Health Cloud Administration
jProvider Network Contract Management
Contract management plays a significant role in provider networks. An effective contract
management system ensures that contracts have the right payments, providers are held
accountable for care outcomes, and clinicians work towards qualitative,
patient-centric care. It involves defining appropriate, agreed-upon payment terms so
that payers, providers, and provider groups can focus on care coordination and
health management.
Contracts can exist between:
- Payers and provider groups
- Payers and providers
- Provider groups and providers
With providers, there are different levels of contractual terms. Within contracts, there are also varying terms and conditions for different provider relationships and specialties.
- Participating providers (specialists or consultants) in the organization network agree to the contracted payment terms and conditions, including reimbursement structures. They’re considered In-network providers; when members access healthcare services from these providers, there’s cost reduction and savings.
- Non-Participating providers don’t participate in the organization network and aren’t bound by the reimbursement structures and negotiated terms applicable for participating providers. They’re considered Out-of-network providers.
These are some of the main contract payment types that the healthcare industry supports:
- Fee-for-Service
- Healthcare providers are paid a negotiated amount for each service they perform. The amounts are based on the comprehensive fee schedule definition set up by Centers for Medicare and Medicaid Services (CMS). Example: patient visits.
- Category-Based Payment
- Healthcare providers are paid based on a defined negotiation for each procedure category that they work on. Example: vaccines.
- Percentile-Based Payment
- Providers are paid based on the percentile range that the member falls into. Each percentile range has a separate fee, which is determined by factors such as the member's age. For the same service, the provider is paid a different amount for members in the 50th percentile and 75th percentile.
- Shared Savings
- The payer shares the profit and loss with the provider and provider groups. The payment terms are dependent on the forecasted expenditure and the profit or loss percentage for the defined time period. This payment type is generally seen in an Accountable Care Organization (ACO).
- Capitated Payment
- Providers are paid a fixed amount per member every month for a fixed set of services. As part of the program, the payer can also decide to withhold some amount and pay it later as a bonus amount based on the performance.
- Bundled Payment
- Providers are paid for each procedure bundle they work on. Bundles are a group of procedures that are offered together by the provider. Bundled payment is tier-based and can have different prices depending on the services and care offered. Members and payers choose the bundle category that works best for them. Example: Basic, mid, and premium tier.
- Preventive Care
- Providers are paid a bonus when they reach an agreed upon target such as reducing the admission or readmission rates by a certain percentage.