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Hanger’s MCO: Where Is It Going?
By Miki Fairley The recent launch of Hanger Orthopedic Group's new
managed care organization (MCO), Linkia, in mid-March has added a
potent new element to the O&P scene. Where is Linkia headed?
What are its goals and objectives?
In an interview with The O&P EDGE, President and
COO Michael Murphy and Martin Payne, vice president of Business
Development and Client Relations, discussed the new company.
What emerges are several facets, including short-term goals and
long-term objectives. In the process, Linkia is taking on some
ambitious initiatives, including tackling some long-standing
challenges in the O&P field--which may help turn back the tide
of downward reimbursement levels.
Linkia has two basic components, according to Murphy: 1) serving
as an administrative interface between the payer and provider; and
2) coordinating care management.
Electronic Storefront
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Michael Murphy |
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"It serves as an electronic storefront that cleans
up the interface to benefit both payer and provider," Murphy said.
"O&P companies don't have to worry about 20 or more phone
numbers and addresses; they just need one--and they enjoy shorter
remittance cycles." Linkia also will provide services such as
verifying eligibility, obtaining prior authorizations, checking
status of claims, and accessing provider manuals, via customer
service professionals who understand both O&P and payer
requirements.
"From the payer perspective, what they see in O&P is largely
disorganized, with myriads of contracts and fee schedules--lots of
paper flying around," Murphy continued. "With Linkia, they just
need one phone number and address, with claims submitted
electronically, adjudicated by the payer, and remittance returned
electronically.
"Although it has an administrative front end, it is first and
foremost modeled after a classic MCO that is clinically driven,"
Murphy explained. "So, all its activities are related to care
management; even customer service will be driven by clinicians.
Certified prosthetists and orthotists, physicians, and other
healthcare professionals will work together to oversee the
activities of Linkia to ensure that it is patient-centered,
provider-friendly, and collaborative with payers, so that there is
total quality management from both a quality-of-care and a
quality-of-service perspective."
Separating O&P From DME
One challenge Linkia is taking on is the problem of separating
O&P from durable medical equipment in the minds of insurance
companies and other payers. "Our objective right now is to change
the dialog and educational awareness between payers and the O&P
profession," Murphy said. "The profession has been viewed as
ensconced in the DME space, which is being subjected to dramatic
reductions in reimbursement. Payers perceive that space to be
largely a commodity space. Since they don't see discernible
differences between one walker and another, they want volume buying
and reduced price. In O&P, we are more clinical; driven by the
practitioner's skills more than the actual componentry being used.
Understanding this factor is critical in arriving at fair levels of
reimbursement."
Murphy also discussed the materials aspect, since O&P
devices don't fall into the same economies of scale that payers
receive when they buy medical supply commodities. "We've had some
success in educating them about this, so that there is a fair
trade-off between their expectations of what the volume should be
vis-ŕ-vis any fee discounting we would offer them."
But when Medicare fee schedules get frozen for three years, "The
private payers take note and say, Aha! We see something here; we're
going to jump onboard as well," Murphy noted.
Creating Evidence-Based Care Pathways
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Martin Payne |
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The other big challenge is the lack of sufficient
data which demonstrates scientifically the effect O&P has on
the rehabilitation continuum--a factor which can affect
reimbursement levels. "We are trying to get away from a system
where everything over a certain dollar amount needs prior
authorization, by creating evidence-based treatment criteria for
specific conditions and diseases and guiding professionals into
treatment pathways," Payne said. "To develop these evidence-based
medical pathways, outcomes data are needed. And here is where a
comprehensive, long-term initiative comes in.
"The good news is that payers understand that getting to the
point of scientifically validating our care takes years," Murphy
said. "They understand that we're not saying, for instance, that in
three months we're going to have a definitive outcomes study that
proves the long-term benefits of stance control orthoses on the CVA
[cerebrovascular accident] patient. What we are committing to is to
co-author with our clients and the profession how to get to that
level of discipline and prove beyond a shadow of a doubt what the
profession's role is as a clinical discipline, apart from a
provider or distributor of componentry.
