NC Providers: 4 Lessons for Making Progress in a Time of Uncertainty
By Tina Simpson, Chief Compliance Officer, Emtiro Health
Last month the North Carolina Department of Health and Human Services announced that implementation of Medicaid Transformation will be further delayed pending the approval of a department budget. No new date for implementation was offered, and given the bitter stalemate between the Governor and the General Assembly, this likely falls into the category of “Ask Again Later” (courtesy of my handy Magic-8 Ball™). This second delay, while not surprising, unearths new questions and challenges for the state, providers, patients, and prepaid health plans (PHPs) in the implementation of Medicaid Transformation in North Carolina.
Many of these questions cannot be answered in this moment, but here is what we do know. First, Medicaid Transformation remains “a question of when, and not if” (although further detail on the “when” would be appreciated). Second, it is going to be hard and sometimes messy.
Implementing transformational change across a system (any system) can be a daunting, herculean task. But that doesn’t mean it is any the less necessary or urgent. This remains true of Medicaid Transformation.
It is going to be hard and there are going to be more surprises. But the Advanced Medical Home model, for example, is one of the most innovative remodels to Medicaid administration in the nation and offers a compelling alternative to the current system.
Of course, that doesn’t make the uncertainty created by legislative gridlock any more comfortable. To counteract that, I am reminded of the wisdom of the Serenity Prayer:
Grant me the serenity to accept the things I cannot change,
the Courage to change the things I can,
and the wisdom to know the difference.
In this context, subjected to a myriad of unknowns and surprises, it is important to focus your attention and resources on the things that you can impact and leverage for greatest impact. For North Carolina providers, the most important and impactful area of control in this moment is how they contract with the Prepaid Health Plans (PHPs). For that reason, we are dedicating this Knowledge and News article to outlining four important insights and lessons regarding contract negotiation that we hope can inform your pending discussions.
Lesson One: Read the Fine Print (and then read it again, and again)
Back in June, a representative from each of the PHPs likely dropped off their respective provider agreement (helpfully tabbed for your signature) at your practice. You may have been informed (correctly) that the Provider Agreement had been vetted by the State and was now ready for your signature.
Hopefully, you did not just sign.
I say this recognizing how tempting it may be to dash off a signature and square it away. First of all, these contracts and their incorporated materials are often long, complex and, as such, painful to wade through. Secondly, Medicaid reimbursement is hardly the most lucrative area of practice for many providers. It can, therefore, be tempting to write off the contract and just sign it as is. However, this would be a mistake. It is important that you thoughtfully evaluate the terms of these agreements. That means reading all of the fine print.
Let me give one example where the devil may be in the details – or rather, in the “deeming” conditions that are common in a number of commercial payer contracts.
It is not unusual for insurance companies to reserve the right to “deem” or assign a provider participating in one network or product to other networks and products, at their sole discretion. This allows insurance providers to build out their networks for other products at reduced expense and on tighter timelines.
The State has expressly prohibited PHPs from “deeming” existing networks into this new Medicaid line of business, insisting that PHPS build out their network by engaging in direct and good faith negotiations with providers for Medicaid managed care. However, that doesn’t automatically guarantee that those new Medicaid contracts will not include language that allows the PHP to expand your network participation to other networks not currently in the contract. This could include Medicare products, the projected Behavior Health Tailored Plan, or commercial products. Needless to say, a clause such as this may radically change your practice’s assessment of the risk of that contract.
The bottom line here is: read every line of the agreement. Then read it again and share it across your team. Having different members of your team–from operations to clinical staff to legal–read and review the terms can greatly improve your perspective on the agreement and help you conceptualize how those terms and conditions will actually impact your practice from day-to-day. It may also inform what resources you are going to need in order to meet the administrative burden associated with implementation and administration of Medicaid managed care.
Lesson Two: Seek a Meeting of the Minds (and then memorialize it)
Clarity is king when it comes to contracting. There is an expression in contracting that says, “There is no contract without a meeting of the minds.” In other words, for a contract to be enforceable it must reflect a shared understanding or agreement between two parties.
As a corollary to that, it is important that regardless of whatever assurances are made by other parties during the contracting process as to the intention or impact of a given term, the final executed agreement clearly reflects those assurances.
