National P&O Contracting

National P&O Contracting

sue smithson

9/8/2006

I am a contracting consultant in the insurance industry and have had a
series of e-mails regarding the O&P National contracting issue forwarded
to me. I am presently consulting with various national insurance
companies that are presently investigating national O&P contracts.

I have two questions but would like to preface them with some details to
establish how I came to this inquiry.

Linkia is setting up a national contracting process, for the insurance
companies this appears to be a good thing, sign one contract as opposed
to negotiating and signing hundreds of contracts. Saves administrative
costs and thus keeps premiums down. And yes, Linkia is affiliated with
one national provider, we know that, but why would this be an issue?
Coverage, service and costs are the issues to be considered, as long as
that can be delivered, everything else is secondary.

The O&P industry is unregulated, few if any states have licensure, and
the industry as a whole does not appear to have any compliance or
internal audit standards of any consequence. By contracting with one
network/company, a uniform and consistent patient care standard can be
applied because it is being controlled by one group that can actually
monitor and enforce minimum standards, something the O&P industry and
association has apparently not been able to implement with the
independent practices.

My question is stimulated by the posting by Mr. Kidd, founder of POINT
supporting his business partner Mr. Andreessen, President of OPGA. Mr.
Kidd states “I see it (Linkia) as the greatest threat to traditional O&P
in my career!”

What is the difference between what OPGA and POINT are attempting to
create and what Linkia has created? If VGM (owners of OPGA and POINT)
were able to grow and acquire the national contracts, than the
independents that did not join would be locked out of the contracts as
well. If OPGA or POINT were to have secured the national Cinga contract
instead of Linka, then OPGA would establish a network until it was
saturated and then not allow additional providers; that is how a network
works, once the network meets the needs of saturation, then no new
providers are admitted.

I truly do welcome any responses and feed back to my two questions.

1. As an insurance contractor, why would I want to sign hundreds of
contracts with hundreds of individual providers when I can sign one with
a network manager?

2. As an insurance contractor, what is the difference between Linkia and
OPGA?

Thank you in advance for your response.

Sue Smithson

Indepedent Insurance Contracting and Consulting

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