Hanger’s MCO: Where Is It Going?

Home > Articles > Hanger’s MCO: Where Is It Going?
By Miki Fairley

The recent launch of Hanger Orthopedic Group's new managed care organization (MCO), Linkia, in mid-March has added a potent new element to the O&P scene. Where is Linkia headed? What are its goals and objectives?

In an interview with The O&P EDGE, President and COO Michael Murphy and Martin Payne, vice president of Business Development and Client Relations, discussed the new company.

What emerges are several facets, including short-term goals and long-term objectives. In the process, Linkia is taking on some ambitious initiatives, including tackling some long-standing challenges in the O&P field--which may help turn back the tide of downward reimbursement levels.

Linkia has two basic components, according to Murphy: 1) serving as an administrative interface between the payer and provider; and 2) coordinating care management.

Electronic Storefront

Michael Murphy
Michael Murphy

"It serves as an electronic storefront that cleans up the interface to benefit both payer and provider," Murphy said. "O&P companies don't have to worry about 20 or more phone numbers and addresses; they just need one--and they enjoy shorter remittance cycles." Linkia also will provide services such as verifying eligibility, obtaining prior authorizations, checking status of claims, and accessing provider manuals, via customer service professionals who understand both O&P and payer requirements.

"From the payer perspective, what they see in O&P is largely disorganized, with myriads of contracts and fee schedules--lots of paper flying around," Murphy continued. "With Linkia, they just need one phone number and address, with claims submitted electronically, adjudicated by the payer, and remittance returned electronically.

"Although it has an administrative front end, it is first and foremost modeled after a classic MCO that is clinically driven," Murphy explained. "So, all its activities are related to care management; even customer service will be driven by clinicians. Certified prosthetists and orthotists, physicians, and other healthcare professionals will work together to oversee the activities of Linkia to ensure that it is patient-centered, provider-friendly, and collaborative with payers, so that there is total quality management from both a quality-of-care and a quality-of-service perspective."

Separating O&P From DME

One challenge Linkia is taking on is the problem of separating O&P from durable medical equipment in the minds of insurance companies and other payers. "Our objective right now is to change the dialog and educational awareness between payers and the O&P profession," Murphy said. "The profession has been viewed as ensconced in the DME space, which is being subjected to dramatic reductions in reimbursement. Payers perceive that space to be largely a commodity space. Since they don't see discernible differences between one walker and another, they want volume buying and reduced price. In O&P, we are more clinical; driven by the practitioner's skills more than the actual componentry being used. Understanding this factor is critical in arriving at fair levels of reimbursement."

Murphy also discussed the materials aspect, since O&P devices don't fall into the same economies of scale that payers receive when they buy medical supply commodities. "We've had some success in educating them about this, so that there is a fair trade-off between their expectations of what the volume should be vis-à-vis any fee discounting we would offer them."

But when Medicare fee schedules get frozen for three years, "The private payers take note and say, Aha! We see something here; we're going to jump onboard as well," Murphy noted.

Creating Evidence-Based Care Pathways

Martin Payne
Martin Payne

The other big challenge is the lack of sufficient data which demonstrates scientifically the effect O&P has on the rehabilitation continuum--a factor which can affect reimbursement levels. "We are trying to get away from a system where everything over a certain dollar amount needs prior authorization, by creating evidence-based treatment criteria for specific conditions and diseases and guiding professionals into treatment pathways," Payne said. "To develop these evidence-based medical pathways, outcomes data are needed. And here is where a comprehensive, long-term initiative comes in.

"The good news is that payers understand that getting to the point of scientifically validating our care takes years," Murphy said. "They understand that we're not saying, for instance, that in three months we're going to have a definitive outcomes study that proves the long-term benefits of stance control orthoses on the CVA [cerebrovascular accident] patient. What we are committing to is to co-author with our clients and the profession how to get to that level of discipline and prove beyond a shadow of a doubt what the profession's role is as a clinical discipline, apart from a provider or distributor of componentry.

