Managed Care
Aaron Liberman, Ph.D.
Overview of Managed Care
Techniques of Managed Care vs.
Organizations Performing
Managed Care Functions
• Techniques
– Financial incentives for providers
– Promotion of wellness
– Early identification of disease
– Patient education
– Self-care
– Utilization management (UR, QI, QM)
Techniques of Managed Care vs.
Organizations Performing
Managed Care Functions
• Organizations
– HMO
– PPO
– EPO
– POS Plan
– Self-Insured & Experience Rated HMO
– Specialty HMO
– Managed Care Overlay to Indemnity Plan
– PHO
Stages of Managed Care
• Early Years: Before 1970
– 1792 Shippers of Boston
– 1910 Western Clinic of Tacoma Wash.
– 1929 Baylor Hospital’s Prepaid Plan
for Teachers (BCBS)
– 1932 AMA Adopts Stand Anti-Prepaid
Group Practices
Stages of Managed Care
• Early Years: Before 1970 (cont.)
– 1937
– 1937
– 1944
– 1947
Kaiser Foundation Health Plans
Group Health Association
HIP of New York
Group Health Coop of Puget
Sound
– 1954 First Individual Practice
Association
Stages of Managed Care
• Early Years: Before 1970 (cont.)
– Trends
• Providers wanted to ensure flow of
patients & revenues
• Employers began using prepaid plans
• Consumers sought access to improved &
affordable healthcare
Stages of Managed Care
• Adolescent Years: 1970-1985
– 1973 HMO Act
– Problems with Federal Legislation
Features of the 1973 HMO Act
• Grants and loans to start HMOs
• State laws against HMOs overridden
• Dual choice provisions
– Indemnity vs. HMO
– Employers with 25+ employees must
offer 2 HMO plans for every indemnity
plan offered
Features of the 1973 HMO Act
• Process to become federally
qualified
– Minimum benefit package
– Adequate provider network
– QA system in place
– Standards of financial stability
– Enrollee grievance system
1973 HMO Act: Importance of
Federal Qualification
• Good Housekeeping Seal
– Use as a marketing tool
• Dual choice = access to employer
market
• Preemption of state insurance
oversight
• Required for receipt of federal
grants
1973 HMO Act: Problems with
Federal Legislation
• Compromise between Liberals &
Conservatives in Congress
– Liberals wanted National Health
Insurance
• Goal was to increase access to those
without access
– Conservatives wanted competition
• Goal was to promote plans which gave
physicians incentives to constrain costs
1973 HMO Act: Problems with
Federal Legislation
• Result of the compromise was an
open enrollment & community rating
system
– HMOs were required to accept all
enrollees without regard to their health
status
– Limited the ability of HMOs to relate
premiums to health status
1973 HMO Act: Problems with
Federal Legislation
• Federal government was slow in
issuing implementation regulations
• Results of regulation attempts =
failures of initial HMOs
Stages of Managed Care
• Coming of Age: 1985-Present
– Innovation
– Maturation
– Restructuring
Innovation
• PHO as a Contracting Vehicle
– Increased negotiating power of providers
• Development of Carve Outs
– Separated the reimbursement of specific
specialized services
• Advances Computer Technology
– Increased efficiency
• i.e. generation of reports, processing of
claims
Maturation
• HMO & PPO growth
– Increased enrollment
• External Quality Oversight
– NCQA (most credible), URAC, AAAHC,
JCAHO
• Report Card System
– Performance measurement systems
• i.e. quality, outcomes, etc.
