Advice on Negotiating BMT Service Contracts

NEW ORLEANS—It may be easier to develop a bone marrow transplant protocol than to design a perfect reimbursement system for these services under managed care.

That’s the way things looked at a conference sponsored by International Business Communications, where attendees heard approaches to negotiating and managing bone marrow and stem cell transplant contracts from the perspective of payers, providers, and oncology service networks (to whom managed care organizations sometimes “carve out,” or refer, transplants).

The companies compete for precious managed care dollars in a system in which nothing can be assumed, and the devil is in the details.

When transplant centers attempt to win contracts from managed care organizations or service networks, oncologists are often called upon to help build their institution’s case. Independent physicians’ associations (IPAs) are also pursuing such contracts themselves; therefore, physicians need to become better informed participants in the reimbursement game.

Managed care organizations, insurance companies, and service networks—ie, the payers—seek to contract with bone marrow transplantation (BMT) centers that will offer the most services for the money (altogether, a BMT can exceed $170,000).

But today, the bottom line is not all that counts in the selection process. Equal emphasis is generally placed on quality of care and outcomes, since the cost of transplants has stabilized (and cost data are hard to compare) and customer satisfaction is increasingly important.

What Payers Want

“Payers want more than just a contract and a place to refer patients,” said Charles J. Bruno, vice president, Management Services Organization for the City of Hope Oncology Network, Duarte, California. His organization services two large managed care organizations, covering 800,000 lives. “Payers want a cooperative, nonconfrontational relationship with their providers, one that is based on good value, consistent communication, and customer service,” he commented.

The volume of information that is compiled in negotiating such contracts is formidable: patient profile data, case management processes, rates for procedures, shared risk arrangements, volume of referrals, outcome and survival data, complication rates, and so on.

What the Provider Must Know

The health care provider needs to know exactly what it costs the institution to perform each and every step of the transplant, in order to negotiate a fair contract, Mr. Bruno said. The proactive provider will also want to learn as much as possible about the competition, such as the severity of the cases they treat as well as the volume, in order to compare costs and outcomes and try to come out ahead.

The system is moving toward a “global case rate” method of reimbursement, that is, a rate that starts at a predetermined point in care (such as ablative therapy) and ends at a predetermined point in care or time (usually 90 days to one year post-transplant).

Of utmost importance, he said, is that the provider understand which services will and will not be reimbursed within the global rate. For example, is the transition in care back to the community oncologist covered, or will the patient have to receive follow-up care only at the transplant center? Are charges for donor searches through the National Marrow Donor Program (NMDP) covered? Some contracts do not cover these costs, and the provider should be assured that they can be billed for separately, Mr. Bruno pointed out.

“The details of your contract are very important,” Deborah R. Rodriguez, MPH, reiterated in her presentation. She is director of network development for United Resource Networks, Golden Valley, Minnesota. Her company, a business unit of United HealthCare Corp, provides access to 33 million lives for more than 400 clients and has managed more than 4,000 bone marrow transplants at 34 centers since 1991.

While United Resource Networks has primarily contracted with academic transplant centers, the company is now setting up credentialing criteria for community oncology groups doing autologous bone marrow transplants.

Ms. Rodriguez said that her company includes in the global rate virtually all services related to the transplant, including evaluation, donor expenses, harvest, ablative therapy, stem cell infusion, hospital and physician services, protocol-specific procedures, 100 days of follow-up care, and outpatient protocol-specific drugs. The company also likes to have housing, outpatient disposable supplies, and home health care covered in the global rate.

“Our goal is to include as many services in the global rate as possible because it benefits the patient and minimizes their burden,” she said.

When United Resource Networks considers contracting with a transplant center, it looks at volume of cases; survival and complication rates; experience of the physicians, transplant team, and medical center; and the center’s involvement in clinical trials. “Before we close on a contract, we must have all these criteria satisfied,” she said.

Factors Critical to Success

Patricia J. Goldsmith, vice president of Managed Care and Business Development, H. Lee Moffitt Cancer Center & Research Institute, Tampa, told the transplant center representatives that certain factors are critical to the success of any BMT program in the managed care era.

“Make payers feel you want their business and will care for their patients cost effectively; appoint a liaison between managed care and your transplant center; spend time educating the payer; differentiate your program from the competition; gather and evaluate as much data as possible; and don’t compete on price alone,” she said.

Negotiating the terms of the contract is never easy, she stressed. Physicians and transplant centers must collaborate before taking the negotiations to the table, deciding internally how much each will be reimbursed by the payer. Ideally, one contract will be arranged, which the hospital signs on behalf of the physicians as well, she said.

She added that, from the center’s standpoint, one of the greatest challenges is administering the global rate package. “We negotiate great deals with the payer, then the financial officer wants to choke us. You should know your costs and understand they are a moving target,” she advised the providers.