Managed care contracts are like potato chips: It seems no one can have just one. And it's easy to understand why. The more you sign up with, the more money you earn (at least in theory). But even if joining a number of managed care plans adds to your bottom line, it's also nearly certain to add to your frustration level. Here are a couple of scenarios most family physicians know all too well:

• A patient has symptoms of depression. After determining that you're allowed to provide mental health services under the patient's plan, you prescribe an antidepressant — after checking to see which one is on that plan's formulary. To rule out a thyroid condition, you also order some blood work. As they process your order, the staff must check the patient's HMO rule book to ensure that they send the sample to the right lab with the right form.

• Another patient has had intermittent chest pain. You decide to order a cardiac stress test, but you have to ask the nurse, or check the HMO rule book yourself, before you can tell the patient whether you'll send her to another facility or to the treadmill room down the hall. Later, based on the test results, you decide a cardiology consult is in order. Your clerk goes back to the list of participating physicians to verify which cardiologists are approved by the patient's plan. The clerk spends 10 minutes on the phone with the HMO's utilization management (UM) staff getting a preauthorization for the referral. Once the visit is approved, the clerk has to fill out the referral form, ensuring that it's the right form, and send it off to the consultant and the HMO.

These and other managed care hassles are annoying enough for practices that have to keep only a few plans straight. But according to the annual membership census of the Medical Group Management Association (MGMA), physician groups held an average of 16.3 managed care contracts in 1996. With that level of complexity, the challenge becomes not just jumping through hoops but jumping through so many hoops at once.

It's been enough to drive some family physicians to reject all managed care contracts or even to leave practice completely. For example, when FPM asked readers to return response cards describing how they manage multiple plans, almost a third of respondents either lamented the state of medicine under managed care, advocated retirement or a career change, or suggested refusing to work with MCOs completely.

For doctors who find managed care a fact of life, here's some practical help —tips from family physicians and practice management consultants about how to stay on top of your plans' care-related requirements, such as prescribing within formularies, obtaining preauthorizations, referring to other physicians and arranging ancillary services. A companion article in an upcoming issue of FPM will help you manage the administrative hassles of multiple managed care plans, such as reimbursement, credentialing and reviews, verifying patients' eligibility and educating patients about their plans.

Formularies

For many family physicians who work with a number of plans, following drug formularies is their greatest hassle. Part of the problem is the nature of family practice. “We deal with virtually every class of drug,” says Thomas J. Weida, MD, medical director of Penn State Geisinger Health Group in Hershey, Pa., and a member of the FPM Board of Editors. That makes it nearly impossible to remember the agents on specific plans' formularies, and it complicates efforts to organize the information into doctor-friendly formats.

To get a handle on their formularies, many physicians have condensed them into cheat sheets. These take different forms, but one of the most common is a pocket-sized card. If your plans' preferred agents overlap considerably, you may need only to list the most commonly prescribed drug classes and the agents that your plans prefer (or require).

Even if you work with a number of plans, you may be able to summarize their requirements for the most commonly prescribed classes on a pocket-sized card — with a little creative formatting and a good pair of reading glasses. Penn State Geisinger Health Group, for example, has developed a 4×6-inch laminated card that summarizes which agents in these classes are accepted by the eight plans that cover most of the group's patients. (See “A sample formulary cheat sheet.”) Doctors at Prairie Medical Group in Santa Monica, Calif., use a similar system but with a difference they believe avoids undermining patients' trust. Initially, the physicians were expected to ask patients to wait in the exam room while they checked formulary notebooks. Not surprisingly, many physicians didn't take the time, so the group placed formulary summaries in each exam room. Still the requirements weren't followed consistently.

“The doctors felt it was embarrassing and frustrating to stop and show the patient that they were looking something up to make an insurance-driven decision,” says Leonard Fromer, MD, a member of the Prairie Medical Group Board of Directors and a member of the Academy's Commission on Health Care Services (CHCS). “They didn't want to do that in front of the patient. It appeared that the plan dictated the drug when, in fact, the physician still has prescribing choice within each drug class.”

So the group's UM department developed a laminated card to summarize the common requirements in about 10 drug classes among the group's 22 plans. For each class, the card lists the three or four agents most often included on the formularies. The card is kept inside each doctor's leather prescription-pad holder, so the physicians have the necessary information as they write prescriptions. The cards are updated quarterly to keep the doctors up-to-date with formulary changes.

With each plan issuing revisions every few months, prescribing from the “current” formulary can be quite a challenge. “It's a nightmare that never ends because they change all the time,” says Kerry Swindle, MD, a family physician with Arizona Community Physicians in Tucson, which juggles 15 sets of managed care requirements. “I have the formulary books, but I never use them. Unless the patient needs something exotic, I just prescribe from a core group of drugs that's almost universal across the plans.”

