Finding the “Backdoor” into Payer Networks

By Steve Selbst bio

 I am delighted to be able to share with you a key “secret to success” about payer contracting. Today’s article is about getting in the “backdoor” with payers and complementing your payer network by building your patient/customer base.

In my journey navigating tens of thousands of payer contracts’ negotiations, it has become clear to me that there are times when a payer will close its network to certain provider types, based on its network need. Don’t despair; there are other “paths to Oz.”  Certainly, there are ways to build value propositions and ways to escalate up the payer management chain. These are topics for another day. Today, we’ll talk about an even easier to implement alternative: complementary payers!

Complementary payers

What is a complementary payer? Looking at the triangle/ diagram at the bottom, we see there are Complementary Primary Payers (middle layer) and Complementary Secondary Payers (bottom layer). Further, there are insurers in the middle layer and re-pricers.

Let’s do a deeper dive. When you get stuck and find that you cannot get into a payer’s network, you can pursue a combination of primary complementary payer and secondary complementary payer agreements. The re-pricer (primary complementary payer) is not a payer (health insurance company). Instead, it is an intermediary network that provides access to typically several hundred, or more, payers, TPAs, IPAs, self-insured employer groups and ACOs, usually both nationwide and in each state. The benefit to this kind of agreement is that you will get uniform reimbursement terms commensurate with usual PPO benefits where a payer will normally cover around 80 percent of the reimbursement and the patient covers around 20%. The claims will need to be authorized with each insurance company and will get paid, accordingly, by each insurance company. Therefore, the re-pricer provides you broad network access to a range of payers.
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What about risk?

Let’s assume that, down the road you get a direct commercial payer agreement, either nationally or in a specific state(s). At that point, which agreement will take precedence and how do you manage it? The neat thing about a complementary re-pricer is that, if/when you consummate a primary payer relationship, that relationship almost always takes precedence over your complementary payer relationship. Very cool! Therefore, there is usually no risk to locking yourself out of commercial payer contracting opportunities by invoking these relationships. However, you will want to cross-compare your complementary payer relationships to determine entities/payers that participate in more than one such plan and, therefore, make sure that you negotiate reasonable price parity across these kinds of agreements. Also, remember you must adjudicate your claims with each entity / payer that the complementary payer is connected to via its leased network.

What about out-of-network patient opportunities?

That brings us to the bottom layer of the triangle: the complementary secondary payer. This is also a leased network that connects to a broad range of payers, like the primary complementary payers do, except that these secondary complementary payers will typically reimburse you at a high percentage of local Medicare rates or a high percentage of your billed charges. In this case, the coverage is for payers’ beneficiaries/patients with out-of-network benefits. You will need to balance bill patients a higher percentage of the reimbursement, as you normally do, for out-of-network benefits. These agreements are a great way to expand your patient/customer access for out-of-network business. If you can achieve excellent collections outcomes by billing patients and working with payers directly, then this kind of agreement may not be attractive. However, often you will be able to attain higher volumes of patients using this method of contracting and, today, many payers use these leased networks only for their out-of-network reimbursement. It is not uncommon for the contracted rates on these agreements to be a very high percentage of billed charges, 80 percent or more.

Other opportunities

There are also other potential contracting opportunities—IPAs, the VA, Active Military/Retired Military, Medi-Medi Plans, and other complementary networks. In this case, the entities that you contract with are with payers who provide direct network access to their beneficiaries/patients. Depending on which part of the country you are in, there are two commercial payers currently in play to get you contracted to be reimbursed for servicing military patients and their families. There are a wide variety of “Medi-Medi” (Medicare/Medicaid) plans that can be used to complement your commercial plans, often product lines that are contracted with the same named payers that you are or would contract with. Last, but very definitely, not least, is the IPA opportunity. There are many different IPAs (Independent Practice Associations), in different regions. Some are focused on certain physician specialties and some having nothing to do with physician specialties and are designed to contract for specialty providers like DME providers/distributors. IPAs offer the opportunity to “opt in” or opt out of HMO and / or PPO contracts at set rates that have been contracted for all provider members of the IPA. This is a great option when you are seeking to get contracted in a region where large payer networks are closed but those same payers are also IPA members. You can then enroll in the IPA and “opt in” to the networks that make sense for your company or practice.

So, next time the door closes when you try to get contracted, consider taking one of the approaches described in this article to get into the backdoor. Who are these payers and how do you get contracted?