How MLR Can Hurt or Help Contract Negotiations

Karen Minich-Pourshadi, for HealthLeaders Media , January 10, 2011

Karen Van Wagner, Ph.D. and executive director for North Texas Specialty Physicians in Fort Worth, TX, agrees that the MLR regulation has the potential to improve the relationship between payers and providers. She should know. The 600-physician, independent physician association is both a payer and a provider. NTSP offers a Medicare PPO through a wholly-owned subsidiary named Care N' Care.

“As a payer we're planning on complying [with MLR] by first evaluating our benefit set. We’ll take a look at the regulation to see what other activities we can do to meet MLR … such as improving care management, quality improvements and electronic health exchange,” she says.

As payers begin to look within for ways to save money on their administrative costs, they may find that they need to look to providers to help them (a point of negotiating leverage which providers should keep in mind). You see, if payers work with providers to improve claims processing by encouraging the use of technology for swifter and more accurate exchange, then payers would be able to save money on the cost to process claims (and so would providers).

“Prior to the health information exchange, if we wanted details on a claim, we had to go to the claims files or the physician. The big change for us is having the ability to get a real-time slice of the data and it combines claims and clinical information,” she says.

Payers could take things a step further, too, as NTSP has already done. In 2007 they founded Sandlot, anotherwholly owned subsidiary, which offers providers three technology services: e-prescribing, electronic medical record-keeping, and an integrated and flexible data and information exchange system for sharing medically related information.

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