Managed Care Contracting Strategy

2010 Arizona HFMA Spring
Conference
(Chandler, AZ)
L E A D E R S H I P  P R O B L E M SO L V I N G  V A L U E C R E A T I O N March 18, 2010

Managed Care Contracting Strategy
and Emerging Business Models:
Physician Practice Perspective
Christopher J. Kalkhof, FACHE
Director, Healthcare Industry Group
(New York Office)

Copyright 2010. Alvarez & Marsal. All Rights Reserved.

Presentation Agenda

I. Payer Physician Networks
 Basic Payer Goals
 Participation vs. Non-Participation and Implications
for Practice
 Payer Contracting Options and Products
 Trends in Marketplace Impacting Practice Revenues
II. Patient Steerage – How Does it Really Work?
III. Managed Care Contracting Strategies and
Different Negotiating Techniques
 Key Questions to Ask Before Signing Any Payer
Agreement
IV. Physician Alignment and Integration:
Evolving and Emerging Business Models
V. Questions & Answers
Copyright 2010. Alvarez & Marsal Holdings, LLC. All Rights Reserved. (1)

Presentation Agenda

for Practice
Agreement

Payer Business Goals

 Profitability.
 Membership Growth (traditional, new product, M&A).
 Unit Cost Control (<= 4%-8%; slow loss of discount value).
 Utilization Management/Disease Management Improvements.
 Improve Operational Efficiency (SCR and provider network).
 Metrics Management (scorecards, templates).
 Customer Satisfaction, Consumerism and Product Value.
 Compliance (DOI, DOH, CMS, NCQA, DOJ, etc.).
 Accessible, Quality Oriented, Price Competitive, Stable long
term Fixed contractual relationships with providers which
represent Efficient, Stable and Predictable relationships.
HOW DOES THE ABOVE IMPACT YOUR STRATEGY?
© Copyright 2010. Alvarez & Marsal Holdings, LLC. All Rights Reserved. (3)

Pros and Cons of Being a Par/Non-Par Practice

Potential upside participation issues (w/favorable contract):
 Increased patient volume through physician referral management.
 Opportunity to negotiate higher than “norm” reimbursements.
 Inclusion on payer participating provider lists/websites.
 Retention of your patients which are payer members.
 Electronic claims payment and accelerated cash flow.
 Payer product benefit plan designs often provide members with
financial incentives to use in-network physicians vs. out-of-network
physicians… resulting potential incremental patient volume.
 Potentially competitive reimbursement.. highs and lows depending
on specific payer products… HMO/POS insured, rental PPO, etc.
 Variable practice management tools.


Potential downside participation issues:
 Reduced control and independence on pricing strategy and patient care
treatment (charges less important, many payment rules to follow).
 Unavoidable increase in contract compliance and administrative costs.
 Changed referral patterns with physicians and hospitals.
 Future procedure payment reductions and margin yield when market
dynamics change… with little to no say on reimbursement changes.
 Increased economic risk exposure… e.g., Capitation, P-4-P and Value
Purchasing programs such as bundled episodes of care payments.
 A potential unfavorable change in practice service/profitability mix.
 Quality rating potential exclusion from specific product networks.
 Pressure to par with “All Payer Products” with a specific payer.
 Price transparency and A/R challenges… retroactive payment re-
coupments/audits w/high appeal costs… reduced cash flows.



If a Practice Chooses to Not Become a Participating
Practice with a Specific Payer or is Excluded:
 Develop and execute strategies and tactics to maintain
patient volume, service mix and net patient revenues.
When a non-par… a potential exists for:
– Loss of patients to competitors.
– Changes in traditional physician referral patterns.
– Increased collection challenges with patients and payers
(e.g., for non-coverage/O-O-N payment allowances).
– A net unfavorable economic impact on the practice.



If a Practice Chooses to Not Become a Participating
Practice with a Specific Payer or is Excluded:
 Panels open at present may be closed in future.
 Track market changes… erosion of traditional F-F-S
medicine into increased enrollments in Medicare
Advantage, Managed Medicaid/CHIP/FHP and Universal
Coverage plans…further payer market consolidation…
retail shopping chains entering primary care market, etc…
can all impact practice economics.
 Look into business models for hospital collaboration.
 Alternate physician group practice/employment delivery
models to strategically position practice.