This can feel awkward, particularly when you are negotiating with a prospective business partner. It is tempting to avoid clarity in the interest of seemingly unchallenged consensus and determined optimism. Roy H. Moore put it best: “The risk of insult is the price of clarity.” But it is a price that must be paid.
As anyone who has gone through a challenging IT procurement and implementation process can tell you, the gap between the sales pitch and the final contract with enforceable performance standards can be wide. And it is only the latter that really amounts to anything. There may be no contracting without a meeting of the minds, but the market for litigation attorneys would experience a downturn if all contracts clearly expressed this.
The bottom line here: Be sure that the final agreement accurately (and unambiguously) reflects your intention and understanding.
Lesson Three: Know Thyself (that includes areas for improvement)
It is important to enter any negotiation well aware of your own strengths, objectives, and “pain points.” Contracting for Medicaid Transformation services is no different; it, in fact, highlights the importance of this maxim. Medicaid Transformation is not going to be easy. The transformation represents a fundamental change to the operation of a $14.6 billion program, serving over 2.1 million patients. The first question, therefore, is what will you need to make that transition a success for your practice and for your patients.
As one example, while Medicaid has traditionally reimbursed at a lower rate that other payers, it has always had the advantage of predictability and fairly seamless AR processing. Submitted claims are largely uncontested and paid with enviable regularity.
Looking forward, providers will need to administer and submits claims to up to five different payers, each with their own processes, requirements, and conditions. Consequently, to ensure that providers are not leaving earned money on the table, they will need to punctiliously “work” denials in the same manner that they do commercial claims. This will require additional staff time and resources.
And that just reflects the immediate operational impact and cost of Medicaid transformation. The State has unequivocally stated their intention of a fairly rapid transition towards value based payments beginning in year two and growing aggressively after that. While PHPs have the incentive to partner with you to meet these metrics, you will need to vigorously advocate for the resources that you need in order to meet these goals, including adequate reimbursement.
Lesson Four: Know your BATNA (Best Alternative to Negotiated Agreement)
BATNA, a concept developed by Roger Fisher and William Ury in their seminal work Getting to Yes: Negotiating Agreement without Giving In, stands for your Best Alternative To Negotiated Agreement. It is critical to keep your BATNA in mind, not just in the development of a contingency plan, but also in order to evaluate the acceptability or even desirability of proposed offers.
Understanding your BATNA is particularly important when engaging in negotiations with PHPs. While not necessarily true of all insurance companies or PHPs, insurance providers have a reputation for “strong arming” negotiations. That is, presenting offers in the context of “take it or leave it” with little room for compromise. Particularly when engaging within negotiations where there is a perceived power disparity, it is important to take stock of your own arsenal.
To this point, there are a few things providers should keep in mind. The AMH model was designed to give providers greater control in the treatment and administration of Medicaid patients individually and in the transition towards population health management. The State has made several steps over the last six months to reinforce this central tenant of the AMH model. The first came with the publication earlier this summer of the Department’s expectations regarding the performance and administration of care management services and capitation rates. More recently, the State announced that they have amended their contracts with the PHPs to impose explicit restrictions on PHPs in regards to discrete areas where they may contract with providers.
Finally, as you assess your BATNA, and despite what PHP representatives may relay regarding any pending deadlines (Note: these deadlines are imposed on them by the state in order to demonstrate network adequacy), North Carolina is an “any willing provider” state. That means that any provider may contract at any time to provide Medicaid services. There is no timeline or mandatory provider enrollment season. That is not to say that you should not actively engage in contract negotiations. Rather, as an informed negotiator, you should not allow yourself to be bullied into assuming that the PHP’s timelines and constraints are your own. They are not.
Conclusion
In conclusion, we are in a period of change, full of unknowns. Successfully navigating that change will require drawing on many different resources (not least the the aforementioned Serenity Prayer and Magic-8 ball). Wrapping up favorable contracts with the PHPs that are responsive to your needs, represents the primary area of control you, as a provider have at this time. Keeping these four lessons in mind as you confront the dreaded contract mark-ups, will put you ahead of the game and in a position to effectively navigate the next stage of transformation and the world beyond.
Do you have further questions regarding contract negotiation? Get in contact with Emtiro Health today.
Tina Simpson is the Chief Compliance Officer and Director of Contracting for Emtiro Health and leads the Emtiro Health consulting team, advising clients on contract negotiations for Advanced Medical Homes and value-based purchasing agreements.