• Focus on Cost Management
Restructuring
• Interplay between managed care &
delivery system
• Dominance of primary care
physicians
• Consolidation
Health Care Reform
Factors Driving Health Policy
Formation
•
•
•
•
U.S. Budget & Deficit / Surplus
Medicare Trust Fund Shortfall
State Budget Shortfalls
Business Profits & Growth
– Excessive
• Public Demand & Appetite for
Change
Medicare Payment Policies
• Packaged Pricing
– Case rate method = DRGs
– APCs vs. RBRVS
• Risk Based Contracting
– Fixed monthly amount
• Provider Sponsored Organization (PSO)
– Provider-based integrated delivery system
Medicaid Payment Policies
• Medicaid Managed Care Plans
– PCCM
• Summary of Principal Efforts
– Arizona effort
– Virginia effort
Ethics in Managed Care
(Fraud, Abuse & Emergence
of Federal Legislation)
• Relationship to Managed Care
• Who are Managed Care Stakeholders
• Historical Perspective on Federal
Legislation
Historical Perspective: Federal
Legislation
• Hill Burton Act 1946
• First National Mental Health
Commission
• CMHC Acts 1963
• Social Security Act 1965 (PL 89-97)
– Medicare (Title 18)
– Medicaid (Title 19)
Historical Perspective: Federal
Legislation
•
•
•
•
•
•
CHP (PL 89-749)
RMPs (PL 89-239)
PSROs 1972 (PL 92-603)
HMO Act 1973 (PL 92-222)
NHRPD Act 1974 (PL 93-641)
ERISA 1974
Historical Perspective: Federal
Legislation
• OBRA 1981
– Medicare & Medicaid HMOs
• TEFRA 1983
– PPS
– DRGs
• Peer Review Improvement Act 1982
– PSROs
– PROs
Historical Perspective: Federal
Legislation
• DRGs 1985
• COBRA 1985
– Anti-dumping of patients
• HCQIA 1986
– National Health Practitioners Data
Bank
• OBRA 1987
– Nursing home quality care
Historical Perspective: Federal
Legislation
• TEFRA 1988
– Medicare catastrophic coverage
• Expanded Parts A & B
• CLIA 1988
– Lab standards classifying the
complexity of labs
• Medicare Coverage Repeal Act 1989
– Congressional back peddling
Historical Perspective: Federal
Legislation
• OBRA 1989
– Physician Payment Reform
– Resource Based Relative Value Scales
(RBRVS)
• HIPAA 1996
– Portability of coverage
– Restrictions on use of preexisting
condition limits
– Establishment of MSAs
Contemporary Realizations
•
•
•
•
•
•
Limits on material resources
Limits on health expenditures
Limits on life saving devices
Choices must be made
Oregon legislation
Honest business practices required
Compliance: Federal Statutory
Requirements
• Purposes of Compliance Programs
– Detect & prevent violations
– Identify areas of vulnerability
– Reduce vulnerability
Compliance: Federal Statutory
Requirements
• Objectives of Compliance Program
– Decrease risk of culpable actions by
employees
– Reaffirm key organization themes
• Quality
• Superior Service
• Cost effectiveness
– Meet legal & statutory requirements
Compliance: Federal Statutory
Requirements
• Seven Key Steps for Compliance
Programs
– Establish compliance standards &
procedures
– Appoint a Corporate Compliance
Officer
– Delegate discretionary authority
– Monitoring, auditing, & reporting
• Use of employee hot line
Compliance: Federal Statutory
Requirements
• Seven Key Steps for Compliance
Programs (cont.)
– Communicate standards to employees
– Consistent appropriate disciplinary
procedure
– Consistent appropriate responses to
violations
Excesses of Managed Care
Organizations as Reflected in
State Actions to Limit Powers
• 14 States:
•
•
•
•
37 States:
33 States:
20 States:
10 States:
• 13 States:
Guaranteed issue & renewal for
individual insured
Guaranteed I & R group market
Restrict pre-ex limits
Authorized MSAs
Laws increasing consumer access
to ER services
Require range of added services
Excesses of Managed Care
Organizations as Reflected in
State Actions to Limit Powers
• 15 States:
• 17 States:
Prohibit Gag Rules
Direct access to OB/GYNs
What About the Immediate
Future
• Legislation on Patient Bill of Rights
• Personal Responsibility of Insureds
• Individual Ethical Code
Types of Managed Care
Organizations
HMO
• Both an Insurer & a Delivery System
• Primary point of differentiation
among HMOs:
– How the HMO relates to its physicians
HMO
• Staff HMO
– Doctors are employees
• Form a closed panel
– Advantage:
• Easier to control
– Disadvantages:
• Costly & expensive
• Limited choice of doctors
• Productivity problems
HMO
• Group Practice HMO
– Contracts with groups of doctors to
provide all services to members
• Doctors are not employees of the HMO
– Captive vs. Independent Model
• Captive = doctors provide services
exclusively for the HMO
• Independent = doctors provide services
for both HMO & non-HMO patients
HMO
• Group Practice HMO (cont.)
