| by Jeffrey Zimmerman, Ph.D. and Elizabeth Thayer, Ph.D | CPG Behavioral Health Resources: An Ongoing Transition
Introduction: CPG Behavioral Health Resources (CPG) was founded in 1985 by two psychologists. It was envisioned as a state-wide group practice designed to provide the same quality of outpatient mental health services throughout Connecticut. Since its inception CPG grew to seven offices with approximately twenty clinicians. It has functioned as an integrated or “true group practice” with common policies and procedures. Its clinicians are W-2 employees. Psychology, social work and psychiatry are represented among these clinicians. In the communities it serves, CPG is well known and often viewed as a quality behavioral health provider of choice. The vast majority of referrals come from physicians, schools, and prior patients. While it was initially anticipated that services would be provided to large employers, it readily became apparent that managed care companies would be a primary referral source. As managed care became more prevalent in Connecticut, CPG became very active in securing provider status on multiple panels and participated in many managed care contracts. CPG became a partner in a management services organization designed to obtain managed care contracts and run a network of multiple provider groups throughout Connecticut. From a business standpoint, one major allure of managed care was an increase in the volume of patients. However, the increase in volume did not come without its costs. Part of the costs were financially based. For example, there were increased expenses for computer networks. Legal fees increased. Administrative and clerical workloads skyrocketed. Clinicians needed to spend more time on administrative matters (such as completing Outpatient Treatment Reports). If it takes a clinician approximately twenty minutes to complete an OTR and that clinician has six OTR’s per week to complete, then two hours per week is spent on this administrative task. At $100 per hour over 46 weeks of practice per year, this would equate to $9,200 of lost revenue per full-time clinician. The impact on clinicians was also felt as they experienced more difficulty in making clinical decisions and managing the care of their patients. Collections were reduced as was reimbursement per unit of service. This led to decreased compensation for clinicians as well as decreased cash flow for the practice. Overall, morale was beginning to suffer and while some of the partners of the practice actually brought in more income to the practice from one year to the next, they saw a decline in their compensation over the same time period. The Crossroads: After approximately three years of heavy managed care participation, CPG was at a crossroads. Some of the partners believed that having access to a greater volume of patients through managed care was well worth the declining fees and increased expenses. Others thought that it was worth the risk to shift the practice out of managed care and seek other payors. In short, the debate could best be described as one in which the practice was wrestling with its own identity and whether it was going to be a high volume, discounted, broad-based clinical practice (perhaps akin to a Walmart in retail) or a less broad-based and less discounted service provider (such as Nordstrom). However, the fear of making a radical change was substantial. There was a concern that a shift out of managed care would lead to substantial decreases in referrals, visibility and prestige throughout the community, and hence a loss of revenue. Clinicians were concerned that their skills were not generalizable or marketable and feared involvement in new ventures and areas of practice. CPG decided to attempt to “straddle the fence” for some time. Responsibilities of partners were clarified. Some partners focused more exclusively on building income from managed care sources. Others focused on developing alternative revenue streams. This strategy served to diversify the practice against a major loss. However, it also tended to be divisive. As a result, the culture of the practice appeared to be different across different offices. The practice remained at this crossroads for quite some time before choosing a path. Making the Choice: It became increasingly clear that the practice could not indefinitely survive approaching its business from both positions. The relative cost of providing treatment to some of the managed care covered patients was becoming prohibitive as the fees continued to decline to a point of being approximately fifty percent of our usual and customary fee. Additionally, some of the larger contracted payer sources were the worst at providing timely reimbursement (and at times reimbursement at all) for a significant number of visits. A tremendous amount of energy and resources were spent negotiating and following up with these companies. The partners of CPG became less tolerant and accepting of the duality of vision and it became clear that it was time (or perhaps past time) to withdraw from some of the untenable contracts. The practice decided to shift its priority to building non-managed care sources of referrals and revenue. Beginning the Paridigm Shift: It became crucial to first have all of the partners on “the same page.” This was not as easy a task as might be otherwise assumed. The differences in philosophy were significant and the risk-tolerance among the partners was quite varied. Some partners had trouble believing that viable alternatives to managed care existed at a level that would support all of the clinical employees. It became necessary to begin educating each other about alternatives to managed care participation and reconsider our options. The following points had to be underscored:
It was decided that three areas would be initially targeted for development. These were:
