IPA's challenge: Getting doctors hooked up

December 17, 2001

They want to lure more physicians onto the Internet to manage utilization, reduce administrative costs, and improve outcomes.

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IPA's challenge: Getting doctors hooked up

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They want to lure more physicians onto the Internet to manage utilization, reduce administrative costs, and improve outcomes.

By Molly Tschida  

These last few years have been rough on IPAs. Many found out the hard way that they weren't prepared to be mini-HMOs. As capitation rates dropped, they floundered under the daily burden of managing risk with insufficient funds. In 1998, for instance, 31 IPAs folded in California alone.

Autopsies of failed IPAs reveal that low reimbursement is the primary killer. But another, equally destructive force is at work, says Al Holloway, CEO of The IPA Association of America, based in Oakland, CA. That's the inability of most IPAs to gather, analyze, and disseminate financial and clinical data. Without that data, he says, it's impossible to manage utilization effectively.

"IPAs need to be able to communicate with their doctors instantaneously on a lot of different issues, such as financial and patient satisfaction information," Holloway says. "They need a tool that can help them accumulate and process information and feed it back to providers."

Because of the financial crunch they're in, IPAs have little to spend on information technology. Few IPAs have been able to purchase information systems that rely on powerful computers and sophisticated software—not to mention an experienced information technology staff. But with the spread of the Internet, some IPAs have been able to build Web-based information systems or use those of outside companies for a fraction of what it would have cost them to buy conventional systems.

Rather than shell out up to $1 million for a poorly customized, old-style information system, PrimeCare IPA of Southern Oregon decided to build its own. The 367-member multispecialty IPA last year developed a Web-based application that allows it to manage eligibility, credentialing, referrals, and other authorizations online. High-speed, secure T-1 lines connect the IPA's onsite server with physician offices.

Stacy Mays, vice president of Doral USA, a Milwaukee-based administrative services organization, says those types of day-today IPA transactions are ideally suited to Web-based solutions.

"Technology can't solve all the world's problems, but certain transaction-based processes lend themselves very well to technology," Mays says. "Suppose, for example, you have 50 patients coming in tomorrow. If you can verify their eligibility with one mouse click, you've just saved yourself a tremendous amount of time and effort."

PrimeCare no longer accepts capitation contracts, but it still has risk-based managed care agreements with seven of its 23 payers. To manage its own risk and to curb the rise in local health costs, PrimeCare manages patient utilization in all contracted health plans. By controlling utilization, the IPA helps keep health care affordable for both employers and patients, explains Michael Bond, CEO of PrimeCare.

The staffs of both the IPA and the physicians' offices used to spend many hours each day phoning and faxing payers to verify eligibility and obtain authorizations, says Bond. Now, member physicians' offices can perform these transactions with the IPA through their Web browsers. They go to the IPA's Web site, select a type of transaction, and input the data.

"Our system is designed to provide a single method of working with all of our contracted health plans, with one point of contact and one simplified electronic transmission that provides instant receipt and verification," Bond says.

Most of the offices belonging to the IPA have practice management systems capable of transmitting claims electronically, but those systems don't provide connectivity with payers for other administrative functions. Until the IPA implemented online referrals and authorizations, recalls FP David S. Jones of Ashland, OR, his staff spent hours on an "endless phone tree."

Some doctors were reluctant to embrace the new technology, according to Jones, so the IPA eased them into it by letting them submit information by fax for a while. But to participate in PrimeCare's contracts, physicians must now be connected online with the IPA.

PrimeCare built the Web site for only $60,000. It pays one full-time staff member to maintain and update it.

In exchange for PrimeCare's reducing payers' referral and authorization costs, the health plans now supply the IPA with claims data. This allows the IPA not only to track utilization by member physicians, but also to analyze outcomes.

An analysis of the claims data helped the IPA determine that in 40 percent of the cases where its primary care physicians ordered MRI tests, they either diverged from clinical protocols or didn't meet the needs of the specialist to whom the patient had been referred. The IPA began requiring prior authorization on all MRIs ordered by primary care providers, and the incidence of inappropriate requests declined dramatically.

Outsourcing is another popular option

While PrimeCare was successful in building its own connectivity system, some other physician organizations prefer outsourcing. Many are contracting with companies known as application service providers, or ASPs (see "Can an ASP save you money?"). These vendors offer software applications that physician organizations access via the Internet or secure private lines. The ASPs also maintain the computer hardware, update the software, and provide training to office staffs. They typically charge clients a monthly subscription fee scaled to the number of users.

