DirectNet | A Better Choice in Managed Health Care


I. Facilitate Genuine Competition in the Healthcare Marketplace Competition in any market is good for consumers. Quality of service and pricing are both improved every time providers are asked to compete for business. Healthcare is a business and a service commodity.

Process: 1) Client gives GM&A the authority to negotiate direct provider rates for a DirectNet Custom health care provider network. 2) RFPs are released to the local providers requesting fixed rates, not “percent off of billed charges”. 3) Proposals are reviewed and competitive negotiation drives the design of the DirectNet Custom Network. 4) GM&A analyzes and projects annual reduction of actual costs resulting from the finalized negotiations. GM&A presents the DirectNet Provider Network to the client with recommendations. 5) If the client accepts the Custom DirectNet Provider Network, the agreement takes effect on the date set forth in the agreement. 6) If the client chooses to not accept the DirectNet Network for any reason, there is no charge to the client.		GM&A Negotiators are Healthcare Insiders: Michael Jenike, M.H.A. 30 years experience in hospital administration and managed healthcare. “Throughout my career, I held to the principle that I would provide the best hospital and physician rates for any large local employer who, through an exclusive, direct, multi year agreement, chose to utilize our hospital and physicians. GM&A understands that hospitals and physicians would much rather have a direct relationship with employers rather than be beholden to an insurance company or PPO network. This allows GM&A to negotiate direct contracts on behalf of employers with rates below that of insurance companies and PPO networks.” David Herbert, M.D. 30 years experience including Chief of Hospital Medical Staff and physician group management. “I use my experience in physician/hospital contracting and physician group management to negotiate below market rates for our clients. Insurance companies and PPO networks are not necessarily aligned with the interests of the individual employer and its employees. The expertise GM&A brings to the table plus the partnership GM&A forms with the employer and its employees equals a winning formula.”


II. Implement Effective Plan Adherence Processes The best negotiated rates are only as good as the accuracy of the claims payments. Accountability promotes quality.

Process:

1) The TPA sends claims over a specified amount to our in-house claims specialists before any payments are made to verify plan adherence. This step does not delay payments to providers per their agreements.		TPAs are usually evaluated by customer service and claim turn around time, seldom payment accuracy. GM&A/DirectNet works cooperatively with the TPA to insure both time and accuracy levels are met for the client’s benefit.

2) GM&A performs random audits of smaller claim payments to insure consistent and strict plan adherence.		An example of why this is so important: In a recent paid claims review for a client, GM&A/DirectNet found 200 claims under $2,500 that were paid (with the client’s money!) at full billed charges. The TPA was made aware of the problem and it was taken care of. If no one had been watching, there could have been a significant loss to the Plan. 200 claims X avg. miscalculation of $750 = $150,000.

3) Our Nurse Auditor audits large/unusual claims using the patient’s medical records, not just the bill, before final payment to verify charges and plan adherence.		TPAs typically look at large claims to verify correct coding. GM&A/DirectNet compares medical records to the billed items to make sure that all billed items were ordered and reported.

4) GM&A/DirectNet provides ongoing client support for any disputes between The Plan, its Members and the contracted providers.		GM&A/DirectNet promotes good relationships between providers and clients.


III. Provide Continuous Plan Monitoring GM&A continuously monitors trends that are specific to each plan in order to identify opportunities to strengthen the Plan. Regular evaluation fine-tunes results.

Process:		Examples:

1) GM&A meets monthly, or as requested, with the client and/or consultant to present findings and make recommendations.		One of our clients’ prescription claims was being adversely affected by over use of name brand drugs. GM&A recommended changing the benefits to allow 100% coverage for mail order generics. and the change produced the desired reduction in costs for the plan and the member.

2) GM&A, on behalf of the Plan, or when requested by any member, will contact and negotiate, with physicians or specialty services not included in the custom network.		GM&A has negotiated direct contracts for clients with drug companies in order to allow the Plan to purchase high cost cancer treatment drugs at significantly reduced cost. The drugs are shipped to the participating physician to administer the treatment and the Plan saves the “mark-up” on the drugs. GM&A negotiated rates for a high quality organ transplant that yielded a $20,000 savings over and above the initial contracted rate given by the transplant network. This also allowed the patient to receive services closer to his home. GM&A will attempt to honor the request from any member to have their physician in-network.


IV. Serve the Same Interest as the Client

Compensation that is based on a true reduction in cost ensures that the Plan, its members and GM&A/DirectNet are serving the same interests...high quality, cost efficient health care. GM&A/DirectNet has a 100% performance guarantee, i.e., no reduction in cost, no fees.		GM&A / DirectNet’s compensation is based on an actual reduction in your plan’s cost of claims – cost Per Member Per Month…not by discounts and not by the number of employees, but actual claims cost to the Plan per member…REAL COSTS. The formula is simple! (Doctor + Hospital costs) divided by (the total number of covered lives) equals Per Member Per Month cost

Monthly Process:

1) GM&A/DirectNet looks at the medical claims paid out of the Plan and divides that amount by the total number of covered lives to arrive at the Per Member Per Month cost. 2) If the PMPM cost is lower than the agreed upon benchmark, GM&A/DirectNet receives a percentage of the amount of cost reduction for the month.

Where’s your Cow?

Fortune Magazine
March 21,2005

'The Best Advice I Ever Got': Anne Mulcahy
Remember the parable of the cow in the ditch, says the 52-year-old CEO of Xerox.

"One piece of advice I got has become a mantra at Xerox. It came from a very funny source. It was four years ago, and I was doing a customer breakfast in Dallas. We had invited a set of business leaders there. One was a plainspoken, self-made, streetwise guy [Albert C. Black Jr., president and CEO of On-Target Supplies & Logistics, a logistics management firm]. He came up to me and gave me this advice, and I have wound up using it constantly. 'When everything gets really complicated and you feel overwhelmed,' he told me, 'think about it this way: You gotta do three things. First, get the cow out of the ditch. Second, find out how the cow got into the ditch. Third, make sure you do whatever it takes so the cow doesn't go into the ditch again.'

"Now, every time I talk about the turnaround at Xerox, I start with the cow in the ditch. The first thing is survival. The second thing is, figure out what happened. Learn from those lessons and make sure you've put a plan in place to recognize the signs, and never get there again. This has become sort of a catchphrase for the leadership team. It's just one of those incredibly simple commonsense stories to keep people grounded. I bet that businessman had no idea what kind of legs his story would have."

Commentary
By: Mary Orms, Senior Vice President
GM&A

After reading this article in the March 2005 edition of Fortune Magazine, it occurred to me that the parable of the cow in the ditch was a perfectly simple and accurate way of describing why a GM&A/DirectNet Custom Health Care Provider Network is the perfect tool to correct and stabilize the cost of health care.

Think about it like this:

1. DirectNet is the tractor that pulls the “Health Plan Cost Cow” out of the ditch;
2. DirectNet reveals how the “Health Plan Cost Cow” got into the ditch;
3. DirectNet puts processes in place that make sure the “Health Plan Cost Cow” doesn’t find its way back to the ditch.

I used the Cow Parable for the first time when GM&A sponsored a benefits forum presentation to a business group on health. During the Q&A session one of the attendees, who is the Benefits Manager for a large municipality, said, “Mam, my cow is in the ditch.” He later commented, “My cow is not only in the ditch…she’s up to her belly in mud.”

If you can relate this man’s comments to your own health care plan, it is time to call GM&A/DirectNet to help you get your plan back on track now before another increase in cost resulting in a decrease in benefits.

DirectNet is a Wholly Owned Subsidiary of GM&A.