Traditional and Newer Payer Products and Networks

Payer Core Products (price and Products-Provider Networks
No PCPs - contracted network
utilization control driven) Reduced out-of-network benefits
Limited utilization mgmt.
Deductibles, coinsurance & co-pays
PPO PCPs - contracted network
Reduced out-of-network benefits
POS HMO style utilization protocols
Primarily co-pays
PCPs - limited network, localized area
HMO No non-emergent out-of-network benefits
Tight medical management protocols
Tiered Primarily co-pays
PCPs - selected subset networks with
restrictive protocols
No non-emergent out-of-network benefits
Preferential pricing
Indemnity Primarily co-pays
No PCPs - open network
No utilization management
Deductibles & coinsurance
 Evolving and expanding payer products has increased the complexity and
administrative requirements between physicians and payers.
 Most payer products are out of synch with new payment methodologies.

CMS: Medicare Payment Levels

CMS Sustainable Growth Rate (SGR) Payment Reductions
 The SGR formula calls for
21% fee schedule cuts
starting 1-1-10… delayed
again but unresolved for 2010.
 This 21% cut will grow to
about 40% in cumulative cuts
by 2016 unless Congress acts
soon to permanently reform
Medicare’s physician payment
system.
 EMR requirements to stay in
Medicare/Medicaid add
unbudgeted operational
expenses to practices.
How will CMS changes impact Medicare, Medicaid
& Commercial plan fee schedules, pay-for-
performance and new payment methodologies?

State Budgets: Medicaid Vs. Medicare Payment Levels

Medicaid-to-Medicare Fee Index, 2008 (Medicaid & CHIP)

 What will
happen to State
Medicaid if…
– CMS SGR
cuts are
applied?
– Budget deficits
continue?
– Universal
coverage is
implemented?
– Enrollment
expands?


What Does “Market” Really Mean? Why Do Prices Vary?

Payer Reimbursement Variation Within Different Product Classes

Variable Payer Negotiation Outcomes: Low & High Ranges (1)
Illustrative
Provider
Classes Large Commercial Network Rental
Medicare Advantage Managed Medicaid
HMO/POS/PPO PPOs

(2)
Physicians 65%-175% 90%-200% (2) 70%-150% (2) 35%-120% (2)
(PCPs & (% of Medicare) (% of Medicare) (% of Medicare) (% of Medicare)
Specialists)

Amb Surg 75%-400%(2,3) 100%-500% 70%-120%(2,3) 35%-250%(2,3)
(Hospital based (2,3)
(% of Medicare) (% of Medicare) (% of Medicare)
& Freestanding) (% of Medicare)

Source: A&M analysis and payer reimbursement negotiations outcome experience. Low ranges are generally for
providers who accept payer “market rates” with little question or negotiation on price.
1) Unless otherwise noted, reimbursement ranges are benchmarked against Medicare RVRBS reimbursement. Illustrated
reimbursement ranges are representative of urban market settings around the country.
2) Provider business model, capacity/demand/size/brand as well as network participation… impact upper payment levels.
3) Significant price variability exists in a single market between hospital based and freestanding ASCs… business model,
capacity/demand/size/brand as well as network participation all factor into the pricing strategy and negotiations
outcomes.


Physician Practice Current and Emerging Challenges

 Multiple stakeholder and customer groups… little customer
loyalty… patient volume strategies largely shifted to retention.
 Practice models which provide little too no leverage with payers...
– Reduced net revenue realization across largest payer contracts.
– P-4-P programs and physician efficiency measurement reporting as
well as tiered-network payer products.
– Continued erosion of fee-for-service to managed care and new
payment methodologies.
– Continued payer market consolidation and State and Federal
contracting with payers can result in an unfavorable practice payer mix
revenue portfolio.
 Increased competition for less dollars and the same patients.
 Longer hours, higher expenses and less net income/physician.


Physician Practice Current and Emerging Challenges

 Increasingly difficult to recruit/retain good clinical and
administrative staff.
 Less time with patients and more paperwork.
 More regulatory/payer compliance/costs and increasing lawsuits.
 External parties trying to control the patient-physician relationship.
 Price transparency and consumer-driven healthcare.
 Lack of capital to support needed investment in technology
 No resolution of CMS sustainable growth rate impact on CMS fee
schedule… many national health plans index fees to CMS.
 Questionable ability to maintain historical compensation levels.
 CMS requirement for EMRs as a condition of continued Medicare
participation.
 State and Federal Healthcare Reform.