"The O&P profession can't withstand more sharp cuts in
reimbursement and survive as a profession," Murphy continued. "And
neither payer nor provider can stand the administrative costs of
micromanaging utilization.
"The world has gone to retrospective review, establishing
patient outcomes and clinical pathways and checking on the back end
to ensure there is appropriate utilization," he said. "If we don't
get in front of this and co-author outcomes studies and
evidence-based care pathways, we're facing more dramatic reductions
in reimbursement levels. Payers are at the point of saying, If you
want to do X up to point Y, we'll pay for it. If you want to go
beyond that, fine--the patient will pay for it.' That fundamentally
changes the dynamic for the profession.
"What we're looking to do on the utilization side is establish
an element of trust, avoiding prior authorizations based on dollar
amounts," he continued. "Prior authorizations and medical necessity
reviews would be needed only for cases outside the medical
guidelines. Those guidelines would be determined through science;
thus we preserve the relationship between the payer and the
profession."
Data Mining for Outcomes Evidence
To start creating clinical care pathways, Linkia is looking to
data mining in collaboration with its payer clients. "When you
consider the millions of data points they have, we can track a
certain disease or condition and prosthetic/orthotic use. For
instance, we can track levels of amputation; whether they did or
didn't receive a prosthesis; what kind of prosthesis and three
years later, how have they adjusted, etc." Data mining will help
steer us, Murphy explained. "For instance, what if the data show
that not enough patients are getting prostheses--then a utilization
increase strategy is called for. It's not always about reducing
usage levels. Another example could be data indicating that getting
a prosthesis early on results in better outcomes," he added.
Payne noted that data could show extrinsic benefits from O&P
care--how it impacts patient behaviors in other areas, such as
nursing home usage and other aspects of their lives. This could be
a cornerstone in developing care pathways, he pointed out.
Linkia's first major national contract is with United
HealthCare, headquartered in Minnetonka, Minnesota. Collaborating
with large national insurers with millions of covered lives opens
the door to comprehensive data mining opportunities in developing
care pathways.
"As a storefront, Linkia will be a functional data warehouse,"
Murphy noted. "The first point is access to data. We'll start to
crosswalk this total patient function data with specific O&P
data to start some pretty exciting modeling around O&P patient
outcomes data."
Contracting with Payers
Linkia also performs the typical network service of obtaining
contracts and administering them. "Essentially, what we do is sit
down with a payer and help them design their O&P strategy and
offer them a wide range of solutions," Murphy explained.
Strategies are tailored to the payer's requirements. For instance,
in one case, Linkia may not own the contracts; the payer does, and
Linkia serves as an administrator. Another payer may want to
outsource everything and have Linkia run the contracts. They tell
Linkia the network strategy that they want to execute. Linkia then
lines up providers, which can include independents as well as
Hanger and OPNET members. "There are not enough Hanger and OPNET
facilities to provide what some payers want, so we are expecting a
fairly robust network," Murphy said. Depending on a payer's network
strategy, such as geographic coverage, there might be a combination
of Hanger and independent practices.
Linkia is separate from Hanger Prosthetics & Orthotics,
which is one of its network customers, Murphy noted. "An
independent would get the same level of resources and treatment.
Currently we plan to set a single national fee schedule [with each
payer], then as claims are adjudicated, we would reprice the claim
at the back end to a more regional fee schedule, taking off an
administrative fee."
What's Planned Ahead
In the next three to five months from the time of this interview
(mid-May), Linkia plans to have full scaleability to accomplish
many, if not most, transactions electronically rather than
manually. "We're building our health services infrastructure and
beginning to pour the foundation on some of our quality management
initiatives. These will include quite a bit of interaction with
various professional and trade organizations to help unfold the
healthcare aspect," Murphy said. He continued, "From the business
development aspect, we are having discussions with a number of
payers on how we can better collaborate with them."
Murphy summarized Linkia's benefits: "The near-term benefit is
cleaning up the administrative front end, which benefits everyone.
The long-term benefit will be co-authoring care pathways to ensure
that patients are getting the care they need when they need it,
along with appropriate economic value to long-term function, so
that both provider and payer can say, We've done the right thing
for the patient.'"
For more information, visit www.linkia.com 
Table Of Contents - June 2004
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