– Advantages:
• Easier to conduct UM
• Lower capital needs than Staff Model
– Disadvantages:
• Limited choice
• Limited locations
• Perception of inferior care
HMO
• Network HMO
– Contracts with more than one practice
to provide services
– Advantage:
• Broader physician participation
– Disadvantage:
• Still limited choice
HMO
• Individual Practice Association (IPA)
– Contracts with an association of doctors
– Advantages:
• Less capital requirements
• Broad choice of doctors
• Marketing advantages
– Disadvantages:
• IPA becomes a de facto union for doctors
• UM is difficult because doctors have
remained in private practice
HMO
• Direct Contract HMO
– Works directly with large number of
doctors
– Advantage:
• Eliminates possibility of physician bargaining
unit by contracting directly with each doctor
– Disadvantages:
• May assume too much financial risk on
behalf of doctors
• Difficult to recruit doctors because no clear
cut leader
PPO
• Common Characteristics of PPOs
– Select provider panel
– Negotiated payment rates
• Typically discounted 20-60%
– Rapid payment terms
– Utilization management
• Failure to comply with plan requirements =
financial penalty to physician
– Consumer Choice
• Higher cost sharing if choose non-panel
physician or hospital
PPO
• Advantages:
– Independence of providers &
consumers
– Flexibility of plan
• Disadvantages:
– Little cost control
– Lack of provider concern for fiscal
integrity of purchaser
EPO
• Like PPO except patients may only
use panel providers
• Advantage:
– Control over provider behavior
• Disadvantages:
– Potentially greater liability exposure
for EPO
– Disaffection of plan providers
POS Plans
• Uses primary care physician as
gatekeeper
• Primary care physicians are
capitated
• Withhold is prominently used
• Member can use non-panel provider
but will pay much higher deductible
POS Plans
• Advantage:
– Choice accorded patients
• Disadvantages:
– Added cost to patients
– Lack of cost & underwriting control for
POS Plan
Self-Insured & Experience
Rated HMOs
• Fixed payments for period of time
• Followed by a settlement process
• Advantage:
– Significant cost control
• Disadvantages:
– Failure to reserve for IBNR
– Failure to underwrite conservatively
– Uncontrolled aggregate losses
Specialty HMOs
• Dental & Vision
• Also called Single Specialty HMOs
• Advantage:
– Low cost
• Disadvantages:
– Generally disinterested providers
– Poor quality care
Managed Care Overlays
• Utilization management for general
& specialty services
• Large case management for shock
loss
• WCN utilization management
PHO
• Simple vs. complex PHOs
• Advantages:
– Greater negotiating clout
– Provided vehicle for risk sharing
– Clearinghouse for credentialling &
utilization management
– Organized approach for physicians &
hospitals to work together
PHO
• Problems:
– Difficulty competing against large
MCOs
– Large MCO making money with
utilization management & do not want
to capitate as way of laying off risk to
PHO while UM is profitable
Integrated Healthcare
Delivery Systems
(IDS)
Three Categories of IDS
• Only physicians are integrated
– Individual Practice Association
– Physician Practice Management
Organization
– Group Practice Without Walls
– Consolidated Medical Group
Three Categories of IDS
• Physician & hospital integration
– Physician Hospital Organization
– MSOs
– Foundation Model
– Physician Ownership Model
– Virtual Integration
• Full integration of physicians,
hospitals, & insurance
Individual Practice Association
(IPA)
• Negotiates fees on behalf of
members
• Advantages:
– Greater ability to share risk than PHO
– Easily understood
– Requires less startup capital
– Greater motivation to participating
physicians
Individual Practice Association
(IPA)
• Disadvantages:
– Unwieldy
– Unable to change physician behavior
– Cannot accept high degree of risk
without being classified as an
insurance company & without having
to be licensed
– Too many specialists creates upward
utilization & cost pressures
Physician Practice
Management Organization
• Provides management of all support
services
• Advantages:
– Purchasing power
– Specialists in managing practices
– Provide greater sense of ownership
Physician Practice
Management Organization
• Disadvantages:
– Too often focused on the next deal
• e.g. Phycor, Medpartners
– Not always engaged fully in essentials
of the business
Group Practice Without Walls
• Leverages negotiating strength with
MCOs & hospitals
• Key Advantage:
– Income is a function of group
