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Health Care Blog

Messenger Model Contracting - A Structure of the Past

Authored by John H. Fisher, II
Posted on May 19, 2014
Filed under Health Care

There are many organizations around the country that use a messenger model as a managed care contracting mechanism. Under the messenger model, an intermediary is used to shuttle offers from managed care organizations to individual providers who sign on to the network.

Messenger model networks should not be confused with clinically integrated systems. Clinical integration requires the network entity to perform a much more robust range of services and requires providers to make a much more serious commitment to comply with system standards. In fact, messenger model networks are inherently non-integrated and are normally used because of perceived difficulty and expense involved in the clinical integration process.

Messenger model networks are largely ineffective at achieving quality or efficiency enhancements, largely due to the very limited activity that the messenger can undertake. In order to remain compliant with antitrust laws, the messenger can do little more than convey offers from payors to network providers. A messenger cannot become involved in negotiation of fees on behalf of providers.

The limited function of the messenger creates a very real risk of violating the antitrust laws. Over time, a messenger may begin to push the envelope and cross over into performing activities that may cause a per se violation of the antitrust laws. Even if the messengers procedures are carefully established at inception, changing circumstances or lack of ongoing legal support may lead to subtle changes in activity over time. These issues tend to not arise until there is an impasse with a payor or someone is adversely impacted by the network. By that time, there could be a very long history of noncompliant messenger activity. Unfortunately, inappropriate activities by the messenger can have a negative legal impact on the individual provider members. After all, the crux of the antitrust laws is focused on agreements between competing providers (i.e., competing network physicians).

For these reasons (along with others), it is generally acknowledged that the messenger model is a structure of the past. As payment mechanisms shift away from traditional fee for service payment toward global, bundled, episodic, shared saving, and even capitated payments, the messenger model becomes even more unworkable and obsolete. For this reason, most messenger models are now exploring ways to achieve higher levels of clinical integration between providers.

Ruder Ware is actively involved in advising provider groups on the transition to clinical integration.