How to get into closed networks The secrets to success

1. How to get into closed networks The secrets to success Panel: Mr. Steve Selbst CEO and Co-Owner, Healthcents, Inc. And Mr. Paul Macy Owner, Macy O&P, LLC April, 2019

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3. Mr. Paul Macy, MS, CPO • Sole proprietor and owner of Macy O&P, LLC • In addition to his clinical Orthotic and Prosthetic degrees, Paul also holds a masters degree in Mechanical Engineering. • He also has a unique and persistent interest in researching, comprehending, and applying the latest technology to his work in creating personalized orthotic and prosthetic devices. • Mr. Steve Selbst, CEO (Leads Operations) • Manages Healthcents Operations including contract negotiations • Successfully negotiated 15,000+ payer contracts • Invented RevolutionSoftware™ and designed the product • Designed and delivered “Blueprint for Success Payer Contracting Class” • 30 years as a Software and Business Executive in the Software Business at IBM • BS Degree in Business Admin, Arizona State University, Summa Cum Laude, and invited to apply for a Fulbright Scholarship Introducing…

4. Agenda • Learn strategies and tactics to get contracted with commercial payers who have closed or narrow networks • Building effective value propositions • Over come obstacles • Steps to getting contracted- Good “payer contracting hygiene”

5. What is a closed or narrow network? • Closed- Payer has established a practice (usually not a policy) that it is not accepting more providers into a specific network type- e.g., DME / HME, since its network is full • Narrow- Payer has established a practice (usually not a policy) that it is generally not accepting more providers into a specific network type- e.g., DME / HME, since its network currently has the optimal number of providers it needs

6. Strategies for Closed and Narrow Networks • First: Focus on a combination of pricing and value • Third Party Payers and Complementary Networks • “Any Willing Provider” • LOAs

7. Tactics to get into narrow and closed networks • First, there are no silver bullets • Complete a SWOT Analysis with a focus on competitive differentiators • Product related • Service related • Treatment / savings related • Geographies Covered • Or all of the above • Often price competitiveness coupled with value is key, can revisit after initial contracts term

8. SWOT Analysis

9. Product Advantages • Do you have product(s) in your portfolio which are unique and will save the payer money and provide treatment benefits? • Product that eliminates in patient stay days and surgeries • Product that reduces testing that eliminates biopsies • An HME wearable device that reduces ulcers and saves limbs • A remote monitor that enables patient’s awaiting organ transplants to go outpatient

10. Service Advantages • Who are the key stakeholders in your referral network? • Do you cover geographies that your competition doesn’t? • Do you serve rural and underserved communities? • Do you provide 24x7 service? • Is your order response time much faster than competition? • Do you have specialists or therapists that do custom fits and provide custom one on one customer service? Are they in all key locations?

11. Treatment Advantages • Does your product eliminate inpatient stay days at a hospital? • Does your product reduce the need for invasive surgeries? • Does your product enable alternative treatment to invasive surgeries? • Does your product improve patient health in a way that reduces payers’ costs?

12. Improved delivery method that increases access and improves quality of care Improved technology that creates efficiency and lowers cost • If deployed, it has the potential to change the way that medical care is delivered, resulting in higher quality of care / better clinical outcomes with verifiable evidence. • If deployed it has the potential to prevent currently unpreventable downstream cost with quantifiable savings. What is "Value" to a Payer?

13. Now let’s look at an example that focuses on service efficiency, as a template, that you can use and modify based on your specific value proposition! This example assumes that the provider has submitted a request for participation but was told the network is closed.