"The O&P profession can't withstand more sharp cuts in reimbursement and survive as a profession," Murphy continued. "And neither payer nor provider can stand the administrative costs of micromanaging utilization.

"The world has gone to retrospective review, establishing patient outcomes and clinical pathways and checking on the back end to ensure there is appropriate utilization," he said. "If we don't get in front of this and co-author outcomes studies and evidence-based care pathways, we're facing more dramatic reductions in reimbursement levels. Payers are at the point of saying, If you want to do X up to point Y, we'll pay for it. If you want to go beyond that, fine--the patient will pay for it.' That fundamentally changes the dynamic for the profession.

"What we're looking to do on the utilization side is establish an element of trust, avoiding prior authorizations based on dollar amounts," he continued. "Prior authorizations and medical necessity reviews would be needed only for cases outside the medical guidelines. Those guidelines would be determined through science; thus we preserve the relationship between the payer and the profession."

Data Mining for Outcomes Evidence

To start creating clinical care pathways, Linkia is looking to data mining in collaboration with its payer clients. "When you consider the millions of data points they have, we can track a certain disease or condition and prosthetic/orthotic use. For instance, we can track levels of amputation; whether they did or didn't receive a prosthesis; what kind of prosthesis and three years later, how have they adjusted, etc." Data mining will help steer us, Murphy explained. "For instance, what if the data show that not enough patients are getting prostheses--then a utilization increase strategy is called for. It's not always about reducing usage levels. Another example could be data indicating that getting a prosthesis early on results in better outcomes," he added.

Payne noted that data could show extrinsic benefits from O&P care--how it impacts patient behaviors in other areas, such as nursing home usage and other aspects of their lives. This could be a cornerstone in developing care pathways, he pointed out.

Linkia's first major national contract is with United HealthCare, headquartered in Minnetonka, Minnesota. Collaborating with large national insurers with millions of covered lives opens the door to comprehensive data mining opportunities in developing care pathways.

"As a storefront, Linkia will be a functional data warehouse," Murphy noted. "The first point is access to data. We'll start to crosswalk this total patient function data with specific O&P data to start some pretty exciting modeling around O&P patient outcomes data."

Contracting with Payers

Linkia also performs the typical network service of obtaining contracts and administering them. "Essentially, what we do is sit down with a payer and help them design their O&P strategy and offer them a wide range of solutions," Murphy explained.  Strategies are tailored to the payer's requirements. For instance, in one case, Linkia may not own the contracts; the payer does, and Linkia serves as an administrator. Another payer may want to outsource everything and have Linkia run the contracts. They tell Linkia the network strategy that they want to execute. Linkia then lines up providers, which can include independents as well as Hanger and OPNET members. "There are not enough Hanger and OPNET facilities to provide what some payers want, so we are expecting a fairly robust network," Murphy said. Depending on a payer's network strategy, such as geographic coverage, there might be a combination of Hanger and independent practices.

Linkia is separate from Hanger Prosthetics & Orthotics, which is one of its network customers, Murphy noted. "An independent would get the same level of resources and treatment. Currently we plan to set a single national fee schedule [with each payer], then as claims are adjudicated, we would reprice the claim at the back end to a more regional fee schedule, taking off an administrative fee."

What's Planned Ahead

In the next three to five months from the time of this interview (mid-May), Linkia plans to have full scaleability to accomplish many, if not most, transactions electronically rather than manually. "We're building our health services infrastructure and beginning to pour the foundation on some of our quality management initiatives. These will include quite a bit of interaction with various professional and trade organizations to help unfold the healthcare aspect," Murphy said. He continued, "From the business development aspect, we are having discussions with a number of payers on how we can better collaborate with them."

Murphy summarized Linkia's benefits: "The near-term benefit is cleaning up the administrative front end, which benefits everyone. The long-term benefit will be co-authoring care pathways to ensure that patients are getting the care they need when they need it, along with appropriate economic value to long-term function, so that both provider and payer can say, We've done the right thing for the patient.'"

For more information, visit www.linkia.com