In retrospect, the key to this process was getting the commitment to change and the commitment of the partners to take the risk to actively lead the practice forward. This also meant accepting the reality of increased workload and the possibility of decreased compensation during the transition. Leadership through Change: The difficulty that the partners had in reaching a unified commitment to change was exponentially greater with the staff clinicians. Their beliefs about their ability to change, the risk of losing income, and questions about the generalizability of their skills were even more varied than those of the partners. Consequently, a process of educating and mentoring to foster such change was needed. Parts of our weekly staff meetings and one on one supervision sessions were used to discuss options with the staff. “Hallway meetings” and “brown bag” spur of the moment lunches were used to provide informal education and support. Partners informed staff of the success of their endeavors to serve as role models and engender hope. Clinicians were first encouraged and then told they needed to begin expanding their practices (the payer mix, not the hours worked). Statistical information was provided about payer mix and its impact on compensation. For example, adding one hour of a support group to one’s caseload, in place of an hour of psychotherapy reimbursed at managed care rates, would lead to over $5,000 of direct compensation paid to each full-time clinician over the course of a typical year. The partners also had to repeatedly model behaviors consistent with the shift in approach. They had to run groups, secure consulting contracts, run workshops and provide forensic parent counseling and evaluations. They had to inform the clinicians of their successes and give them supervised opportunities to succeed in this work. The success of this modeling and direct (not facilitative) approach was most obvious in those offices where the partners’ behavior was most consistent in this regard. Offices in which the partners were less committed over a shorter period of time for this change were less successful in obtaining a rapid transition. Leadership needed to be clear, directive, supportive, consistent, and obvious. The Outcome: A number of partners and clinicians began to make these changes. Groups were started for children and adults. Two partners redoubled their energies at building organizational consulting, workshops, and employee assistance program services. One partner began focusing her energies on the establishment of relationships with family law attorneys to promote forensic parent counseling and custody evaluation. During the transition, a number of low-maintenance managed care contracts were maintained. This enabled us to make the shift in a manner that reduced the risk of a major downturn in income due to a lack of referrals. As a matter of fact, after withdrawing from three of the four major panels in our area we found that case loads and revenue were not substantially affected in a negative manner. Conversely, morale and cash flow both improved. The ratio of dollars billed to dollars collected also improved for those clinicians who were doing less managed care work. Additionally, there was a greater focus on clinical care (versus administrative issues). Presently, there is now a greater sense of unity across the practice and especially across the management team. CPG continues to provide a diverse range of services and is now able to more freely give discounts to patients or clients who are truly in need (and not just to the shareholders of a major insurance company). Additionally, we have started a mentoring program in which all clinicians who work more than half time are expected to spend two hours per month with another clinician in the practice who serves as a mentor. This was designed to help all of the clinicians (including the partners) continue to develop their practices in innovative ways. This time is not reimbursed but is looked at as a mutual investment on both the part of the practice and its clinicians. Mentoring is provided in organizational consultation, conducting workshops, group facilitation, school consultation, forensic parent counseling, and forensic evaluation. Conclusion: Overall, it should not be interpreted that this process was a relatively quick or easy one. Rather, the level of conflict within the practice was substantial. The time it took to accomplish the change was also significant. Perhaps most importantly, the success of this transformation was based on relationships. That is, the relationships among the partners, between the partners and the clinicians of the practice, and between the practice and the community at large all enhanced the ability of CPG to weather the storm and transition itself to a practice that is far less dependent on managed care. Some of the organizational development consultation and forensic referral relationships were nurtured over a period of years before they yielded success. Additionally, the focus especially on the relationships between the partners and the practice’s clinicians was crucial to avoid having a mass exodus of clinicians. Even so, such a transition is not without its risks and costs. Substantial changes can occur in the culture of the practice. Individual clinicians may be more accountable for their own referrals and financial success. Role changes from being a “doctor” in the office to at times feeling like a “salesperson” can cause difficulties with one’s professional identity. Compensation agreements may need to be modified. There may be a greater range of compensation across professionals, leading to feelings of resentment. Those who bring in relatively more revenue and earn more compensation may believe they are paying an inordinate amount of the overhead. Those who bring in relative less revenue may resent those who bring in more for the same (or fewer) hours worked. It is possible to successfully make the transition. It is important to establish goals, assess options, decisively choose an option, develop a plan for change based on the option, implement the plan, and objectively assess its effectiveness. This all needs to be done in a way that minimizes internal conflict and blame and recognizes that assuring excellence in clinical care also means running a practice in a manner that is sensitive to its needs to survive in today’s industrialized healthcare marketplace. Drs. Zimmerman and Thayer would be happy to answer any of your questions or provide additional information. Feel free to contact them at CPG Behavioral Health Resources, 40 Dale Road, Suite 201, Avon, CT 06001, (860) 676-9350 (ext. 17), cpg.jz@att.net, or at CPGBehavioralHealth.com |
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