What should an O/P Network Look Like?
Daniel Gottry
Description
Collection
Title:
What should an O/P Network Look Like?
Creator:
Daniel Gottry
Date:
9/21/2006
Text:
I am grateful to all who have responded and provided additional information to me as it has helped to educate me as to issues that impact both O/P providers and patients. A recent response from Jim Andreassen provided excellent information. You can see this and other current information at my website! Daniel Gottry
www.gottrys.com/leggo/
Dear Dan,
I continue to be impressed with your pinpoint accuracy identifying and exploring the issues surrounding the decision by CIGNA to implement a network manager which competes with the additional providers it is charged to manage. I have also been overwhelmed by the number of positive responses I have received from my previous post.
Before I respond about how OPGA/POINT conforms to your criteria, let me first say that although I do see the monopolistic arguments, what independents really need to do is compete. Independents dominate this industry, and we at OPGA/POINT want it to remain that way. There is a place in the business strategy where independents can employ networks to compete effectively.
So why has Linkia obtained the CIGNA contract? I believe that answer lies essentially in geographic coverage and practice locations. The independents have waited and are acting in a reactive rather than proactive manner. They are allowing the leading few to direct their future. Due to lack of participation in our network by Independents, Linkia offers larger geographic coverage. The majority of Independents have waited for the impact of Hanger's Linkia division to result in the termination of their Independent/Direct CIGNA contracts BEFORE considering whether they should support and have available a network to compete with it.
You will hear many Independents bemoaning that the national, publicly traded organization has such power and influence over its trade organization, credentialing organization, the largest patient organization, the lobbying groups, and to a lesser extent, even the academic organization. But, to be fair, all these organizations are pressured to behave as their major funding sources request. At the same time these Independents will explain why they won't pursue ABC Facility Accreditation, or join a network such as OPGA/POINT, AOPA or support ACA, then, after neither actively funding nor contributing, in a self-fulfilling prophecy scenario, now the supporting entities don't deserve their support.
They will tell you that same national, publicly traded organization offers them the lowest prices as a distributor through their wholly owned SPS division and has terrific service. Does this justify throwing them financial support in the form of contributing revenue to their bottom line, which they can funnel to the less profitable segment of their COMPETING service provider business and take that away too?
I believe each Independent practice has the responsibility to put together a business plan, and to make logical decisions that support the strategies they decide to employ in their plan. To the Independents, I ask, If Linkia is successful and if this service delivery model rolls through the industry, what happens to your practice? If you maintain total independence, never engaging your practice in any collaborative efforts and Medicare competitive bidding is successful, what happens to your practice? I find it disheartening that a larger percentage of the industry is investing in their competitor, as is evidenced by the growth of the SPS division in each successive quarter of HGR earnings reports, than in their own industry organizations, or in a competitive network. Should this be part of your business plan?
Our network vehicle will allow Independents to compete and access some major managed care payers who seek network services, as well as compete for Medicare competitive bidding contracts, and to obtain competitive pricing for supplies and componentry.
Dan, I was equally impressed by your identification of the key elements of a network manager model that would meet both the provider and payer needs. I know you have little interest in researching and determining our value, but want to assure you that OPGA/POINT agrees with and does adhere to each of your 3 key elements of a non-biased network manager. Given how long and carefully we considered what was essential it is admirable that you came up with it in your response to Smithson's listserve post. Regarding your criteria:
1) Please understand there are on-going debates about the Prosthetic & Orthotic credentialing standards, credentialing entity decisions and the value of the various benefits associated with credentialing. From the inception of organization, POINT has adhered to requiring the highest available credentialing standard for Prosthetics & Orthotics, which is ABC Facility Accreditation, fully recognizing that accomplishing this standard was an additional expense, completely voluntary and NOT required to obtain managed care contracts. It does not result in any economic benefit in the form of higher reimbursement or advantage in obtaining insurer participation contracts; yet the network founders believed it was an important demonstration of the Facility's commitment to quality and differentiated the Facility as being of highest quality.
2) The POINT fees were determined by the founders of POINT to fund the operations of the initially provider-owned network. At the time of sale of the network to VGM, due to economies of scale, these participation costs were actually lowered for the participating facility. If providers need comparisons, our fees are outlined at <URL Redacted> under the Join POINT tab.
3) Although the provider-owned network in its early years entertained many on-going debates about whether the network should be inclusive or exclusive the leadership took the high road and chose the inclusive route, even knowing that the few who had invested shareholder dollars (well beyond the current member dues/withhold amounts) and been proactive in their quest to meet the foreseen service need have borne a much larger portion of the costs to create the network.
In closing, the vehicle that will allow the independents to compete is already in place. It is now time to choose the strategy that will best fit their business plan.
