Five areas where provider management needs to evolve

The world of insurance is changing. Reform is spurring on innovation in new products, new types of incentive models and new types of care models. But what might that mean for payers?
FierceHealthPayer recently checked in with Sam Muppalla (pictured), executive vice president at Blue Bell, Pa.-based Portico Systems, which offers provider management solutions for health plans, to find out. Here's his take on five areas where payers will need to improve provider management to survive. 

Tailored networks. When you look at how payers will have to respond to reform, how insurance is sold and purchased is changing dramatically. In the individual marketplace, more of the uninsured will get coverage and products to ensure that coverage via exchange is the big macro change there. In the group market, the amount of competition for the same group of customers will increase. At the same time, expect a rising demand by employers for more tailored, or value-based, benefit structures.

Payers will need to make sure that for every benefit structure they have out there, the payer can deliver on promises made about the product. Payers will need to align their delivery networks to new products in the marketplace. "What we're increasingly seeing is that not only is this becoming increasingly more dynamic, but this needs to be more criteria driven," Muppalla says.

Enforcing network performance guidelines becomes critical. This means you'll have to ensure that the network includes the right type of specialists and primary caregivers who offer the right kind of experience, quality, certifications, medical background, facilities, convenience and cost factors.
As the insurance company tries to cement its relationship with hospitals and doctors, its entire relationship is based on its ability to steer members to the doctors and hospitals and the economic impact of that membership inflow on providers.

As the payer steers members to providers, it's important to calibrate the mix. It's quite likely that the people coming off the exchanges will have lower reimbursements than the members coming in from group products. "A payer has to very intelligently balance the mix of populations going to the provider" so that the provider can continue to remain economically viable, Muppalla says.

Lean provider administration. To service the new products, you'll need new types of networks. To administer the relationship, health plans will need to keep up with providers' moves, keep up with all the information that governs the relationship (data maintenance), service the provider, credential the provider on an ongoing basis, and contract and recontract with the provider. When you deploy process automation to reduce labor, you'll need to connect multiple departments through electronic workflow to eliminate manual handoffs and those big paper stacks that move between departments, Muppalla says.
Collaboration. How do you improve collaboration between provider and patient and payer and provider? The main objective, according to Muppalla: "If you boil it down, it's a question of making sure that you are able to influence the right audience at the right time."
The payer has two audiences. It needs to influence providers to make sure they do the right things at the right time. At the same time, you need to influence patients to take part more in their care. "And none of this influence is plausible if you don’t have the right information in front of them," he says.

For example, if you want to incent the providers to follow certain preventive protocols, you need to give them information on what those protocols are, what patients they apply to and how it influences their compensation. "A lot of what we're looking at in collaboration is how do you create transparency and through transparency--engagement," Muppalla says.

Value-based reimbursement. How do you incent providers in this brave new world and ensure you move from pay for volume to pay for value without increasing the administrative burden on the provider? And how do you do it with a high level of transparency so everybody knows how they're getting paid and why they're getting paid?

Value-based reimbursement has to be based on outcomes and things that lead to better outcomes. First, says Muppalla, you need to be able to design and codify the reimbursement, defining the kind of performance you expect of your doctors and hospitals. You must ensure the legal document is understood by the system, so you don't have to do a lot of manual administration of the contract between provider and payer, because you don’t want to rely on armies of administrative people ensuring claims are paid correctly.

To make the move to value-based reimbursement, your systems and business processes will need to be agile, Muppalla says. But he's realistic too. "We're not going to magically go from fee-for-service to episodal payments or global payments overnight," he says. "It's going to evolve as a hybrid of different things. It's going to involve experimentation.

"The key thing we're talking about in provider management is to set up an infrastructure that allows you to do this innovation without increasing the costs around it," he adds.
Provider intelligence. This last category creates insights on providers and makes possible the previous four operational processes. Think of it as analytics, Muppalla says, that help you understand and measure what it happening.

A lot of the healthcare reform will translate into a new operating model for payers, Muppalla says. And it will have to decrease the administrative burden on providers and increase the amount of information available to providers so they can influence their patients in the right way. All the while payers will have to increase the transparency of payment and payment models to providers so they understand how they will be compensated.