But, despite this harsh warning, there may be reasons to find current withhold arrangements at least potentially attractive. Specifically, the AMA suggested that the use of withholds could be a “readily available” risk arrangement that demonstrates to health plans, employers and other health care purchasers that physicians are committed to providing high-quality, cost-effective care.
The other is that the U.S. Department of Justice and the Federal Trade Commission have given favorable antitrust reviews to physician networks where at least 15 percent of fee-for-service payments are withheld and put into risk pools.
AMA guidance highlights key considerations that must be spelled out in withhold risk arrangements, including:
- The specific items and services that will be subject to the arrangement.
- The utilization budgets and quality benchmarks that will be used to measure your performance.
- The expected utilization.
- The reliability of the risk-adjustment methodology establishing utilization budgets and quality benchmarks, and the reliability to evaluate performance related to budgets and benchmarks.
- The ability to track your own utilization and quality performance in order to compare with health plan data.
- Verification of enrollee eligibility.
The guidance noted that Medicare Advantage regulations and laws in California and other states prohibit direct or indirect payments that serve as inducements to deny care.
“Given the likelihood that withhold mechanisms may play a significant role in future contracts offered to you, developing the capacity to evaluate and negotiate withhold arrangements will be worth your time and effort,” the resource stated.
Get these vital details
Here is the information physicians must insist on getting before proceeding with a withhold arrangement.
The precise amount of the withhold. Health plans will likely try to get by describing the withhold in terms of a percentage, the AMA advises. “If the health plan gives you a percentage, insist that the health plan also provides you with information sufficient to identify the specific payment amounts to which the percentage withhold will apply—otherwise you will not be able to precisely determine withheld amounts,” the guidance stated.
Risk pool allocation. Insist that the health plan provide sufficient information to enable understanding and independent verification of how you were allocated surpluses or deficits.
Payment timing. Be certain that contracts indicate when withheld amounts will be remitted. A health plan may only want to make annual disbursements, but quarterly payments help practices avoid cash-flow problems.
Risk pool use. It is vital for physicians to understand what services will be paid for by the risk pool. Some health plans may ask physicians to accept risk for utilization of hospital services, laboratory services or durable medical equipment.
Risk pool account. Physicians should determine what type of account will hold the risk pool. If an interest-earning account is used, physicians should insist that interest accrues to them.
Insufficient funds. Physicians need to know the extent of their liability for risk pool deficits. Some states regulate the limit of any loss physicians would be obligated to assume.
Who’s filling the pool? Physicians should know who else is participating and how much they are contributing as this could influence management of the pool and surplus or deficit allocation.
Carry over. It’s recommended that physicians resist any attempt to carry over deficits or surpluses from one contract term to another. The possibility of deficits being carried over “may significantly compromise your ability to assess your risk accurately,” according to the guidance.
Risk pool pools? Physicians must know if a health plan can use a surplus in one risk pool to offset the deficit in another. If they can, the AMA resources states that “it may reduce the likelihood you will receive any withhold monies.”