------------------- End of PART ONE of TWO, The Managed Care Insider eNews, Volume One, Number 2. 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 Ruth Aaron. Editor and Research by Judith Jaffe. Production Coordinator is The Gracefield Group at http://www.gracefield.com/gg/index.html TO SUBSCRIBE: visit http://www.scheur.com/smghome.nsf/webcontent/ezine.html or send e-mail 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 eNews page at http://www.scheur.com/smghome.nsf/webcontent/ezine.html for archives and subscriber information. Get up-to-the-minute health care news on-line at www.scheur.com Go to August 1999 Part 2 |
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