Managed Care Strategy Development Process

WHAT IF… 80%+ of practice revenues came from
your payer contracts? How would this impact your…
– Short-term and long-term strategic planning?
– Capital planning?
– Alignment and integration strategies?
– Collaboration or lack thereof with select payers?
– Business and service development and/or divestiture?
– Staff recruitment/retention strategies and policies?
– Information technology needs, planning and implementation?
– Relationships with patients and referring physicians?
– Formation of provider networks… e.g., IPAs, Physician-
Hospital Organizations, clinical integration models,
acquisitions of physician practices or practice mergers?

Presentation Agenda

for Practice
Agreement

Third Party Payer Roles in Patient Steerage
II. Patient Steerage – How Does It Really Work?

 “Potential access” to payer members through participation.
 Health benefit plan design (e.g., group and Medicare
Advantage products) can provide financial incentives to
members to use participating providers.
 Practice name, physician name(s), specialty and location
listed in payer electronic and print media.
 Provider contracts which encourage/require referrals to
participating network providers.
 No Active Steerage by the Payer... Why?... “LIABILITY!”
Validate above from your practice data. What are
your business reasons for participating with a payer?


Payer UM Controls - Impact on Referrals

Primary Care Physician 145 - 370 SPECIALIST Referrals Specialists
4,200 - 5,100 435 - 1,100
Amb. Visits/Yr. Amb. Visits/Yr.

95 - 135
50 - 85 50 - 150 Amb. Surgeries Inpatient
Amb. Surgeries I/P Admissions Inpatient 25 - 90 Procedures
Procedures I/P Admissions
(HOSPITALS)

145 - 220 75 - 240 165 - 530
Outpatient Hospital Inpatient
Surgeries/Yr. Admissions/Yr. Procedures

"REFERRAL Variables: Managed care penetration…
IMPACT" practice business model… managed care
strategy… practice business strategy.

Hospital Role in Patient Steerage

 General… Participation status of hospital and medical staff
influences patient choice on elective or self-directed referrals…
perceived quality of the service interactions influences repeat
business and brand… both impact physician referrals.
 Hospital Employed… Patients access the hospital through elective
and non-elective means… some number of patients return for
follow-up care... hospital brand in market and marketing efforts
have an impact.
 Hospital Based or a FPP… Variable impact depending on type of
practice and emergent/urgent or elective nature of visit… market
brand/reputation of hospital and physicians… marketing efforts.
 Integrated PHO or IPA… Delegated credentialing… contracting
practices… deployed market strategies.
 Hospital-Physician Joint Ventures… Variable factors.


Your Practice’s Role in Patient Steerage

 Ensuring consistent patient/care giver satisfaction with
your practice’s clinical quality and service quality
– Do not underestimate the power of favorable clinical and service
quality… i.e., the patient service experience… on the success of
your practice and your payer strategy.
– Ensuring you have a “customer” oriented culture?
– Deploying strategies and resources to attract and retain patients
and employees?
– (Customer Service Leadership + Service/Clinical Quality
Improvement) x (Staff Knowledge, Skills, Abilities) =
 Improved Quality of Care, Patient Safety and Profitability…
better payer leverage… reduced operating expense and risk
exposure… more satisfied patient/customers.

Your Practice’s Role in Patient Steerage

 The clinical quality/cost efficiency of your practice… factors
which are increasingly being considered by payers for tiered
networks.
 Business growth/revenue diversification initiatives and
inclusiveness/exclusiveness with other providers… don’t wait
for the other shoe to drop!
 Your physician referral relationships, participation in Physician
Organizations as well as your relationships with your affiliated
hospital… all impact patient steerage.

Your practice’s growth, marketing and referral
strategies drive patient volume… not payers!

Practice Business Value Chain and Patient Steerage

All Activities Patient Encounter Post Visit Patient
That Lead To A & Services Outcomes &
Patient Visit Delivery Satisfaction
Patient REVISITS… new healthcare
issues or continued health problems

 The “customer value” concept, common in retail businesses, does
not work under a managed care network management model.
 Practice financial health and profitability is determined by how
effective and efficient the Practice is in the overall delivery of
services… clinical and non-clinical… and the value of these
services to the patient customer as well as referring physicians.


