Not a Narrow Network – A Smart Network

What we learned in Medicare + Choice is still true today, we don’t need narrow provider networks; we need aligned provider networks, aka Smart Networks. We have also learned that narrow networks often cause ill-will with your health systems and uncontrolled leakage. A Smart Network builds a mini-healthcare community similar to an ACO in your healthcare delivery ecosystem. A Smart Network can focus on a health system and it’s provider feeder system or it can better engage your Primary Care Physicians (PCP) and “rendering” PCP. Smart Networks typically are invisible to members; however some payers may differentiate copay to encourage Smart Network utilization.

What is a Smart Network?
It is provider community aware, educated, and contractually aligned with the health plan or payers objectives around member health status, medical cost, care delivery, and health outcomes.

What is needed to develop a successful Smart Network?

  1. DataWarehouse: Success is built on capturing and compiling claims, lab, pharmacy, provider, eligibility, benefit, risk adjustment, and premium files on a very timely basis. This datamart needs to issue reports clearly displaying the successful areas of performance excellence and areas for alert and in need redesign. This is the health plans early warning system and strategy monitoring instrument.
  2. Multidisciplinary teams: The payer needs to know and monitor the data, drivers, goals and objectives; plus the provider partner need a team to absorb, implement, and impact the drivers and objectives.
  3. Slow and Steady Deployment: Not everyone can be globally capitated; make certain your team have expertise in gain-sharing for cost reduction programs, bundling payment programs, episode of care models, and mixed payment innovation models so this new structure is a win-win. The reimbursement methodologies may need to include assurance around participation in data capture exercises, code specificity, closing gaps in care, and other outcome, STARS, or risk adjustment initiatives the payer may deploy. Design your methodology; forecast its impact, and internal redesign the workflows touched on both sides — payer and provider.
  4. Network Management Touch: Make certain you are paying claims timely and accurately today. Health system or providers don’t like to partner with those with “high administrative burden.” Thus, consider having the following Network Management structure: 1) telephonic claims & process efficiency liaisons 2) contract negotiations and 3) educator, communication, and report review liaisons.
  5. Joint clear objectives for the SmartNetwork: whether it is a health system, cardiology practice, oncology association, a group of dialysis centers, nephrologist, endocrinologists or an ancillary provider makes certain the teams, objectives, and monitoring reports clearly understand, agree on and represent the short term and long terms goals.
  6. Early & Continued Dialogue: The initial dialogue will highlight if a provider may be a good SmartNetwork partner and the commitment of monthly or quarterly joint operation committee meetings will cement it. The original initiative may have a flaw in the development or implementation so this joint committee will need to review the impact and augment as needed.

Two closing thoughts:

  1. Remember bonus payments to providers are considered part of the medical cost in your MLR calculation.
  2. These Smart Network initiatives often need external support with design expertise, implementation experience, credible reporting design & product, and often a bit of mediation.

GHG is always eager to support the exploration and development of SmartNetworks. We have team members who have worked within PHOs, ACOs, IPAs, large health plans, and specialty medical providers; we are here to help if you need it.



Gorman Health Group’s Senior Vice President of Public Policy,Jean LeMasurier discusses the recent CMS Medical Loss Ratio (MLR) regulation and its provisions.

GHG is helping many experienced plans by developing smart networks: accountable care, shadow capitation, and payment bundling within their current service areas and networks. Visit our website to see how we can help you too.

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