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Biggest Payer Pains

Last week, I posted a few key trends and opportunities shaping the Payer industry in “What’s Hot in Payer Today.”   But what are some of the complex situations that can shrink the gap between profits and costs for a Payer?

Below are some examples of issues that require tough thinking to solve:

●     Physicians retire or move into new specialties. General practitioners are harder to find and often overbooked so that obtaining an appointment is very difficult.  Malpractice insurance may become too expensive to warrant a specialty focus and drive Providers to other areas, e.g. pediatricians and anesthesiologists. Perhaps service requirements (number of patients at a certain fee) do not allow a provider to deliver quality care. The motivations for a provider to change may vary, but it is clear that in order to meet regulatory requirements as well as serve a member population, you need to understand the demographic makeup of your network both participating (PAR), non-par as well as prospective providers. Rate sheets and fee schedules are hard to determine and understand as to how much a Physician must be paid to service a specific area in their specialty…think about calculating hazard pay or special incentives but not knowing the details–that’s hard.

●     Members want an accurate provider directory and want to be advised when their preferred physicians become available in a network. As with social media, members may purchase a payer product once the network aligns with their preferences. A push-notification would be preferred to occasional manual checks by the member.

●     Providers tire of repetitive flyers mailed by Payers. Payers often send payments or material to the wrong address because addresses are not standardized in the Payer systems. Resending compounds delayed payment, costs money, and in some cases, violates a regulatory requirement to resend content in a timely manner. These issues drive costs to the Payer.

●     Pended claims absorb substantial resources and costs, especially if coordination of benefits and subrogation processes come into play.

●     Credentialing typically takes too long to onboard new providers into a network (i.e. 30-40 days). Members want faster intake on providers. If you are purchasing insurance on your own, you may do a combination of getting a plan that already has a specific provider in-network then switch once that provider is credentialed elsewhere. This leads to member churn, which reduces the benefits from wellness or care management programs from a single Payer.

●     Some states mandate a density of specialties available within a certain distance of an urban hub to participate in Medicaid. For example, regions and zones must have seven neo-natal specialties within ten miles of the city.

●     Payers have a hard time servicing small employer groups because the overhead of “fixing” claims data is too large and costly making smaller groups un-economical. Simplifying claims processing by reducing duplicative systems would allow an entire market segment to be more profitable, increasing competition and care outcomes over time.

All these business issues require high quality data to inform and drive decisions and actions.

Stay tuned for future posts on Provider trends and pains.

-Tina McCoppin and Jim Van de Water contributed to this blog.