Presentation Agenda

for Practice
Agreement

A&M’s Three Phase Contracting Approach
III. Managed Care Contracting Strategies and Different Negotiating Approaches

The payer contracting process should be integrated with the practice’s
strategic financial planning process to allow management to better determine
their short-term/long-term financial targets, link financial targets to
operational strategies and also align operational plans to financial targets.

Develop Managed Care Negotiate Contracts Implement Contracts
Contracting Strategy & Financial
• Initiate Contracting Strategy/Proposal • Prepare Work Plan to Ensure Accuracy
Planning Analyses Process with each Payer (new or prior of Contract Load, P-4-P and Care
• Internal Assessment – Payer Contract to contract renewal) Management Program Implementation
Performance, Modeling, Current • Collect Data on Practice Cash Issues • Integrate Contract into Patient Access,
Practice Margin Gap, Net Revenue and Include in Negotiations Process Charge Capture & Patient Accounting
Opportunity Assessment & Validation (i.e., for a concurrent resolution) • Payer Relationship Management
• External Market Assessment – Payer • Counter Proposal Process and Rate • Revenue Recovery and Denial
SWOT Analysis, Market Review, Sensitivity Modeling Analyses Management (ongoing process)
Product Share, Physician Referrals, • Review and Finalize Contract/Rate
Reimbursement & Alliance Options • Integrate with Payer Portfolio, Physician
Amendment Referral Management & Network
• Develop Overall and Payer Specific • If no Acceptable Contract… Prepare Development /Integration Strategies
Contracting/Pricing Strategies, Tactics, Termination Disruption Analysis,
Goals and Objectives • Monitor Payer Contract Performance
Patient Retention/External
• Standardize Contracting Process, Communications Strategy and • Train Staff
Pricing/Proposal Templates & Practice Terminate Contract • Implement Outsourced Services (if
Negotiations Team applicable)

As part of the strategy formulation process, a
leadership planning retreat is recommended

Payer Contracting: Negotiating Process/Approaches

WHICH APPROACH FAVORS THE PAYER? THE PRACTICE? WITH EMERGING
PROVIDER BUSINESS MODELS… WHAT WILL YOU NEED TO PREPARE FOR?
Low Risk, Low
Investment, Minimal Enhanced Moderate Risk, Some
Traditional
Performance… Payer Market Investment, Enhanced
Market
Defined Market Drive Performance and Link
Payments and
Driven
{Small {Group to Strategy… Largely
Process… Most Practice} Practice} Favors the Payer
Common w/Practices

High Risk/High Return, Higher Risk, Strategy
Strategy Drives Process, Redefining Modified Drives Process,
Alignment w/Physicians, Cost Plus Cost Plus Moderate Investments,
Significant Investments, {Clinically {PHO-IPA- Better than Average
Best Practices… Integrated} Hospital} Performance… more
Redefined Relationships Balanced Outcomes,
with Payers, High Higher Termination Risk
Termination Risk
Practice Negotiating Models

Payer Physician Contract Outline - Best Practices

Understand What You Are Agreeing To!!!

Payer Contract Negotiations – Key Questions

 How does the practice’s relationship with each key payer
relate to its overall business goals and objectives?
 Does the practice’s business goals and objectives with key
payers drive its pricing and negotiating strategy?
 Is the practice making or losing money on its key payer
contracts? How does the practice know?
– Can the practice improve its net revenues?
 Does the practice’s relationships with payers help the
practice to be more competitive in the marketplace?
 Patient loyalty is to… the practice or the payer?
 What will happen to some payer reimbursements if Gov. cuts
payer plan payments… are fee schedules linked?



 How are the practice’s top line services impacted by its payer
contracts? Protections from silent PPOs?
 How are the practice’s competitors using payer contracts to
their… Advantage? Disadvantage?
 Practice’s patient service market share by payer product?
 How do the practice’s contracts impact operational/capital
planning?
 How will the practice’s decisions on key payer contracts impact
patient referrals to/from the practice?
 What staffing and technology capabilities does the practice
require to optimize its payer revenues?
 What is the practice’s compelling value proposition for payers?
 What are you committing to in the contract?



