HRCs' response to HMO National chains: " take a hike "'
we expect to terminate a number of existing
national and regional contracts with unfavorable pricing
and to seek to renegotiate new contracts
in local markets.
TA
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From
CBS Marketwatch:
marketwatch.newsalert.com
HEALTHSOUTH Tables Spin-Off Proposal, Resumes
Share Buyback, Comments on Operations
PR Newswire - September 09, 1999 16:45
*Managed Care Strategies:
HEALTHSOUTH announced a series of new initiatives to respond
to issues in managed care reimbursement.
The company is in the process of completing a project
with a major software solutions vendor that is designed to integrate the company's managed care
contract database with its patient accounting systems in order to more accurately capture
appropriate charges without repeated manual review of contracts.
- is also seeking appropriate increases in managed care rates,
-announced its intention to terminate certain
national and regional contracts providing inadequate reimbursement.
- it would increase its focus on local managed care contracting and administration, in
order to better capitalize on its strengths in particular local markets.
"Like all providers, we face the increasing burdens of paperwork and administration
arbitrarily imposed by many payors," said Scrushy. "Further, while we have been very successful in
obtaining national and regional contracts with major payors, we have found that those payors'
systems frequently are not up to the task of effectively managing reimbursement on a national or
regional level. In the recent past, we have seen many payors merge, and we have seen many
payors offer a variety of new product lines. Frequently, those payors have tried to force us to take
the lowest pricing we have agreed to in any contract, even under contracts with different terms.
In addition, while our national contracting strategy has been very effective in enabling us to
expand our network to all 50 states and develop the leading brand identity in healthcare, we have
now determined that national and regional pricing is holding us back from realizing the full benefit
of our market penetration in key local markets."
Scrushy continued,
"In light of these factors, we will be redirecting our focus to local
market-based managed care contracting.
We believe that this will enable us to utilize the full strength of our
Integrated Service Model in markets where we have the best penetration,
while simultaneously
reducing the administrative burden associated with claims processing issues that
arise under national contracts.
In that connection, we expect to terminate a number of existing
national and regional contracts with unfavorable pricing and to seek to renegotiate new contracts
in local markets.
While we expect that this will have a negative impact on patient volumes and
revenues in the near term, we believe that it is the long-term strategy that represents the next
stage in the evolution of managed care relationships."
And Scrushy's response to disastrous computer systems in HMOs:
The plan will encompass technology upgrades for the company's outpatient
surgery centers and diagnostic centers, expenditures for facility upgrades, maintenance and
expansion in all lines of business, improvements to the company's management information
systems and billing and collection systems, and expenditures for other capital items.
Included in the plan is the roll-out in the outpatient division of the
company's HCAP (HEALTHSOUTH Clinical Automation Program) system, a paperless system
that will allow for real-time paperless patient charting and the integration of clinical
documentation, outcomes data collection and charge processing through a central server. |
