American Society of Dermatology
2721 Capital Ave.
Sacramento, CA 95816-6004
Phone: (916) 446-5054
Message: (561) 873-8335
Fax: (916) 446-0500
American Society of Dermatology, Inc.
A Voice for Private Dermatologists Since 1992


If you determine that managed care is inevitable for your practice, begin by identifying the most stable and successful HMOs with the best track record. To target potential plans and evaluate them effectively, consider the following actions:

Contact large employers in your area.

Human resource representatives of large companies in your community can tell you about their managed care contracts, the plans most attractive to their employees, key features and problems with each plan, and answer any other questions of importance to you.

Gather information on targeted managed care organization.
Most important here is learning as much as you can about the managed care organization -- identify the benefits and risks of your working with them, be clear on the freedoms you may sacrifice or gain, and clarify how stable the group really is. Meeting or speaking with the plan's medical director or primary administrator will probably answer most of your questions. The AAD's Dermatology Practice Administration: Managed Care manual contains lists of questions you may want to ask. We suggest that you select those queries most critical to your practice in the areas shown in the next table: [Section III, pages 7 to 15]2

Questions you might ask about managed care organizations.

History of the organization
  • Is it properly licensed?
  • How long has it been in operation?
  • Is it well organized?
  • Have there been or are there currently lawsuits pending against the carrier for such things as denial of services?
  • What are their marketing materials and strategies for the plan?
Financial Information
  • Has the plan been profitable? Is it properly capitalized? (These issues will reflect on the management of the plan )
Reimbursement Policies
  • Is there a withhold? If yes, how much of withhold was returned to plan physicians? How much of the withhold do specialists get?
  • What is their claim submission procedure?
  • How soon are claims paid after being submitted in a fee-for-service contract? In a capitation contract, when do you receive your monthly payment?
Referral process for dermatologists
  • What is procedure for a patient to obtain a referral authorization?
  • What are the utilization review methods used to control costs and use?
  • What are the quality assurance program and grievance procedures?
Plan member benefits and payment responsibilities
  • What copayments are required by the plan? (In a capitated plan you would want a higher copayment to discourage utilization Conversely, in a fee-for-service, you want a lower copayment so as NOT to discourage patient visits )
Participating physicians
  • Has the plan attracted the "better" physicians in your area?
  • Would you want to work with them?
  • What is the credentialing process?

Assess your credentials against those required.
At this point, make sure your credentials are in order before further pursuing a desirable plan. You may not have the facilities, equipment, or available hours required by a particular plan.

Speak with participating physicians.
This feedback can be particularly helpful, especially from other participating dermatologists. Hearing firsthand about problems or concerns with a particular plan -- its referral process, reimbursement history, and administrative tasks -- will help you tremendously in deciding whether this plan is worth pursuing. We also recommend you speak with your local hospital managed care administrator or IPA executive. These staff have invaluable experience and bargaining power. Ninety percent of the most important questions in this area will be answered for you.

Completing these fact-gathering steps is the easier, more straightforward part of this process. Assessing the impact of a particular plan on your practice style, goals, and income is more complex and means you really need to know your business.

2Italicized refrences in brackets refer to sections in the Dermatology Practice Administration: Managed Care binder provided by the AAD.