14. Opening: Acknowledge the closed network and quickly state your value proposition- send to the payer contracts’ manager (not provider relations): Good afternoon Mr. or Ms. Payer Contracts’ Manager, Mr. Doe responded to an initial request for our HME company to participate in your HME network and indicated that your HME network is closed. I am certain that there is a cost effective value proposition here for your organization that will bring your beneficiaries much higher quality HME offerings at lower cost and with better service.Please consider this proposal for in network participation and I will have my assistant follow up to arrange a call . There are some very important facts I would like to call to your attention to that sets HME company apart from other companies. HME company is a worthy candidate for network participation status because, with their operational efficiencies, they will compete on price and they are dedicated to patient adherence, and offer the broadest possible offering of the newest technologies and products. HME company will provide high quality products for home use and save you substantial expense through its efficient model of delivery.  They will do so in three specific areas:  •       - Ability to compete on price •       - Patient Compliance that far exceeds industry standards • - Service Advantage

15. The Body, elaborate the value proposition: • Price Competitive:Company will beat the pricing of your current HME providers.Company has spent years in the HME space refining the organization by setting up dedicated resources for insurance verification. By separating these units and following best practices, company is able to onboard patients faster and more efficiently allowing patients to get the care that they deserve with as little delay as possible.  At the core of these efficiencies is the ability to compete on price.  • Patient Compliance:Patient compliance is the core methodology behind the company’s model. While most companies are focused on selling HME devices and hoping the patient tolerates therapy and never burdens their customer service department, our company takes a much different proactive approach. By working with patients one on one in their homes and custom fitting our equipment we insure compliance and have statistics that show we are 25% more compliant than our competition. Better compliance = better treatment. Non-compliance = an untreated condition that could result in complications and higher cost of care. • Service Advantage:We have a nationwide network of therapists who custom fit our devices and work with customers “door to door”. To reinforce our compliance commitment, our therapists not only custom fit the devices at the patient’s home but they are on call to answer patients’ questions.

16. The Close, make sure to put a date “hook” and to follow up: I look forward to discussing HME company’s participation in the payer network with you and the items listed above that set us apart.  I am sure that after you review the information in this letter that you will agree that adding our company to your network is the right thing for your beneficiaries.  I look forward to receiving a positive reply by 12/1/19. Please let me know if there are others that you would like to invite to the conference call and if you have any further questions.

17. Overcoming Obstacles • Escalation- must be timed just right • Recast the value proposition • Broaden the aperture- more than one type of contract • Direct agreements, ACOs, ASOs, self insured • Complementary Payers • Any Willing Provider • Letters of Agreement- case rates • GPOs

18. PREPARE: • Best Practice 1: • Evaluate top codes and figure out which ones are driving revenue • Best Practice 2: • Benchmark against Medicare and other payers with which you have contracts to identify areas where you may be under reimbursed compared to the market. Use the “20/80” rule. • Best Practice 3: • SWOT Analysis for your payer fee schedules: Look for opportunities to increase reimbursement for services that are not reimbursed at market competitive rates, and assess your chargemaster. • Best Practice 4: • SWOT Analysis for your practice • Best Practice 5: • Prepare an impactful proposal letter Best Practices for Payer Contracting

19. NEGOTIATE: • Best Practice 6: • Deliver your proposal letter to the appropriate network manager, do initial follow up and establish rapport • Best Practice 7: • Follow up frequently and keep the payer representative engaged. Respond quickly to any requests they make for additional information and to any proposals you receive from the payer • Best Practice 8: • Evaluate payer proposals and look for ways to optimize counter offers. Don’t take first “No” as an answer, and use escalation to Sr. Management judiciously • Best Practice 9: • Review contract for language that affects reimbursement MONITOR (The often forgotten step!): • Best Practice 10: • Monitor payments, identify reimbursement issues quickly and work closely with your payer representatives to resolve any payment issues as quickly as possible Best Practices for Payer Contracting

20. Summary Define your competitive advantage Identify your payer contact Leverage: Your existing relationships and referral networks Be persistent!

21. Questions? Contact the speakers at: selbst@healthcents.com or 831-455-2174 or www.healthcents.com Or paul@macyop.com or 860-333-5558 or www.macyop.com • Our full Healthcents’ suite of services include: • Payer contracting analysis and negotiations • Including letters of agreement, claims trouble shooting, and claims payment verification • Online Marketing Outreach • RevolutionSoftware™, our unique cloud-based contracting software • Education and training in payer contracting • Consulting packages customized for your needs • Led by a team with decades of healthcare and technology expertise, • Healthcents is the go-to authority for organizations such as the Medtrade, The American Urological Association and Quill Healthcare (a division of Staples) • We have presented at many Medtrade sessions • More information at www.healthcents.com