performance
• Key Disadvantage:
– Physicians remain as independent
practitioners
Consolidated Medical Group
• True group practice with income
sharing
• Advantages:
– Economies of scale
– Negotiating leverage
– Can actually influence physician
behavior
– Investment required of physicians
serves as an exit barrier
Consolidated Medical Group
• Disadvantages:
– Inflated opinion of worth
– Rigid & unable to change
– Utilization patterns reflecting overhead
pressures on group
Physician Hospital
Organization (PHO)
• Actively manages relationship of
principals
– Ownership should be equally balanced
between physicians & hospitals
Physician Hospital
Organization (PHO)
• Advantage:
– Can negotiate effectively on behalf of
principals
• Disadvantage:
– Often fails to achieve needed
improvements in contracts
Management Service
Organizations (MSOs)
• Service bureau
• Advantage:
– Binds physician closer to hospital
• Disadvantage:
– Physician remains too independent
Foundation Model
• Can either own provider
organizations or contract for services
• Governed by Board & not dominated
by any provider group
• Advantages:
– High level of structural integration
– Exerts considerable influence over
providers
– Has resources to recruit & compensate
needed providers
Foundation Model
• Disadvantages:
– Primary: physicians only linked
indirectly to mission of Foundation
– Conflicts frequently occur between
Foundation & providers
– Non-profit status of Foundation
• Must constantly prove it is a benefit
to community to retain non-profit
status
Physician Ownership Model
• Physicians hold significant portion of
ownership
• Functions like an MSO & a Staff
Model HMO
• Advantage:
– Total alignment of goals of the group &
the IDS
• Disadvantage:
– Amount of resources required to
develop & operate the system
Virtual Integration
• Independent parties pretending to
be integrated to maximize
reimbursement potential
• Advantage:
– “Virtually” none
• Disadvantage:
– Conflicts & dishonesty
– “Virtually” non-existent relationship
Assuming An Insurance
Function
• IDS becomes both a provider & a
licensed payer (insurer)
• Can employ capitation &/or
negotiated rates
• Advantage:
– “One stop shopping”
Assuming An Insurance
Function
• Disadvantage:
– May not possess insurance experience
• Potentially disastrous
– Anti-trust implications
– Must maintain licensure
– Regulated by State Government’s
Insurance Department
Medical Practice Organization
Integration Potentials
TYPE OF PRACTICE
INTEGRATION
POTENTIAL
Individual Practice
Individual Practice w/Shared Overhead
PPO
IPA
PHO
Group Practice w/o Walls
Single Specialty Group
Multi-Specialty Group
Practice Management Association
None
Partial
Partial
Partial
Partial
Partial
Full
Full
Full
Governance & Management
Control
Functions of the Governing
Board
• Stakeholder v. Shareholder
• Fiduciary Duty of For-Profit vs. Not
For Profit Governing Board
– The Stern Case (1963)
• Board members diverted hospital funds to
finance their own business venture
– Duty of trust
• Not for profit governing board has a
higher duty of trust
Functions of the Governing
Board
• Special duties of MCO governance
– Quality management
– Employment of CEO
Functions of the Governing
Board
• Essential committee functions
– Operations
– Personnel
– Planning
– CQI
– Compliance
– Pharmacy & therapeutics
• Liability Exposures of MCOs
Primary Care In Open &
Closed Panel Plans
Definition of Primary Care
•
•
•
•
Internal medicine
Family practice
Pediatrics
OB/GYN
– Represents a hybrid between primary
& specialty care
Sources of Candidates for
Open & Closed Panel Plans
• Personal Relationships
• Physicians with privileges at panel
authorized hospitals
• Physicians working for competitors
• Local/County Medical Society
Sources of Candidates for
Open & Closed Panel Plans
• Yellow Pages
• Health Claims Data to Eliminate
Docs With Undesirable Traits
–i.e. overbilling, double billing,
excess billings
Types of Contracting
Situations
• Individual Physician
– Most common in open panels
– Advantages:
• Direct relationship with physicians
• Loss of 1 physician not consequential
Types of Contracting
Situations
• Small Group
– Advantage:
• Efforts net multiples of physicians
– Disadvantage:
• Ending relationship costs multiple losses
of physicians
–Particularly sticky with groups having
several competent physicians & 1
incompetent physician
Types of Contracting
Situations
• Multi Specialty
– Advantage:
• Obtain expertise in several areas
– Disadvantage:
