Surveying the HMO landscape

Friday, June 30, 2006

Q. With Medicare cuts coming fast and furious, my boss wants to diversify our payer mix and has asked me to seek out HMO contracts. Where do I start?

A. Start by studying the health plans in your market. BlueCross BlueShield and other HMO and PPO plans probably do business in your area, but some will be national companies that don't have a local office. Unless they account for a substantial enrollment in your market, focus on locally based payer sources first. Three key things to learn about each payer:
- How many members are enrolled with each payer? That will give you a starting point for prioritizing accounts if you have several to choose from. Large enrollments--150,000 or more--improve your chances of being accepted and could result in more referrals.
- How many HME providers already contract with the payer? You can find this information either on the payer's Web site or by looking through a provider directory supplied to members by the managed care organization. Knowing how many HME providers are under contract and who your competition is will help you to develop a pricing strategy. If there are a lot of providers already in the network it may be harder to secure a contract.
- Who is responsible for provider contracting at each payer source? This person is your primary contact point. Call the payers in your market and ask for this information, including a direct dial phone number. Once you reach your contact, ask good questions. You'll want to know how they select network providers. Do they use an RFP process? If yes, when do they expect to issue a new RFP? What are their criteria for participation? Most payers insist on accreditation such as JCAHO. Ask for an appointment to see the decision maker. Focus your discussion specifically on how your company provides quality care and customer service. Be sure to tell them about any unique patient care programs you offer.


Len Serafino is vice president, eastern division, of CHAD Therapeutics. Reach him at (615) 708-9548 or