Many healthcare organizations are currently undergoing a transformation from fee for service to flat rate payments as they evolve into Managed Care Organizations, but the path to becoming a MCO can be paved with difficulties from a financial, HR, and operational perspective.  Here is a quick list of “lessons learned” that Managed Care Organizations should consider during their transition. Let’s discuss the concept of the provider network.

Provider Network

Managed Care Organizations often transfer from an “open” provider network, to a “closed” provider network.  In an “open” network, care is authorized to be provided by any provider who is willing and able to provide the care.  In a closed network, only those providers who have contracted with a Managed Care Organization will be authorized and paid by that organization to provide care.  Managed Care Organizations establishing a provider network can expect a large scale change involving processes such as applications, credentialing, and contracting which can all take time.  Consider the following when developing a provider network:

  • The application process is very time consuming.  Any organization making the transition to a Managed Care Organization should begin their provider application process as early as possible.  The MCO should establish timelines for actions to occur, and define when it will change strategies for obtaining applications.
  • Provider communication is essential for this process.  The MCO should begin communicating with potential providers as early in the process as feasible.  An open line of communication should be maintained throughout the process, so that Providers are well informed of deadlines and stipulations.  MCOs should consider providing automated updates, or having a dedicated online resource for the dissemination of information to providers.
  • In addition to communicating with Providers, the MCO should conduct internal research to identify key providers.  For
    Several small houses with red roofs connected with blue dotted lines to blue figures. Are you looking to learn more about the concept of provider network?

    Are you looking to learn more about the concept of provider network?

    instance, is there one provider that most of your consumers utilize for a specific service?  If so they you should ensure that you reach out to this provider early in the process so that they are included in the network.  Is there a specific service that only a few providers deliver?  Make sure that your service coverage and your provider network will be aligned.

  • Once the application process is complete, contracting can begin.  Again, this can be a cumbersome process with a long time delay.  Make sure that contracts are routed to providers as soon as the application process is complete.  Don’t make providers wait for a contract, as this can cause a ripple effect of uncertainty
  • Once a provider is contracted, they must also be credentialed.  If your organization is doing in-house credentialing, expect to dedicate resources for accomplishing this task.  Make sure that internal staff are knowledgeable about what is required throughout the credentialing process, and that the guidelines they are utilizing are cross checked against contract standards as well as accreditation requirements.
  • Consider outsourcing the credentialing process.  Many newly formed Managed Care Organizations have not had to take ownership of the credentialing process previously.  It can be more time and cost efficient to outsource this aspect of creating a provider network, rather than creating an in-house credentialing division.

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