The Bottom Line

A primer on managing managed care

Patricia Hudson
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From the July/August 1994

PRIVATE PRACTITIONERS WHO WANT TO SURVIVE TODAY must know how to work smarter, and market and provide quality customer service. It is essential either to have someone who helps you keep your eye on the bottom line or to educate yourself about running a business. Doing both is the safest strategy.

It’s increasingly clear to everyone that if you’re starting from scratch in today’s marketplace, the first step to establishing a solid practice is obtaining contracts with managed care companies. To approach that task systematically, draw up a list of the large employers in your area (the chamber of commerce in most cities has an annual directory with their members’ names, size, addresses and telephone numbers). Call their human resource office and ask them who their insurance carrier or carriers are and who their managed care company for mental health is. It is important to stress that the managed care is for mental health, because there often will be different managed care companies for medical and mental health. Once you have this information, you can call the managed care company and ask for the provider relations department. They will probably quiz you about your degree, how long you have been licensed or certified, how many times suit has been threatened or filed against you (There should be none if you want to get a contract!), and how quickly a client can see you after an initial contact. Once that initial questioning is over, they will check their computer files to see if they need providers of your specialty in your city. Managed care companies like to hear buzz words like “goal-focused,” “time-limited” and “outcome-directed.” They will also be interested in the names and phone numbers of other managed care companies and employee assistance programs with whom you have worked.

If the managed care company indicates they are not taking any applications in your city and you already have a client insured with them, ask the client to call the provider relations department, ask for the person who just turned you down, and inform them of the fine therapy he or she is receiving and the time, money and trouble it would take to switch therapists.

When the long, torturous application from the managed care company finally comes in the mail, approach filling it out as you would a job interview as an opportunity to sell yourself and your professional expertise. Emphasize your strengths and check off as many specialties as you honestly can. (This increases your chance of actually getting a referral before the year 2001.) When a prospective client calls the managed care company, they check their data base before they make a referral. We know that some people recommend that therapists carve out a small, distinctive niche for themselves, but only if they think that niche is in great demand.

Managed care companies have a basic distrust of therapists who are in solo practice. They are looking for people with their own networks of support and back-up. They will be concerned, for instance, about who will handle an emergency for you if you are gone for the weekend or can’t be reached in the middle of the night. Will your client be able to get in touch with one of your colleagues or will they be calling the managed care company hot line? Holding regular staff meetings or having a supervisor who is a psychologist or psychiatrist is a plus, because that implies that your work will be checked and that you are less likely to make a mistake. Mistakes mean that the client will be suing the managed care company they don’t like that.

As everyone knows, managed care companies are looking for providers who use a brief, but effective, model. If you have measured the average length of therapy and done client satisfaction surveys, all the better. We run a sample of 100 clients at least once a year and calculate the average stay and the reported satisfaction with our services, as well as soliciting any recommendations for improvement. On more than one occasion, we have sent the results of our customer satisfaction survey to a managed care company. If a company has the choice of a group of therapists that has done follow-up research versus one that is guessing about length of stay, which do you think they will pick?

Dealing with managed care companies involves more than getting contracts. You need to keep all sorts of information handy to be able to help your clients know what to pay and what you, as the provider, can count on from the insurance company. With so many insurance companies and managed care companies, plus the mergers between them, policyholders can be as confused as we are. Frequently at our center, a client will call saying he or she has insurance with some obscure company we have never heard of. Our receptionist will find out if the new prospect has coverage for mental health by calling the insurance company directly with the group and individual policy numbers. She may make several calls, beginning with the insurance company, which may then refer her to the managed care company. There are two questions that you want answered by the company: “Is there a deductible?” and “Is the client supposed to make a co-payment?” Frequently both will apply, and it is best to know this up front. To avoid confusion, we developed what we call the Managing Bureaucracy Sheet (a summary of different plans, what they each offer and the procedures we need to take in securing reimbursement). It has the name, address and phone number of the managed care company, the employers they represent and a few brief details of what payment arrangements are usually made. Around our office we say, “In case of fire, grab The Sheet!”

