rent FFS systems can be better managed with a more robust reimbursement capability.


What must health plans do to operate with greater efficiency? For a health plan to be competitive, effective network man- agement must be considered not only a core competency but a competitive differentiator. Tis requires that the four critical functions of network management — provider information management, network design, contracting and reimbursement — be managed at optimal levels and automated as much as possible. For example, plans must have a single source of truth when it comes to provider information, plus the tools to manage this information efficiently. In most health plans, provider data is collected and maintained by various siloed departments. Infor- mation can overlap or contradict each other, some departments can have more than others, and information sharing requires an email or phone call rather than direct access to a single system. Errors and inefficiency are hard to avoid. However, more effective management of costs comes through an ac- tive and intelligent understanding of the providers in a plan’s network — not just who those providers are, but what they do well, and their business relationships with other providers. Tis requires a single source of truth. Health plans also struggle with designing and administering custom and innovative networks for their clients. As a result, some only allow these for their strategic accounts, risking the


loss of business to competitors. Health plans must be able to design networks that can deliver the optimal clinical and finan- cial results for certain members or conditions while also reining in costs, and they must do so across their member population. Ideally, benefit-based member incentives are designed to sup- port steerage to these custom networks. Contracts with those providers are too complex to man- age effectively without automation to trigger incentives, track performance, and create a built-in optimization loop. For reimbursement to be effective, a health plan must be able to manage complex contracting with transparency, scalability and automation. By integrating a contract management system with its claims system, a health plan can adjudicate for value while still accommodating FFS payments. Finally, reimbursement policies must be aligned to sup-


port the networks’ goals. Increasingly today, we’re seeing a lot of experimentation with innovative payment initiatives such as value-based reimbursements, pay-for-performance, and bundled payments. While such innovative models are possible in small pilots with close oversight and a lot of manual process- ing, bringing them to scale across a number of networks will be too complex and difficult without automation. In the third and final part of this series, we’ll talk about how to build on this foundation of “getting the basics right” — in other words, once you have these functions operating at peak efficiency, what’s next? What can you achieve when you start to integrate these functions?


HMT


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