Expert Panel Recommends Strategies for Family Planning Centers To Contract With Health Plans

July 26, 2012 — Summary of "Working Successfully with Health Plans: An Imperative for Family Planning Centers," Gold/Sonfield, Guttmacher Institute, June 2012.

Family planning centers serve as "vital safety-net providers in many communities," but on average, 40% of their clients have no source of third-party reimbursement, the Guttmacher Institute's Rachel Benson Gold and Adam Sonfield wrote in a report recommending ways family planning centers can work more effectively with health plans. Developing avenues for third-party reimbursement is especially critical given budgetary and political pressures to reduce public family planning funding, they noted.

For family planning centers, the Affordable Care Act (PL 111-148) holds the prospect of increased third-party reimbursement because it will extend health insurance to many of their clients for the first time. The Congressional Budget Office estimates that by 2016, the ACA will bring an estimated 32 million additional individuals into the marketplace for Medicaid or private coverage.

However, if family planning centers are to retain their client base and obtain third-party reimbursement, they will need to work successfully with Medicaid -- including Medicaid managed care plans -- and the private health plans in which their clients are enrolled.

Methods

To develop suggestions for how family planning agencies can work effectively with health plans, Guttmacher in November 2011 arranged a two-day meeting with an expert panel consisting of representatives from family planning agencies and consultants who work with family planning centers to maximize third-party revenue. On the first day of the meeting, HHS Deputy Assistant Secretary for Population Affairs Marilyn Keefe and Deputy Director of the Office of Population Affairs Susan Moskosky also participated as observers.

During the meeting, the panel discussed a wide range of topics, including how a center can position itself to be attractive to a health plan; determining the cost of the services provided; negotiating with health plans; key contract elements; and the critical aspects of functioning as a participating provider.

Recommendations

The panel grouped its recommendations into three main categories: assessing cost and readiness, negotiating a contract, and operating under a contract.

Assessing Cost and Readiness

Panel members noted that family planning agencies that begin contracting with health plans could experience a culture shift, in part because of changes to an agency's business model. Therefore, the panel recommended that prior to contracting with a health plan, an agency should assess its readiness and strengths.

When conducting a self-assessment, the panel recommended that a family planning agency analyze its current clientele, staff expertise and infrastructure, as well as research the marketplace in which it operates. Panel members noted that a center's health information technology capacity is a "critical component" of its infrastructure.

As part of the self-assessment, panel members recommended that centers conduct a cost assessment to identify the complete cost of providing care. The cost assessment should include general costs, such as staff salaries and basic infrastructure; annual revenue; and the cost for specific medical services.

However, the panel members noted that most family planning centers will not have the cost information for a specific procedure. In that case, centers first should categorize services by using the American Medical Association's Current Procedural Terminology codes, which use a unique numerical code for each service. Then, to compare the value of different services, the panel members recommended using a system such as AMA's Resource Based Relative Value Scale, which assigns a relative value to each specific procedure and accounts for such factors as geographic region and malpractice outlay. The experts cautioned that proper coding may require updating a center's IT infrastructure and potentially purchasing coding manuals.

Negotiating Contracts

The panel stressed that the key to developing a relationship with a health plan is negotiating a good contract, which often depends on agencies knowing what strengths they bring to the bargaining table.

When negotiating a contract, agencies should focus on three key aspects: positioning the center to negotiate from its strengths, becoming familiar with the health plan, and understanding what is and is not negotiable. For example, the panel said that commercial plans generally are not open to negotiating reimbursement rates, but there often is more room to negotiate the rates with plans that serve Medicaid beneficiaries.

Other areas to consider for negotiation include the window for filing claims, which services are covered and whether new ones can be added, and confidentiality concerns -- such as asking that plans do not send explanations of benefits to dependents whose family might learn of confidential services and that names of staff members at agencies that provide abortion services are not publicly listed.

Family planning centers' long track record of improving reproductive health and short wait times are attractive to health plans, the panel members noted. They added that many family planning centers are part of large provider networks, which can be an important bargaining chip because it allows plans to acquire a large provider base through a single contract.

Operating Under a Contract

Once the contracts are signed, agencies must continue to adjust and adapt to meeting everyday demands of working with the health plan. The panel members noted a variety of issues -- such as whether clinicians have the right credentials and administrative staff to understand how to submit claims -- can create ongoing problems that can affect reimbursement.

Electronic tools can help mitigate paperwork issues, the panel members said. For example, software can track whether clinicians' licenses are up-to-date and other requirements from health plans. The panel also emphasized that front-line staff need to be well-trained on how to verify and properly format data before it is submitted to a plan, and respond quickly to any reported claims problems.

Again, panel members emphasized the benefits of technology -- particularly an electronic health record system -- that helps guide clinicians in assigning the correct codes for services. However, they cautioned that technology will fail without proper maintenance and regular updates.

Discussion

"Members of the expert panel were unanimous in their belief that family planning clinics will need to become adept at working with health plans in order to remain viable health care providers going forward," Gold and Sonfield wrote. They noted that working successfully with health plans likely will alter an organization's culture and mean a greater focus on the "business" aspects of the operation, but that does not mean it should change an agency's underlying mission.

A recurring theme in the discussion was the need for agencies to take advantage of economies of scale whenever possible, including by developing relationships with other family planning providers.

The panel members also repeatedly stressed the importance of a center's infrastructure, noting that basic health IT functionality, such as electronic claims processing, "is essentially a prerequisite for being able to participate with health plans," the researchers wrote. This is an area where the Title X program and OPA could provide critical support through "a reorientation of priorities and a redirection of at least some current resources," Gold and Sonfield wrote.

"Going forward, Title X is unlikely to be a major source of funding for the clinical care at the heart of publicly funded family planning," the researchers wrote. However, they conclude, "the program is uniquely positioned to provide the support for program expertise and infrastructure that could position these agencies so that the clients and communities they serve will be able to continue to rely on them in the emerging marketplace."