Payor Contracting

Benefits of Managed Care Consultants For Healthcare Providers

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In the world of managed care, there is an endless stream of concerns impeding healthcare providers’ ability to meet their patients’ needs. Dedicated consulting provides a one-size-fits-all solution to most if not all of these problems. But how?

Let Healthcents break down all you need to know about how managed care consultants can help your business, including:

  • What exactly the field of managed care consultancy comprises and what consultants do
  • The three biggest benefits of using a managed care consultancy solution
  • One final consideration: the importance of objectivity and the big-picture perspective

What is Managed Care Consulting? What do Care Consultants Do?

Before we dive into the benefits, it’s important to first have a general understanding of the role managed care consultants play. Typically, healthcare consultants operate as a third-party adviser to a managed care organization. What is a managed care organization? The list includes:

  • Physician, hospital, accountable care, and group purchasing organizations
  • Integrated delivery systems and independent physician or practice associations
  • Physician practice management companies and orbiting networks of third parties

Managed care consultants offer an external view on how to manage strategic challenges for these institutions. Per one Deloitte survey from 20161, a majority of participating institutions found working with managed care consultants added significant value to “strategic assessment, business case development, RFP / vendor selection, and negotiation and contracting.”

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Top Challenges Facing Providers in the Managed Care Environment

Even in the best of times, managed care involves a slew of challenges for all stakeholders within the field. With the onset of the COVID-19 pandemic, all challenges have been exacerbated due to social distancing and other public health mandates.

In this context, three of the biggest issues facing managed care institutions, especially those involving Medicaid2, break down as follows:

  • Balancing the accuracy of payments and claims against relationships with payers
  • Ensuring capitation payments fall within the proper rates, per state requirements
  • Mitigating and minimizing the damage done by cuts to funding and opportunities

To address these challenges, the composition of a managed care consultancy includes experts from various fields, including: legal and regulatory experts, data analysts, and specialists in both general healthcare and contract management metrics.

Top 3 Key Benefits Managed HealthCare Consultants Provide

Despite these challenges described above, there are also positive indicators for the future of managed care, even amidst the COVID-19 pandemic.

For example, recent studies3 suggest that gross margins and medical loss ratios (MLRs) measured throughout the pandemic indicate an increase in payers’ profitability despite many other industries’ struggles. This bodes well for all healthcare providers, and particularly managed care providers—if they play their cards right.

Managed care consultants can support companies of all sizes as they navigate the ever-changing healthcare landscape. But the most impactful ways they do this are threefold: helping managed care providers sign better contracts, negotiate higher rates, and expand their teams effectively.

Managed Care Consultancy Benefit #1: Signing Better Contracts

The first key benefit of a managed care consultant is help signing better contracts. But what is a managed care contract? It’s an agreement between any managed care organization (MCO) and a personalized healthcare professional which defines the relationship from a financial and care perspective.

Payer contracting is the lifeblood of the industry, but many providers run into the problem of closed networks. Healthcare providers too often approach a payer only to be told that “they have a preferred partner,” “the network isn’t open,” or “come back six months from now.” A managed care consultant is the key to navigating these and other common relationship issues.

However, it’s not just landing more contracts; more isn’t always better. Instead, consultants will track down the right contracts, which align with your strategy, service offering, and service area.

Managed Care Consultancy Benefit #2: Negotiating Higher Rates

Contract negotiation is another integral way that healthcare providers can maximize their revenue. Contracting with commercial or governmental payers, the process is often lengthy, complicated, and time-consuming. Fee schedules, reimbursement, requirements, and payer conditions can all complicate matters.

Optimization will require concerted efforts toward:

  • Asking the right questions about the terms of the contract, which of its elements key stakeholders value most, and which they are most willing to compromise with you on
  • Conducting strategic review of all stakeholders’ strengths, weaknesses, opportunities, and threats (SWOT analysis) as part of your mutually beneficial negotiation strategy
  • Setting contract baselines, which may differ for internal audiences and external ones, fully defining the beginning point from which to start your negotiation for best results

A quality managed care contractor can simplify all these matters so that all you have to worry about is signing the contracts and watching your performance (and profits) soar.

Managed Care Consultancy Benefit #3: Expanding Your Team

Too often, managed care providers are forced to manage their contracts without adequate resources, such as time or expertise. Per one PayrHealth survey, more than 55% of provider organizations lack the proper resources necessary to adequately handle payer contracting.

An advisory team can support your organization at any stage, whether initial contracting or full integration of new teams into the organization. Part-time staffing is beneficial for two reasons:

  • Costs of full-time teams – Locating qualified candidates is time consuming and costly, and then there are the long-term expenses of training, salary, benefits, bonuses, etc.
  • Benefits of specialization – When employees are tasked with responsibilities they aren’t qualified for, resources get wasted; flexibility maximizes your workers’ natural aptitude

Plus, managed care consultants don’t just help with flexible staffing. Whether you need a stop gap or a permanent bridge, consultants will find solutions to perfectly fit your staffing needs.

Managed Care Consulting: An Objective, Big Picture Perspective

When leaders and workers are both caught up in the day-to-day company operations, it’s easy to lose perspective. Managed care consultants offer an unbiased, external vantage point. Their judgment is less likely to be clouded by petty office politics, personal goals, or general myopia.

Managed care consultants provide advice without fear of backlash or standing, an empowering freedom. Their fresh eyes allow them to see things that others can’t. Per Dr. Lawrence Kindo:4

“…they can see how everything is done while implementing changes to improve it. Sometimes, it can be changes to the most trivial or mundane activities that can bring about dramatic improvements. Since we all know money talks, the importance of increasing the business side of things cannot be underestimated.”

The value of having someone working with your organization who isn’t beholden to its rules and orthodoxies can’t be overstated. In simple terms, it’ll save you a fortune over the long haul.

Reputation and Track Record: Your Keys to Success in Managed Care

So much healthcare industry contracting lives or dies because of relationships—or the critical lack thereof. The best managed care consultants (like PayrHealth) have a long and hard fought track record of success within the industry. We’ve established strong relationships with payers and other industry experts, which we can and do leverage to help you achieve all your aims.

Particularly when it comes to contract negotiation, having pre-established relationships offers significant advantages. When both sides are able to see eye-to-eye—albeit being in opposition to one another—it’s much easier to reach a compromise. It prevents hostility and ensures that cooler heads will prevail. But building relationships takes time and concerted effort. A managed care consultant lets you skip those steps, immediately reaping the benefits without the legwork.

Managed Care Consultation Solutions for Healthcare Providers

To return to the question from above: what are managed care consultants, and what benefits can they provide for managed care organizations?

The best consultants offer seamless solutions to all manner of managed care problems, whether stemming from contemporary global health crises or the ins and outs of normal business operation. The biggest benefits provided involve signing better contracts, negotiating higher rates, and expanding your team efficiently.

To see just how effective a managed care consulting solution can be for you, contact PayrHealth today.


  1. Deloitte. Deloitte’s 2016 Global Outsourcing Survey.
  2. ClarisHealth. Top 3 Issues Faced by Medicaid Managed Care Organizations.
  3. HealthPayer Intelligence. Gross Margins, MLRs May Confirm Payer Profitability in 2020.
  4. Medical Island. The Importance of Healthcare Consulting.
  5. AJMC. Experts Outline Medicaid Challenges, Potential Reforms.
  6. RevCycle Intelligence. Maximizing Provider Revenue with payor Contract Management.

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