"Smaller groups or smaller IPAs may not be able to afford traditional systems. The ASP model will allow them access to programs that were prohibitively expensive before," says Greg LeGrow, a consultant with Long Beach, CA-based First Consulting Group. "That's the real benefit of an ASP—avoidance of the capital purchase of the hardware and software."

Unfortunately, some physician organizations that have contracted with ASPs have been unable to deliver the promised connectivity to their member practices. But this wasn't necessarily the fault of the ASPs.

Eastern Ohio Physicians Organization, an MSO that, until recently, managed the practices of about 90 physicians, contracted last year with a local ASP to host all of the MSO's billing and practice management software on the Internet. Member practices used PCs equipped with Web browsers to submit online bills and billing information to the MSO, which in turn sent the information electronically to the payers. The system automatically checked coding at the time of entry and alerted the coders if there was a problem. Formerly, physicians had submitted paper claims to the MSO, which entered them into an electronic form and submitted them to insurers online.

When he was interviewed early this year, internist Kevin Nash of Youngstown, OH, expected the MSO's new online capabilities to result in speedier payments and less staff time spent on the phone with payers disputing charges. He also anticipated that the new system would allow his eight-doctor group to reduce its administrative staff by 25 percent.

But things didn't turn out that way, because the Eastern Ohio Physicians Organization went out of business, nearly bankrupting some doctors in the process. The physicians subsequently contracted with a Baltimore-based billing service, which bought the licenses for the MSO's practice management system and hired some of Eastern Ohio's personnel.

For the past several months, Nash and his colleagues have been routing paper superbills to a remote location, where the data is manually entered into computers for electronic claims submission—just like the old system. Eventually, it's anticipated that "we'll get to the point where we do claims entry at the point of service and submit directly to the billing service in Baltimore via the Internet," says Nash.

Some IPAs have been unable to work out satisfactory arrangements with ASPs. The Arizona State Physicians Association, for instance, last year hired Newport Beach, CA-based TriZetto Group to provide an Internet portal for the IPA and its 2,400 member physicians. The portal was going to enable physicians to access coding guidelines and perform eligibility, referral, and authorization transactions. But the deal fell apart because certain technical problems couldn't be solved economically, says Tom Economidis, executive director of the ASPA.

Even if TriZetto had completed the portal, he notes, many physicians would still not be using the Internet for professional purposes. Nudging IPA members online, however, should lead to savings down the road, he says. To that end, the association is discussing Web site development for IPA physicians with a local firm following the financial collapse of another Web developer it had partnered with.

"If our physicians are Internet-savvy and understand what the Web can do to increase their efficiency, that will help us in the future," says Economidis. "Having our physicians on the Internet will also enhance our market capabilities. And having them online would give us a vehicle to communicate more directly about claims and utilization management."

Not ready yet for online transactions

Like the Arizona IPA, Touchstone Health Partnership, a New York City-based IPA of 200 primary care physicians, has found that many physician offices don't have the high-speed Internet access they need to do online transactions.

"We have an ideal model of where we'd like to be: everyone on the Internet, everyone getting information, and all transactions in real time," says Kaye Morrow, vice president of operations for Touchstone. "But we've discovered the physicians just aren't there yet."

Touchstone is working to improve physician efficiency by taking on more Internet-based responsibilities itself. Because the IPA holds only Medicare HMO contracts, many patients have multiple chronic conditions. To help doctors manage those conditions better, Touchstone has implemented a Web-based health risk assessment tool. As soon as a patient joins an HMO that contracts with Touchstone, nurses from the IPA interview the patient to perform a health risk assessment. The patient is scored as either high- or low-risk, and the primary care physician is informed.

"We then know whether we should be calling the patient once a week, once a quarter, or following up with a specialty physician—all things that a physician office generally doesn't have time to do," Morrow says. "We're not actually intervening in the provision of care, but rather acting as an extension of care for the physician. We believe this will help physicians better manage high-risk patients and, in the long run, will improve outcomes for our patients."

While physicians may regard this approach as intrusive, some observers think it could lead to less, rather than more, encroachment by managed care. "Technology allows you to eliminate the 'Mother, may I?' approach to utilization management," says Doral's Stacy Mays. "If you have good, timely data, you can learn a lot more about what's going on in your IPA than by having the office, the managed care entity, and the IPA all devoting resources to chasing a little piece of paper."

The author is a freelance writer based in Chicago.

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Molly Tschida. IPA's challenge: Getting doctors hooked up. Medical Economics 2001;24.