It’s all About Successful Payer Contract Negotiations

The majority of practices delegate payer contract negotiations to their office manager or medical director. Even business-savvy doctors who have worked with a variety of payers for years might not be aware of their practice’s greater bargaining power than they previously believed.Keep in mind that insurers have the following obligations in that order: (1) Investors 2) clients 3) hired vendors, which includes you. Continue reading if you want to receive lower rates, fewer denials, and greater contractual reimbursements:

What to know before speaking with a payer’s representative

• Prior to comparing insurance reimbursement from all insurers, analyze your top CPT codes to see which payers may be the source of any reimbursement issues. The location of the inequities can be determined by gathering and reviewing data for a utilization report.Enter the frequency of a commonly used CPT code, the number of times it was billed to a certain payer, and multiply by the current payment amounts in a spreadsheet.

By multiplying the overall frequency of all codes covered by the payer for the weighted average expenses by your overhead costs and physician reimbursement, you may calculate your break-even threshold. The weighted average pay data can be compared to that. Now that you know which connections will need more attention and which businesses are costing you the most money, you should be able to make smarter decisions.

• Now that you have reliable data to support your arguments in negotiations, you need to create an ideal and an idealized target objective as well as the range between the two. The absolute prerequisite that must be fulfilled is the minimum.The objective is where you want to be at the conclusion of negotiations, and the optimum represents the best terms. You will be in a better position to negotiate and reject any unfavorable payer bids after you have all of this information.

• Contracts containing “evergreen” clauses, such as those that commonly renew automatically for a further year, should be avoided unless a notice of termination is made within a certain amount of time prior to the end of the term.Make sure to include a “out” term in the contract, such as one of 90 days, if this is a new payer or one with whom you may have had prior issues. You won’t experience financial loss as a result of being trapped in a poor contract if the existing wording doesn’t provide adequate opportunity for flexibility.

• Some payers often reject claims retroactively, even ones that are several years old, and then demand reimbursements.

Value-based contracts and fee-for-service agreements in payer contracts

Without discussing the role that value-based services are starting to play in reimbursements and renewals, no discussion of payer contract negotiations would be complete.The transition from fee-for-service (FFS) to value-based care is being largely influenced by MACRA laws, which also apply to coding and invoicing.

Value-based elements can be gradually included into the typical FFS contract to ease the transition; however, as this will become the “new normal,” it is preferable to do this as soon as possible. Make sure that these coding and reimbursement changes are reflected in the contract. Medicare codes like chronic-care management (CCM) and transition care management (TCM) no longer need face-to-face appointments for treatment received outside of the office, but they still generate money.

Additional six hints for establishing payer agreements

• Review all existing and potential contracts with the assistance of an attorney with experience in healthcare credentialing services. You need to be aware of the contract’s conditions, reimbursement percentages, and expiration dates.

• The laws of your state may govern how you do business, regardless of who is responsible for paying what in reimbursement.The services that may be covered, the filing deadlines, the amount of reimbursement, and other elements may be impacted by state legislation. The connections between state, federal, and other rules as well as how they affect your practice will be explained by your lawyer.

• Before meeting with payers, conduct a “SWOT” examination of the practice. You should have information about the advantages, disadvantages, opportunities, and any risks to your profession. A practice’s strength, for instance, can be its capacity to spot and fix revenue cycle breaches without sacrificing patient care quality
  
  The requirement to analyze the charge schedule, which is often a proportion of Medicare’s fees, may be a drawback.Increased reimbursement rates might payer contract negotiations result from a thorough study of your practice’s costs, spending, forecasts, and cost management.

• Review contracts well in advance of the renewal dates so you have time to inform the business of any modifications or cancellations.For instance, the Medical Group Management Association (MGMA) advises asking for a smaller yearly rate increase of 2 to 3 percent rather than a bigger one of 10 percent all at once.

Want to renegotiate with the contracts? Want to get an absolute SWOT analysis of your medical practice? Then connect with the contract negotiation services services.