 What is the reimbursement relative to practice charges, cost and
to Medicare?
 What are the administrative requirements under the payer
contract? What pre-authorizations are required for what specific
services, and how will they impact current referral patterns?
 Who determines medical necessity and how is it defined?
 What are the specific eligibility determination requirements and
how are retroactive terminations handled?
 What are your appeal rights, how many levels of internal and
external appeals are allowed and how are disputes resolved?
 How are underpayments and overpayments to be handled?
 Is the practice required to accept the payer contract under an
overall “all payer” contract with the payer?



 Is the agreement an evergreen agreement and what are the
term/termination provisions?
 What is the annual inflation factor?
 How and where has the payer modified the reimbursement fee
schedule from traditional Medicare?
– Is the fee schedule provided?
 How are non-par referrals/coverages handled?
 What P-4-P incentives are involved and what are the specific
mechanics to obtain? Realistic? Meaningful?
 If capitation or bundled payments are involved, what is allowed
as a billable service outside the capitation? Risk adjustments?
 How are new services/new technology added and reimbursed?
 What are the payment timelines? Guarantees?


Presentation Agenda

for Practice
Agreement

Emerging Provider Business Models
IV. Physician Alignment and Integration: Evolving and Emerging Business Models

 Physician alignment with hospital clinical care
operations is critical for…
– Better managing the care delivery process.
– Gaining added resource efficiencies.
– Expanding profitable patient service volume.
– Improving bed management turnover and ALOS.
– Optimizing managed care net revenue potential.
– Developing a sustainable competitive advantage over
primary competitors.


Emerging Provider Business Models: Physician Integration

Physician High…
Alignment of
Integration Risk & Return
Continuum
Clinically
Joint Venture Integrated IDS
• PHO/IPA/PO • Clinically Integrated
PurchasePHO/IPA/PO
• MSO/PSO
• Asset Purchase • Surgery, Urgent & • Contractual and/or
Employment • Non-Competes Imaging Centers Ownership Stake
Low… • Employment • Hospital Syndication • Asset Purchase &
• Employment Employment/Medical
Alignment of & Ownership
• Independent Group Foundation
Risk & Return Contractors • Joint Ventures
Cooperation
• Medical Directorships
• On-Call Coverage

How will your practice address
physician alignment and integration?

Emerging Provider Business Models and Payments

Continuum of Financial/Clinical Integration
Full Global High The degree of
Capitation provider
Episodes of Care & integration and
DegreeofFinancial Risk

Gainsharing
alignment of
Global Hospital
Capitation financial incentives
Global Hospital across the care
Case Rates continuum, will
Medical Homes Low High determine the
Acct Care Orgs ability of providers
(Physician Model)
to accept
Risk Withholds
& P-4-P risk/reward based
Hospital PPS (IP/OP) payments, while
FFS Charges Low remaining
financially viable.

Degree of Clinical integration
© Copyright 2010. Alvarez & Marsal Holdings, LLC. All Rights Reserved.

Provider Business Models: Clinical Integration

 Clinical Integration
1996 Department of Justice and Federal Trade
Commission Statements of Antitrust Enforcement
Policy in Health Care
– "[A]n active and ongoing program to evaluate
and modify practice patterns by the network's
physician participants and create a high degree
of interdependence and cooperation among the
physicians to control costs and ensure quality."

(*) Note: Above is excerpted/summarized information and does not represent a legal opinion.


Cost of Care Drivers: Insurance Vs. Performance Risk

Breaking Down An Episode of
Care and Associated Costs Insurance Risk – How sick or
well patients are… providers have

Provider Performance Risk
Wtd. Cost/ Specific Cost/Process for no control over this. Capitation
Insurance Risk

Episode of Care/ Each Service
Person = Provided models in the 1990s contained
insurance and performance risk,
which caused major financial
No. of Care
No. Specific
Clinical Episodes/
Processes performance challenges for many
Provided/Service
Person (times) providers.
(times)

No. & Type of
Performance Risk – Once a
No. Episodes of
Care/Specific
Services patient has an illness or condition
Provided/Specific
Clinical Episode and enters the healthcare system
Episode of Care
(times)
(times)
for treatment, it is appropriate for
Provider Performance Risk
providers to be held accountable
for their performance in delivering
Payer cost containment through price, payment
care, the quality of the care and
rules and utilization controls accomplishes little
the cost of the care.
with respect to quality or volume of care provided.


Episodes of Care Payment Methodology Elements

Key Variables
 Length of
time EoC Current
EoC Type
applies to. Payments
 Services to
be bundled
into an EoC
payment.
Tech Issues
 Yours?
 Key
Payers?

