Dan Gottry - Blog

Dan Gottry's Blog

Friday, September 01, 2006

Linkia & Parity

Since the O&P list serve is a valuable and open forum for everyone's thoughts and ideas, here is my spin of the dilimma the profession and the end users are facing, whether you label them patients or consumers..

I hope I don't alienate my good friends at Hanger,AOPA,ACA and SPS with conveying these thoughts and suggestions.

The longevity of independent providers and the patient's FUTURE choice of providers, are at stake.

Sadly, I believe ACA is advocating ,or at least opening the door, for Hanger/Linkia, in what maybe their sincere efforts, to better ensure prosthetic rehabilitation benefits, by supporting prosthetic parity laws in over 12 states. Mostly unregulated states I might add, so providers would require no educational qualifications or credentials if those laws were passed..

ACA supporters and members believe this parity legislation is mainly focused to mandate proper prosthetic benefits for amputees so they are all for it. Under that veil, however is the Hanger organization and its wholly owned subsidiaries Linkia/SPS ability to contract both prosthetic and ORTHOTIC services with insurers whom must now be forced by law to provide benefits. The O comes with the P from most underwriters and Hanger is positioned to offer the lowest cost of services.

Enter Linkia and their ability to provide "network management contracts" thru 630 + Hanger providers. They can undercut any other provider in the system since Hanger also own SPS and Hanger's cost of goods is deeply discounted.

In the recent past we have corresponded with ACA that the Barr Foundation would like to consider supporting parity in Florida and any other REGULATED state, but only with patients having the ability to choose a licensed provider.

Parity is a ACA/AOPA /Hanger driven and funded effort, many independents in Florida see supporting parity as the beginning of the end of third payer provider contracts for them since Linkia/Hanger would be able to more aggressively bid for the contracts if insurers are legislatively mandated to provide appropriate O&P benefits.

Review AOPA's publication, the O&P Almanac issue, May 2004 pp10-13, Carrie Parsons wrote Hanger forms MCO to Link Facilities and Payers for discussion that Linkia is "good for the industry"!

The result is that you may have the deck stacked against you with the largest provider network (Hanger), the national O&P trade industry(AOPA),the nations largest distributors of O&P components(SPS), AND the nations largest amputee patient non profit organization (ACA) effectively supporting Hanger/Linkia thru their parity initiatives efforts, funded with Hanger and industry $$$, to legislate state parity laws.

Ivan Sabel, Chairman & CEO, Hanger Orthopedic Group. Reported, "We also recently announced a Linkia contract with Great-West which will go into effect August 1st, and coupled with our Cigna Linkia contract, we now have two full network management contracts in place."

There maybe only two options here.

1) Amend the parity bills with the "Any Willing Provider Law". Described below.Since it has taken effect in Arkansas, insurance companies have been forced to deal with little guys. They may not send the check directly to the provider, the patient instead, but providers will get paid.

I know that it's taken effect in Kentucky where it originated,.

Perhaps providers would have any interest in pursing that course to perhaps minimize that concern ?

Thinking this bill might help independent providers to supporting parity laws, I contacted and asked ACA'S Morgan Sheets, if ACA could support "any willing provider" laws to their parity efforts.

They elected not to stating it would be sending mixed signals to legislators in proposing two bills.

http://www.benefitscounsel.com/archives/cat_any_willing_provider_laws.html

2)File a complaint to the FTC re: possible violation of monopoly laws. A monopoly is Exclusive control by one group of the means of producing or selling a commodity or service: "Monopoly frequently . arises from government support or from collusive agreements among individuals" (Milton Friedman).

http://www.answers.com/topic/monopoly-1

The adverse effects of monopolies can be much more noticeable on an individual level than in the aggregate. These effects include the destruction of businesses that would have survived had competition been based solely on quality and price (with a consequent loss of assets of the owners and jobs of the employees) and prices for products so high as to cause hardship or be unaffordable for some people.

http://www.bellevuelinux.org/monopoly.html

Contact FTC for their perspective

http://www.ftc.gov/bc/compguide/index.htm

Interview Susie Ebersbach, Director of Business Development, POINT Health Centers of America, Inc.

Ask
1) What is the impact of the Linkia model on independent providers, Linkia, patients and eventually the payers?

"In my opinion, should Hanger be successful in attaining full managerial contracts to control payer's provider networks, independents will lose tremendous market share, patients will have severely limited provider choice and quality of care will erode over time. The number of providers will be decreased, thereby allowing the major providers remaining to begin to demand better pricing for at least a portion of their services." said Ebersbach. "When Hanger predicts that $50M in additional revenues is possible thru its Linkia division, and yet reimbursements are dropping, then these revenues represent a shift in market share (away from the independent) and NOT growth in the total market."

Asked why Independents would cooperate by participating in a model that will erode their market share, Ebersbach responded, "I have never understood this myself, so its probably more appropriate to ask the providers who choose to do this. I will say it is an inconsistent business philosophy to offer your dollars either via purchasing supplies or providing patient services through a competitor entity, if you see the entity as a competitive threat. Clearly, the growth of SPS purchases by independent facilities each quarter demonstrates those independents are supporting Hanger, and infers they do not perceive a threat. Over the years, reasons Independents have expressed to me for engaging in these inconsistent practices revolve around the belief that Hanger will never be able to provide services of the quality they are providing at their independent facility, and the belief that this will continue to translate into retained market share for the independent practice. I see Linkia as a vehicle to thwart this logic by monopolizing market share, if the MCO payers allow it."

Interview a displaced patient (contact Roger Lehneis 516-621-7277. He has one who is concerned)

From all what appear cloudy issues maybe a silver lining. Perhaps this could be a wake up call for patients AND independent providers not remain passive and get involved with securing, proper O&P benefits, and what very well can turn out to be the longevity of their profession and livelihood..

Have an nice weekend....

Anthony T. Barr

posted by Daniel Gottry at 9:56 AM