The most comprehensive way to stay on top of multiple formulary requirements may well be computerization. With a computerized patient record (CPR) system, precise information about any patient's formulary is only a few clicks or keystrokes away.

For example, with the CPR system he created, Thomas C. Rothe, MD, a family physician who also practices in Tucson, Ariz., can simply enter the patient's condition, and the system displays the appropriate medications as well as which of his six formularies include each agent. Because they're online, the formularies can be updated easily — no cheat sheets to reprint.

To help ease the formulary burden for family physicians, the CHCS is researching these hassles and plans to provide best practices in coping with the worst of them, according to commission members Berdi Safford, MD, a family physician with Ferndale Family Medical Center in Ferndale, Wash., and Charles H. Rodgers, MD, a family physician at Columbia Family Clinic in Little Rock, Ark.

The commission also is in the initial stages of developing a set of principles to guide family physicians in formulary negotiations with managed care organizations (MCOs) — principles that may include limits on formulary revisions, limits on the number of drug classes to be included in a formulary and the need for MCOs to educate plan members about how formularies work. The commission hopes that, ultimately, these principles will be issued by the Academy in collaboration with important players in the insurance industry. If that happens, Safford says, “physicians will be able to take these principles to their plans as a formal statement of what their professional organization, in consultation with major insurers, says the standards for formularies should be.”

Preauthorizations

Formularies are only the tip of the iceberg of care-related hassles. Preauthorization and referral requirements can also mean slow going through the waters of managed care.

Every practice seems to have horror stories about time spent on the phone with UM staff. But given that pre-authorization seems inescapable — at least for now and in most situations — the key to handling it effectively is having the right information.

For Cranberry Family Medicine in Cranberry Township, Pa., the source of most preauthorization headaches was inadequate information from referral specialists. So office manager Cilla Fallon developed two forms that help her and her staff get the information they need.

For an initial referral, the staff uses one form to gather from the referral physician's office the procedures to be performed and their codes, the expected date of service, the name of the referral physician and facility, the type of facility where the procedure will be performed and the expected length of stay. Sometimes Fallon's staff calls the referral physician's office for the information, and sometimes they fax the form to a staff member there. She has also created a similar form for the referral physician's staff to fill out and return when a patient needs services beyond those approved in the initial referral.

Having complete information from the referral physician makes the preauthorization process more efficient because it cuts down on phone time with UM staff. In addition, the forms speed up the process of completing referral paperwork because all the necessary information is in one place. In fact, the practice has negotiated with two of its four plans to accept the forms themselves for referrals.

Although some referral physicans' offices have balked at being asked to provide the information, most have come to see that it's in their interest, too. “It just makes sense to me to have whoever is doing the procedure chose the code so they will get paid properly,” Fallon says.

Another key to efficient preauthorizations is ensuring that your staff knows what each insurer wants to know, says Nancy W. Ashbach, MD, MBA, medical director of Prudential Health Care of Colorado in Denver and a member of the Academy's CHCS. She suggests developing matrices listing the information required by each MCO so your staff can tell at a glance what data they need to have available for each plan's utilization managers.

Referrals

In relatively large practices with high concentrations of managed care, it may make sense to hire a full-time staff member to coordinate referrals. That's the approach taken by Jenkintown Medical Associates in Jenkintown, Pa., which deals with eight major health plans and a number of smaller ones.

“One person in our office has been trained as sort of a referral specialist,” says Scott L. Cohen, DO, a family physician there. “This person has in-depth knowledge of all the managed care plans and the intricacies of generating referrals. In a busy practice such as ours, where we generate 30 to 40 referrals a day, you need one person who can take care of it.”

Or you may need more. With 11 physicians, The Liberty Clinic in Liberty, Mo., has two full-time referral coordinators, in part because the clinic tries to schedule referral appointments before the patient leaves the office. In addition to committing staff to this task to make it run smoothly, the practice has arranged with at least one referral physician's office to block out appointment time twice a week just for The Liberty Clinic's patients. The clinic's referral coordinators set the appointments with patients and fax the schedule to the referral physician's office at the end of the day.

“Family practice is the UPS or Federal Express of medicine,” says Gary Coulter, administrator of The Liberty Clinic. “We provide a high volume of services at a comparatively low charge per unit, so efficiency is vital.”

Even if your practice isn't large enough to hire a full-time referral coordinator, you can take some steps to ease the burden of keeping referral requirements straight. Here are some suggestions:

Try to standardize your plans' referral forms. When family physicians are part of large entities, such as group practices, IPAs or management service organizations (MSOs), the entities' bargaining power with MCOs often means physicians can design their own referral forms and include the right to use them in all their MCO contracts. But even if you're negotiating with MCOs on your own, standardizing referral forms may still be possible.