Source: Paths to Healthcare Payment Reform, Center for Healthcare Quality & Payment Reform (www.paymentreform.com)


Market Conditions Favorable for Clinical Integration
 Traditional F-F-S and managed care payment sources are looking
to slow payment growth, freeze or reduce payment levels to
providers.
 Increasingly difficult to the sustain traditional business models.
 Technology has become a key factor for remaining competitive…
clinical and administrative.
 Major purchasers of healthcare are demanding evidence of
improved quality, cost controls and utilization efficiency. Managed
care health plans are increasingly expected to do more for less
money, which will also impact payments to providers.
 Practice economics are declining and physicians are overworked.



Market Conditions Favorable for Clinical Integration
 Costs of care delivery are perceived or viewed as being too high.
 Quality is perceived as mediocre and there is much variation in
practice patterns among physicians.
 Very little meaningful coordination of inpatient/outpatient/
ambulatory/chronic care services across the care continuum.
 Decreased cooperation between hospitals and physicians with
increased competition between both with each other… i.e., both
going after the same fixed piece of the pie vs. looking to work
together to increase the size of the pie piece.
 Provider organizations best positioned in future state market
environments will be those organizations which can effectively
attract and retain patients.


Value Proposition for Hospitals and Physicians?
 Allows for “pooling” of data and information across payers.
 Provides for common standards and enforcement mechanisms
that are not readily achievable by payers in the marketplace.
 Provides a single efficient vehicle for physicians to interface with a
large number of health plans.
 Provides important vehicle for the hospital to achieve quality and
community mandates with physician participation.
 Enables efficiencies and quality enhancement that cannot be
achieved by physicians and/or hospitals working independently.
 Recognizes that physicians in a non-risk health plan environment
can achieve efficiencies (cost and quality) without having to merge
their practices or enter into a hospital employment model.


III. Clinical Integration as a Better Model for Managed Care Contracting

Value Proposition for Hospitals and Physicians?
 Allows Hospital, Other Network Facility and Ancillary Services
Providers to achieve efficiencies and clinical integration with
network physicians and affiliated physician organizations.
 Improves the value for the health care purchaser and the patient.
 Employs significant financial incentives and other aspects of
financial integration.
 Collects relevant outcome data for consumers.
 Increase access to market share and a more favorable payer mix.
 Prepares providers for future payment methodologies that will hold
them accountable for performance risk.
Is any of the above materially inconsistent with the goals of
both providers and payers for care and cost management?


1. Development and Organization Clinical Integration
 Clinical Integration Readiness Assessment Development Process
 Management/Clinical Development Team
 Analysis of Current Legal Structure
 Physician Alignment and Training
 Analysis of Current Payer Contracting
 IT Technology/Data Warehouse
2. Initiate Clinical Integration Activities
 Data Collection for Clinical Programs
 Common Patient Registry
 Network Refinement/Recruitment
 Disease Management, EBM Clinical
Protocols, and EMRs
 Training and Physician Leadership
3. Regulatory Compliance and Group
Contracting
 FTC Guidelines/Approval
 Standardize and Integrate Protocols
 Clinical Integration Network Contracting
 Measure, Monitor, Report, and Educate


Illustration: Clinically Integrated
Community PHO Network Model
How will payers and
Acute Care Full Service Hospital
non-clinically and Related Services
integrated providers Affiliated/Community-Based
Physicians, Mid-Level Practitioners
respond to clinically & Allied Health Providers
integrated, multi- General and Advanced
Medical Home Networks
provider
aggregations which Other Rehab, Sub-Acute,
Behavioral Health & Ancillary
Services Facilities
can do joint
contracting? Other Acute & Specialty Hospitals
(e.g., Children’s & Cancer Hospitals)


Physician - Hospital Integration

 There is no one-size-fits-all approach.
 Providers need to invest more in affiliations rather than less…
traditional “cooperation” models are ineffective.
 A shared culture, common vision, and operational support
drive success more than economic incentives.
 A defined business strategy should drive physician integration
decisions.
– Will the traditional practice business model be a viable and
sustainable business model in your market in 3 to 5 years?
 Balanced risk/reward compensation models work best with
and for physicians.
 Evolving payment models favor more integration vs. less.