WE GO TO SOME LENGTHS TO MAKE sure that we know the competition in our area so we can improve our own services. We once had one of our clerical staff who wanted help with a marital issue go to some of the four other agencies in town. We told her we would pay for up to two sessions at each of four clinics in return for her report on what the therapists did during the first session, the quality of the facilities, the intake procedure and how the initial contact was managed. Several things struck us about her experience.

In three out of four agencies, the person receiving the initial phone inquiry did not know the costs of therapy. During the initial session, there was typically little attention to helping the client develop specific goals for therapy. With one therapist, our staff member asked at the end of the first session, “But what about the conflict I’m having with my husband?” The therapist said, “We’ll get to that next session.” From our brief therapy viewpoint, that was a wasted session. There also was little thought given to making new clients feel welcome no refreshments in the waiting room, or, in some cases, even a clean bathroom. If I were running a managed care company and were looking for a place where I was going to send hundreds of clients, I would definitely find out exactly what kind of treatment my customers were going to receive.

At our center, the therapists call new clients before the first session to remind them of the appointment, ask them if they have any questions about what therapy will be like, make sure they have the directions to our office, and generally let them know that we are looking forward to helping them with the challenges in their lives. Having been clients ourselves, we know the anxiety that is experienced before that initial session and we want to ease the discomfort our clients may feel. Besides, the greatest numbers of no-shows are for the first session, and by calling first-time clients, you will save yourself a wasted hour, get the relationship off to a good start and help the client to feel confident that they have made the right decision in choosing you as a therapist. It is both good business and good manners.

It is simply bad customer service to have a client disappear and not know why. As Moshe Talmon pointed out in his book, Single Session Therapy, most clients don’t come back because they got what they wanted, but that is not always true. If you can let clients know you care about what happened to them, then you may be able to turn an unhappy customer, who might have bad-mouthed your business, into someone who would refer other clients to you or come back for another try in the future.

We have often been surprised at how easily clients forget the name of their therapist. Pat once sat next to a man on an airplane, chatting with him for over an hour. He never remembered that he had been in therapy with her. If you want clients to return when a new problem comes up, remind them who you are. Send them some reminder even ayear after they have left therapy, in the form of a birthday card or some announcement of something you are doing.

Create the same atmosphere in your office that you would have in your home, greeting clients like company, albeit shy company that you do not want to intrude upon. Make sure they are physically comfortable. We have fresh coffee, bottled water and pretzels available for our clients. We used to have hard candy, but a 2-year-old nearly choked from having candy lodged in his throat. Low fat, but deadly!

Clients are your obvious customers, but so are referral sources, insurance companies and managed care companies. We always write to anyone who refers, letting them know the client showed. ( Of course, we have the client put in writing that they gave us permission to thank the referral source.) If it is another professional, such as a physician, we tell them a little about what we intend to do with the client. While most professionals do not want a time-consuming telephone call, they do appreciate something in writing. It only takes a few minutes, but it is likely to result in a future referral.

MY DAUGHTER, ANGIE, WHO IS STUDYing to be a psychotherapist, says she remembers how much she was influenced as a child by hearing me talk about my work as a psychologist and seeing the way I lived. She says that it seemed a wonderful kind of job that let you get to help so many different people, have enough money for a nice house, and enough time to enjoy life. I worry for her, sometimes, and hope she won’t be disillusioned; I tell her that she may not have the same freedom I had to choose the clients she wants to see, to determine the kind and length of work she does with each individual, to set her own fees and still be able to count on a good income. I wonder if she realizes just how large a toll she will pay in professional time and psychic energy for the oceans of paperwork generated by managed care, the strict, bureaucratic guidelines for practice, the greater number of hours she will have to work for less money.

And yet, even if she doesn’t already know about these realities, I doubt that they will discourage her once she starts practicing. I suspect that she will find, even as I still do, that whatever the complications and frustrations, however binding some of the strictures, she will be constantly buoyed by the joy and challenge of the work, the profound satisfaction of seeing unhappy people gradually come to feel better, even transform themselves through their encounter with her. The increased burdens of managed care probably never will outweigh the basic truth of this profession the work itself is the real reward, the only one that matters in the end.

Patricia Hudson, Ph.D., is the director of the Hudson Center for Brief Therapy in Omaha, Nebraska. Her most recent book is Making Friends With Your Unconscious Mind. Rhonda Applegarth is the business manager of the Hudson Center.