Darrell Schryver, DPA, an MGMA consultant, suggests combining different plans' forms into one that includes every element requested by any plan. You then propose its use to your various MCOs. “It may not be in the exact format they want, but as long as they have the information they need, oftentimes they will accept it,” he says.

Another possibility may be to have the MCOs themselves develop a standardized form. Ashbach suggests contacting the medical directors of your leading MCOs and simply asking them to create a form that all MCOs in your market will accept. Particularly if your community has a managed care medical directors' organization that can facilitate the collaboration, “it probably doesn't require anything more than just asking them to do it,” she says.

Develop shortcuts for accessing the information you need. This is another area where matrices summarizing your plans' requirements are helpful. For each plan, you might list the approved referral physicians you prefer, approved hospitals and ancillary centers, preauthorization requirements, limits on the number of visits or the time frame for each referral, and how referrals may be submitted.

Of course, each practice must tailor its cheat sheets to meet its own needs. For example, The Family Clinic of Fort Collins in Colorado works with a number of different labs, radiology centers and therapists. To keep straight when and how to interact with each, the practice has developed a matrix and posted it in its office labs, says Steven J. Thorson, MD, a family physician there (see “A matrix for ancillary services”). For 22 plans and sub-plans, the cheat sheet lists abbreviated instructions for processing and billing for blood work, Pap smears, pathology services, radiology services, and physical and occupational therapy.

A similar solution, used in the Department of Family Medicine at the University of Medicine and Dentistry of New Jersey's Robert Wood Johnson Medical School, is a multipage matrix of referral and ancillary service requirements kept in plastic page covers inside binders resembling menus. The binders are hung on the walls outside the exam rooms for easy access. As the requirements of the department's 10 plans change, the matrices are updated and the pages are replaced. “I couldn't survive without it,” says David E. Swee, MD, professor and department chairman.

Another shortcut is to print codes from your information system on each patient's superbill, codes that the staff can use as reminders for referrals. For example, at The Liberty Clinic, each patent's superbill indicates his or her insurance plan, the hospitals and reference labs authorized by that plan and which lists of referral physicians to use.

Staying on top of all the details

If you can develop cheat sheets to guide your referrals, why not create aids to help you see all the hoops you have to jump through? Judging by the experience of a number of family practices, the time it takes to set up and maintain a system is time well spent.

One option is an expanded matrix large enough to cover part of a wall. On it, you can list all your plans and whatever rules you need to have at hand. Your grid is limited only by your imagination and the available wall space (although formulary requirements tend not to fit into even large matrices because of their intricacy).

You can also incorporate other elements into a wall-matrix system. For example, Cynthia Marks, MD, a family physician in solo practice in Newport News, Va., and her staff rely on colored plastic tabs over the name labels on patients' charts. The colors correspond to her 10 primary insurance plans, whose requirements about hospitals, labs, referral physicians, billing and other details are summarized, in color, on wall charts at the front desk, in the medical records room and at the nurses' station.

“Before, we had one person in the office who knew all the information,” Marks says. “But if she was out for a day, then everybody had to go searching for it. This system saves us a lot of time and keeps us from making mistakes like sending someone to the wrong hospital. That can be a costly error as far as the patient is concerned.”

A somewhat more labor-intensive approach is paying off for one Virginia family practice that asked not to be identified. Staff members have created small, color-coded cheat sheets summarizing their plans and subplans. When the charts are pulled for the next day's appointments, a sheet matching each patient's plan is put on his or her chart. That way, any physician, nurse or administrative staff member dealing with the patient has ready access to the details of the plan, as long as the chart is nearby. (See “Check the chart.”) The practice is currently using 20 different sheets, which must be updated regularly as each plan revises its rules.

You can also organize your plans' details on paper with an “insurance journal” like the one developed by Lewerenz Health and Wellness Center in Warren, Mich. For each of its more than 50 plans and subplans, staff members have created a one-page summary, which is updated monthly. They specify which physicians on staff participate in the plan, outline referral and preauthorization requirements, list approved hospitals and labs, and offer general guidance on prescribing (though not abbreviated formularies). They also provide the plan's reimbursement methodology and information about deductibles, co-payments and other billing issues. The journal is kept at the nurses' station, and physicians often refer to it during patient encounters, says practice administrator Kelly Semmelroch.

The journal has helped the staff become more efficient, especially as the practice has taken on more MCO contracts. “The only way you're going to survive in medical practice today is to be on top of your managed care plans and keep the physicians as involved as possible” in working efficiently within their requirements, Semmelroch says.

But the most complete way to organize your plans' requirements is to put them online. For example, from a patient's record in the CPR system that Rothe created, he can access lists of referral specialists, print referral forms, obtain payment and billing information — and much more — in seconds.

