3 Mistakes Doctors Make When Joining Health Plans

Why is it that most residency programs place very little emphasis on teaching physicians the ins and outs about contracting with health insurance companies? With so much riding on paying down medical school debt, teaching institutions should help graduates understand health insurance plans better.

Professors are certainly at a disadvantage since most of the residency program leaders have little experience in dealing with insurance contracting for small to medium size practices in outlying cities.

So in the above video, I describe 3 mistakes doctors should avoid when contracting with a health care plan. Knowing these mistakes will help you avoid the headaches that even highly intelligent doctors can prevent. In addition, avoiding these pitfalls will lead to less burnout, increase reimbursement, and better patient care.

Mistake #1 – Sign contracts that pay less than what Medicare pays

Doctors want to grow their panels and treat more patients. Physicians will often contract with as many payers as possible to jump start their income generation without paying close attention to contract rate, overhead expense, and patient demographic.

A great way to avoid low ball insurance traps is to consider the population that doctors will be serving. Certain counties may have confined or more complex patients than others. This means, that providers may be required to dedicate more time with those patients. You should only sign contracts that make sense to your practice. Don’t sell yourself short by accepting the promise of high patient volumes without considering the value you bring to the insurance network.

Mistake #2 – Agree to join a health plan that does not provide detailed population reporting

Most physicians and healthcare providers are not trained to review and analyze insurance claim reports. Many insurance plans do not share population statistics with their provider networks for various reasons. Before you sign a contract with a health plan, it is important to know the following: 1) What are the health plans doing to market and gain new patients, 2) what is the health plan’s market share in the service area, and 3) who are the patients being served by the patient population?

Medicare? Medicare Advantage? Commercially insured? Obamacare? Medicaid?

You should gather these reports and analyze the information prior to signing any contract with a health care plan.

Mistake #3 – Accept a full risk Medicare contract with an organization that has a poor track record in dealing with physicians

If you are moving to an area, or you are looking to grow your practice quickly, you may wish to connect with an Independent Practice Association (IPA) or Management Services Organization (MSO) to jump start your practice. A full risk contract is an agreement where you as the primary care provider agrees to care for a population of patients and share in the profits of a premium pool after medical expenses are paid. In a full risk model, 100% of the profits or 100% of the losses are shared on a monthly basis with the primary care physician. Before signing such agreements, you need to do your homework. Ask other physicians in the community about the particular organization. Ask, “How well does the IPA or MSO truly deal with other providers, hospitals, and or health plans???” This will save you a lot of heartburn in the end!

What other things come to your mind? Join the discussion and let me know in the comments what you think. In addition, take a look at my podcast on almost any platform,  Practice: Impossible. I look forward to your feedback!

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