• Costs of retaining usually high
Types of Contracting
Situations
• Individual Practice Association
– Advantage:
• Large number of physicians can be
secured in one effort
– Disadvantages:
• Functions as a bargaining unit
• Often have to accept some less adequate
physicians
Types of Contracting
Situations
• IDS
– Advantage:
• Have network in rapid order
– Disadvantage:
• Goals of physicians often not consistent
with IDS
Types of Contracting
Situations
• Medical School Faculty Practice
Plans
– Advantage:
• Practice top quality medicine
– Disadvantages:
• Less cost effective
• Use of interns, residents, & medical
students
• Not adept at case management
Reasons For Dissatisfaction Of
Physicians In Open & Closed
Panel Plans
• Autonomy Issues
• Stress of dealing with demanding
Patients
• High demands for productivity
• On-call requirements
• Spousal unhappiness
Reasons for Removing
Physicians From Panels
• Physician unable to work within
system
• Panel too large
• Costly practice style
• Practices poor medicine
Compensation of
Physicians
Reasons To Capitate
• From standpoint of MCO
– Puts physician at risk
• Most powerful reason
– Eliminates FFS incentive to overutilize
– Easier & less costly to administer
Reasons To Capitate
• From standpoint of provider
– Ensures cash flow
• Most powerful reason
– Profit margin under capitation often
greater
– Eliminates fee disagreements
Problems With Capitation
• Adverse selection
– Most common problem
• Perception that capitation income is
“passive income”
• Inappropriate underutilization
Determination Of Fees
• Percentage of usual, customary, &
reasonable rates
– Advantage:
• Easy to obtain
– Disadvantage:
• Physicians can greater fees by same
percent
• Relative Value Scales
• Global Fees
Determination Of Fees
• APGs/APCs
• FFS
– Losing ground due to churning &
upcoding
Determination Of Fees
• Incentives
– Bonus based on production
• Most common method
– Advantages:
• Rewards productive physician
• Helps modify bad habits
• Documents low productive capacity
– Disadvantages:
• Illegal & unethical behavior (churning,
buffing, turfing, upcoding, phantom billing,
unbundling)
Contracting With Hospitals
Types of Reimbursement
Arrangements
•
•
•
•
•
% of charges
Discounts
Per Diems
Sliding Scales
Differential as a function of # of days
in hospital
• DRGs
Types of Reimbursement
Arrangements
• Service type differential
– Simple vs. Complex
•
•
•
•
Case Rates
Capitation
% of premium revenue
Bed leasing
– Distinct part
Types of Reimbursement
Arrangements
• Periodic Interim payments
• Performance based incentives
– Withholds
– Quality incentives
• Outpatient procedures
– APGs/APCs
– Bundled rates
– Discounts
Managed Care in Academic
Health Centers
External Challenges To
Academic Health Centers
• Changes in market mechanisms
– Managed care has rendered AHCs noncompetitive
– PPS (DRGs) has cut into revenue base
• Employers now select health plans as
a function of cost
External Challenges To
Academic Health Centers
• Diminished revenues as a function
of failed health reform in 1993
• Loss of federal support for
residency training
Internal Challenges To AHCs
• Traditional culture
– Physician is main focus which is at
odds with managed care which
emphasizes extenders
– AHCs de-emphasize primary care
– AHCs are contra-positioned to
outcomes-based treatment decisions
– AHCs do not emphasize sound
business practices
– “Quality” patient care is a battle cry
Internal Challenges To AHCs
• Transition market
– AHCs see themselves as a revenue
producer
– Manage care sees AHCs as a cost
center
Internal Challenges To AHCs
• Information structure
– Dearth of contemporary cost
information is a barrier to
competitiveness
– Cannot assume financial risk because
costs largely are not controlled
Learning From The Few
Successful AHCs
• Must find ways to maintain patient
base
– Network with non-academic hospitals
– Develop cost effective primary care
programs
– Tie specialty services as support to
primary care
Learning From The Few
Successful AHCs
• Transform traditional culture
– Physicians must be held accountable
– Identify & compete for funding streams
– Centralize capital allocations
• Autonomy failed
– Develop outcomes based treatment
Learning From The Few
Successful AHCs
• Reestablish education & research
– Maintain cost effectiveness as a
requirement
– Network with MCOs
• Linking point could be outcomes research
• Tertiary care
Learning From The Few
Successful AHCs
• Reestablish education & research
(cont.)