Of course, most family physicians can't just create their own CPR systems, and for many the purchase price remains prohibitive — anywhere from $55,000 to $280,000 for an office with eight providers and 40 workstations, according to FPM's recent vendor survey (“Computerized Patient Record Systems: A Survey of 28 Vendors,” November/December 1997, page 45).

Easy as IPA?

The need for state-of-the-art computer systems is just one reason many physicians are looking to various models of integration, such as MSOs, IPAs and physician-hospital organizations (PHOs), for help with managing multiple managed care plans. In addition to delivering economies of scale for major purchases like information systems, they can reduce the hassles of carrying multiple plans, in some cases acting as a practice's agent with its various MCOs.

Fromer's Prairie Medical Group contracts with an MSO (which he helped create) to handle insurance claims, billing and capitation payments, as well as to relieve the burdens of managed care. For example, the MSO consolidates the plans' lists of referral physicians into a collection of matrices organized by specialty. The grids display the referral physicians, their locations, their hospital affiliations and the plans in which they participate. Each Prairie Medical Group physician receives two binders of this information, one for home and one for the office.

The MSO also arranges all home health services, therapy and durable medical equipment for the practice's patients after discharge, following the specific requirements of each plan. This not only relieves the practice's staff of having to know whom to call to arrange which service according to the rules of which insurance plan, Fromer says; it also means he can arrange these services himself at all hours, including weekends and holidays, by paging an MSO nurse on call. “Working with an MSO lets doctors practice with patients, and it gives them efficient delivery of the information they need to do that within a managed care structure,” he says.

A PHO or similar organization can take this idea one step further by removing the need for interaction between the family practice and MCOs. That's the case with Advocate Health Partners in Oak Brook, Ill., an organization connecting eight PHOs, a 250-physician group practice and an integrated delivery system. Advocate generally has succeeded in negotiating delegation of medical management processes from its MCOs.

Advocate negotiates contracts (in which it takes risk from the MCOs) on behalf of its physicians and hospitals, does its own credentialing and site reviews, maintains a single list of referral consultants, conducts its own UM and provides a single referral form. “Our philosophy has been to take the contracts with the external managed care companies and make them all look the same to the physicians, who then just interface with the PHO,” says Lee B. Sacks, MD, Advocate president and a member of the Academy's CHCS. “Generally, the doctors don't know whether a patient is in plan A, B or C.”

Some see this kind of integration as part of the future of family practice generally. As managed care increases its penetration, small groups and solo physicians will increasingly need negotiating clout and help with administrative headaches. “You need to be in some kind of a network that gets contracts for you and manages some of the administrative nightmares,” says Bette A. Wadding-ton, an MGMA consultant.

Schryver agrees. “It just doesn't make any sense today for a solo practice doctor to be out there by himself or herself,” he says, because solo physicians typically have limited negotiating power and can't afford the information systems to do cost accounting, which managed care requires. “It's just critical today to become part of a group, a network or an MSO.”

The best offense is a good defense

Whether you interact with your MCOs directly or work through another organization, the best time to deal with the hassles of multiple plans is before they become problems. The most effective managed care jugglers are those who find ways to limit the numbers of balls they have to keep in the air.

To the extent your local market conditions will allow, Waddington suggests developing criteria for deciding when a managed care contract's potential hassles make it not worth your participation. “Unfortunately, what usually happens is practices see a volume of patients they can get with a contract, and they don't even think about the little things in the contract that can affect their practice,” she says.

According to Rothe, the best way to change bothersome provisions, both before and after the contract is signed, is to show the MCO's medical director how all parties will win as a result of the change you want to make. For example, he has negotiated with some of his plans to accept referral forms and lab slips generated by his CPR system. “You need to point out how everybody benefits: The patients get in and out of the office quickly and with the information they need; I get the work done quickly; the lab gets legible information; and the plan gets legible information that's immediately available,” he says. “So what's the downside?”

If you can't convince your plans to change contract provisions, at least try to negotiate for higher payments to offset the time and frustration those provisions cause. “The key is to figure out how much the hassles of managed care are going to cost you and then work those amounts into your negotiations with the MCOs,” says Roger C. Shenkel, MD, a family physician in Grand Junction, Colo., and a member of the FPM Board of Editors. “Let them pay for it.”

If you think you're annoyed ...

In the end, the greatest benefit you may realize from staying on top of your plans' requirements is maintaining a strong, positive relationship with your patients. They're often the ones who suffer most from the snafus and hassles of managed care: You may not appreciate a call from a pharmacist asking for a prescription change to fit a formulary, but at least you're not the one standing in line at the pharmacy with a cranky 2-year-old. Developing ways to make managed care work better for you will also make it work better for your patients — and help keep them satisfied.