Jim Andreassen
President, OPGA
Phone: 800-214-6742
Fax: 888-449-0610
email: <Email Address Redacted>
----------------
Daniel Gottry
<Email Address Redacted>
480-491-1020
www.gottrys.com/leggo/
Dear Dan,
I continue to be impressed with your pinpoint accuracy identifying and exploring the issues surrounding the decision by CIGNA to implement a network manager which competes with the additional providers it is charged to manage. I have also been overwhelmed by the number of positive responses I have received from my previous post.
Before I respond about how OPGA/POINT conforms to your criteria, let me first say that although I do see the monopolistic arguments, what independents really need to do is compete. Independents dominate this industry, and we at OPGA/POINT want it to remain that way. There is a place in the business strategy where independents can employ networks to compete effectively.
So why has Linkia obtained the CIGNA contract? I believe that answer lies essentially in geographic coverage and practice locations. The independents have waited and are acting in a reactive rather than proactive manner. They are allowing the leading few to direct their future. Due to lack of participation in our network by Independents, Linkia offers larger geographic coverage. The majority of Independents have waited for the impact of Hanger's Linkia division to result in the termination of their Independent/Direct CIGNA contracts BEFORE considering whether they should support and have available a network to compete with it.
You will hear many Independents bemoaning that the national, publicly traded organization has such power and influence over its trade organization, credentialing organization, the largest patient organization, the lobbying groups, and to a lesser extent, even the academic organization. But, to be fair, all these organizations are pressured to behave as their major funding sources request. At the same time these Independents will explain why they won't pursue ABC Facility Accreditation, or join a network such as OPGA/POINT, AOPA or support ACA, then, after neither actively funding nor contributing, in a self-fulfilling prophecy scenario, now the supporting entities don't deserve their support.
They will tell you that same national, publicly traded organization offers them the lowest prices as a distributor through their wholly owned SPS division and has terrific service. Does this justify throwing them financial support in the form of contributing revenue to their bottom line, which they can funnel to the less profitable segment of their COMPETING service provider business and take that away too?
I believe each Independent practice has the responsibility to put together a business plan, and to make logical decisions that support the strategies they decide to employ in their plan. To the Independents, I ask, If Linkia is successful and if this service delivery model rolls through the industry, what happens to your practice? If you maintain total independence, never engaging your practice in any collaborative efforts and Medicare competitive bidding is successful, what happens to your practice? I find it disheartening that a larger percentage of the industry is investing in their competitor, as is evidenced by the growth of the SPS division in each successive quarter of HGR earnings reports, than in their own industry organizations, or in a competitive network. Should this be part of your business plan?
Our network vehicle will allow Independents to compete and access some major managed care payers who seek network services, as well as compete for Medicare competitive bidding contracts, and to obtain competitive pricing for supplies and componentry.
Dan, I was equally impressed by your identification of the key elements of a network manager model that would meet both the provider and payer needs. I know you have little interest in researching and determining our value, but want to assure you that OPGA/POINT agrees with and does adhere to each of your 3 key elements of a non-biased network manager. Given how long and carefully we considered what was essential it is admirable that you came up with it in your response to Smithson's listserve post. Regarding your criteria:
1) Please understand there are on-going debates about the Prosthetic & Orthotic credentialing standards, credentialing entity decisions and the value of the various benefits associated with credentialing. From the inception of organization, POINT has adhered to requiring the highest available credentialing standard for Prosthetics & Orthotics, which is ABC Facility Accreditation, fully recognizing that accomplishing this standard was an additional expense, completely voluntary and NOT required to obtain managed care contracts. It does not result in any economic benefit in the form of higher reimbursement or advantage in obtaining insurer participation contracts; yet the network founders believed it was an important demonstration of the Facility's commitment to quality and differentiated the Facility as being of highest quality.
2) The POINT fees were determined by the founders of POINT to fund the operations of the initially provider-owned network. At the time of sale of the network to VGM, due to economies of scale, these participation costs were actually lowered for the participating facility. If providers need comparisons, our fees are outlined at <URL Redacted> under the Join POINT tab.
3) Although the provider-owned network in its early years entertained many on-going debates about whether the network should be inclusive or exclusive the leadership took the high road and chose the inclusive route, even knowing that the few who had invested shareholder dollars (well beyond the current member dues/withhold amounts) and been proactive in their quest to meet the foreseen service need have borne a much larger portion of the costs to create the network.
In closing, the vehicle that will allow the independents to compete is already in place. It is now time to choose the strategy that will best fit their business plan.
Jim Andreassen
President, OPGA
Phone: 800-214-6742
Fax: 888-449-0610
email: <Email Address Redacted>
----------------
Daniel Gottry
<Email Address Redacted>
480-491-1020
Citation
Daniel Gottry, “What should an O/P Network Look Like?,” Digital Resource Foundation for Orthotics and Prosthetics, accessed November 1, 2024, https://library.drfop.org/items/show/227352.
