Insurance carriers are under significant pressure to cut costs while continuing to support the recent pandemic-related surge in Medicaid enrollment. These expectations may make insurance companies question whether it makes sense to own or rent their provider network.
While this can be a difficult decision to make, especially for carriers who have stringent deadlines and minimal staffing for such large tasks, there are certain drawbacks associated with renting a provider network. Many organizations that offer rentable provider networks claim to supply insurance companies with “instant” connections. This may seem like the suitable choice for your needs; however, there is a sizable amount of behind-the-scenes work involved in putting together even a small network. For this reason, the owning and renting timetables may end up being similar. This is far from ideal, considering rented provider networks cost insurance companies significantly more and they don’t even own their network when all is said and done.
Insurance providers must be sure that the urgency associated with finding a network does not overshadow their ability to settle on a reasonable decision. Renting a provider network long-term is by no means a cost-effective choice for insurance carriers. Most organizations that enter into rental agreements may do so because they simply do not have the staff or resources to effectively build and maintain their provider network.
Carriers that choose to invest a significant amount more on provider network rentals are likely to experience narrower budget margins. No company should be faced with that financial insecurity, which places them at risk of entering the red as a result of any disruption, minor or major.
There are four significant concerns that could pose a threat to an insurance provider’s budget at any time. One such concern is their ability to provide service, which is a direct result of the resources at their disposal. Proper claims adjudication (including par and non-par status, 3rd party contract configuration, etc.) is another somewhat unpredictable factor that can vary in both frequency and dollar amount. Resulting appeals and grievances can place a financial burden on an insurance company due to the need for additional internal resources for review processes and potentially substantial payouts. Regulatory concerns can also strain any insurance provider’s budget, as noncompliance can result in large fines.
At TOG Network Solutions, we not only offer insurance companies the advantage of owning their provider network, but we also supply organizations with expert contracting and negotiating services. Don’t forget about TOG’s precise and expansive Provider Data Management platform. This industry-leading package will take your business to the next level.