– Network with traditional health
insurance carriers
• Development competitive treatment
programs
• Form specialty treatment networks
Managing Basic MedicalSurgical Utilization
Purpose of Managed Care
Manage utilization & thereby reduce
health care costs
Methods To Achieve Control Of
Physician Services
• Single visit authorizations
• Prohibit secondary referrals &
authorizations
• Review reasons for referrals
• Control self referrals by plan
members
Methods To Achieve Control Of
Physician Services
• LCM by specialty physicians
– LCM process & relationship to specific
stop loss
• Compensation & financial incentives
for specialists
Methods Of Decreasing
Utilization
• Precertification
– Notice to concurrent review system
case occurring
– Ensure care occurs in most
appropriate setting
– Capture data for financial accruals
• Preadmission testing & same day
surgery
Methods Of Decreasing
Utilization
• Concurrent review
– UM nurse: case manager
– Primary care physician
– Hospitalier
• Retrospective review
– After case is concluded
Methods Of Decreasing
Utilization
• Alternatives to acute care
hospitalization
– SNF
– Intermediate Nursing Facility
– Subacute Facility
Disease Management
Goals of DM
•
•
•
•
Control cost of care per episode
Reduce morbidity
Improve functional status of patient
Improve patient & physician
satisfaction
• Acquire more meaningful outcome
data
Goals of DM
• Develop improved ability to accept
financial risk
• Control cost
Candidates for DM
•
•
•
•
•
•
•
Asthma
Diabetes (Type 1)
AIDS
CA
Behavioral care
ESRD
Hypertension
Steps In The Start Up Process
For DM
• Prioritize disease selection
– Benchmarking
• Flowchart care processes
– Case finding & preventive efforts
– Education & morbidity reduction
– Management of emergencies
– Hospitalization
– Ambulatory care follow-up
Steps In The Start Up Process
For DM
• Determine patient needs &
preferences
• Discover cost drivers
– Benchmarking
• Identify clinical outcome measures
– Benchmarking
Steps In The Start Up Process
For DM
• Conduct value optimization studies
to document evidence
– Benchmarking
• Prepare for major information
system investment
• Define episode duration
– Benchmarking
Steps In The Start Up Process
For DM
• Use data to motivate & train
physicians
– Benchmarking
• Restructure financial incentives for
physicians as deemed appropriate
Managing Utilization of
Emergency & Ancillary
Services
Two Types Of Ancillary
Services
• Diagnostic
• Therapeutic
Emergency Services
• Importance of emergency room
services to a hospital
Managed Behavioral Care
Services
Special Challenges Posed by
BCS
• Destigmatization
– #1 on most lists
• Erosion of Social Support System
• Increased Societal Complexity &
Stress
• Advances in Medication & Psychotherapeutic Methods
Special Challenges Posed by
BCS
• Proliferation of Private Hospitals
• Tightening of Public Sector BCS
Funding
• Use of BCS for Personal
Development
4 Key Principles of Clinical
Treatment
• Finding Alternatives to Psychiatric
Hospitalization
– PHP (day, night, & weekend programs)
• Finding Alternatives to Restrictive
Treatment of Substance Abuse
– PHP & intensive outpatient care
Key Principles of Clinical
Treatment
• Goal Directed Psychotherapy
– Cognitive therapy
• Crisis Intervention
– EAP
Key Services in Community
Based Programs
• Acute inpatient services
• Outpatient therapy services
– Non-physician directed
• Day treatment services
– Also evenings & weekends
• Emergency services
– Triage & referral
Key Services in Community
Based Programs
• Medication clinics
– Physician directed
• Halfway (3/4) house residential
services
Key Risk Determinants
• Sufficiency of information
• Extent of services demand
– Degree of chronicity
• Large claim risk factors
– Adverse selection of group
Major Risk Factors In BCS
Capitation
• Restricted access = underservice
• Cost shifting
– From BCS to medical
• Preparedness to handle capitated
care model
– Case management
• Lack or insufficiency of information
– Ill-prepared for capitation
• Substandard quality of care
Method Of Developing BCS
Provider Network
• Establish size & scope of network
• Assess & determine fees &
reimbursement rates
• Identify targeted providers
• Contact providers
• Obtain needed biographical
information via applications
Method Of Developing BCS
Provider Network
• Conduct site visits & interviews
• Select providers for network
Emerging Issues In BCS
• Horizontal integration to achieve
comprehensive service structure
• Develop data to validate service
necessity
• Legal & ethical values must be
established
• Control of costs is essential to
acceptance
Emerging Issues In BCS
• Financial incentives adjusted to
promote cost effective & quality
services
• Services accessible to persons of all
cultures