Presentation Agenda

for Practice
Agreement

Christopher Kalkhof
V. Contact Information and Speaker Bio
▲ Christopher Kalkhof is a Director with Alvarez & Marsal’s Healthcare Industry Group based out of New York, with more
than 24 years of diverse healthcare and managed care management experience. He specializes in managed care
strategy development and contract negotiations; contract implementation and integration with revenue cycle; provider-
payer collaborations; physician alignment and integration; strategic planning and new product development.
▲ Over the last several years, Mr. Kalkhof has spent much of his time assisting provider clients to optimize their net
managed care revenue potential, resulting in net rate increases and revenue improvements in excess of $435 million.
Over the span of his career he has gained managed care related work experience in over 20 states and has directly
negotiated over 240 payer agreements for clients which have included hospital, behavioral health, physician, IPA/PHO,
home care, hospice and skilled nursing facility contracts. He has also reviewed hundreds of additional payer contracts.
Christopher Kalkhof,
▲ Current, recent and prior projects include:
FACHE
– Developing a broad-based managed care strategy and leading a contract rebasing/negotiations process, involving
Director over 50 payer product contracts; inclusive of select payer collaborations and employer marketing.
– Conducting a managed care revenue improvement assessment for a health system in a debt covenant violation
Office with its creditors, to determine net revenue improvement opportunities.
(347) 254-2433 – Managing a group health benefit payer selection process and building a tier-1 benefit provider network wrapped
around a hospital and its medical staff.
Mobile
– Conducting a risk mitigation/EBIDA improvement opportunity assessment as part of a due diligence “clean team”
(716) 912-0309 review of an acquisition candidate hospital, which also included a for profit, clinically integrated PHO joint venture.
E-Mail – Evaluating a hospital’s current contracting strategy, contract content and physician-clinical integration options.
– Managing contracting process for a health system with 1,400 employed physicians/mid-level practitioners.
ckalkhof@
▲ Prior to joining A&M, Mr. Kalkhof was as a Director in a Big 4 firm’s provider revenue cycle consulting practice and also
alvarezandmarsal.com served as their national managed care lead. Earlier, he served in a number of interim management and consulting
Website roles including: SVP of Payer Relations for a nine hospital health system; VP of Managed Care for a community
hospital after the hospital’s separation from its parent health system; and as a functional Director of Managed Care for
www.alvarezandmarsal a community hospital while in bankruptcy and post-bankruptcy emergence. Mr. Kalkhof has also held management
.com positions in a practice management firm, a health insurer, a HMO and a LTC facility.
▲ Mr. Kalkhof received his Master of Health Administration degree from Tulane University and his Bachelor of Science,
degree from Allegheny College. He is a Fellow in the American College of Healthcare Executives and a frequent
presenter on managed care revenue improvement topics for the HFMA, ACHE, MGMA, WRG and other professional
groups. In 2008, Mr. Kalkhof served as a member of the New York State Office of Medicaid Inspector General’s
Medicaid Managed Care Compliance Program Guidance Advisory Committee.

The Alvarez &Marsal Advantage

 Founded in 1983, Alvarez & Marsal (“A&M”) is a leading independent global professional services firm with more than 1,700 professionals
based in North America, Europe, Asia and Latin America.
 Currently 39 offices globally with headquarters in New York, London, and Hong Kong.
 Offer deep financial, tax, operational and industry expertise.
 Deep bench of talent across industries with the unique ability to transition between financial, operational and advisory roles to meet client’s
changing business needs.

A&M is the leading, independent global professional services firm which excels at leadership, problem solving and value creation. A&M’s
Healthcare Industry Group practice represents an assembled team of healthcare professionals who bring a significant track record of working
with management, boards of directors and stakeholders of both investor-owned and non-profit providers, payers and suppliers to improve
operational, financial and clinical performance.

A&M’s managed care consultants and interim management professionals bring deep best practices expertise in the development of managed
care contracting and physician alignment strategies, payer contract negotiations, and the implementation / integration of contracting and
physician alignment strategies into an organization’s overall clinical and business operations.

Our managed care services are aligned with your contract management cycle and can be tailored to meet your specific needs and market
environment. We work with your team, serving in advisory or interim management roles, to ensure your success with your overall payer
contracting strategy.

www.alvarezandmarsal.com

Copyright 2010. Alvarez & Marsal Holdings, LLC. All Rights Reserved. 46
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Managed Care Contracting Strategy

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