Mastering Payor Contracting: Strategies to Maximize Performance andFinancial Success in Value-Based Care

Achieving optimal performance within payer contracts—also known as payer contracting or payer contract management—is essential for healthcare organizations to increase financial reimbursements while reducing financial risk.

Although optimizing performance in value-based healthcare contracting is a process that takes time, it can be accomplished by taking the right steps, including:

·       Gaining a deep understanding of how payor contracting works,

·       Learning the specifics of your healthcare organization’s particular payor contract,

·       Leveraging tools and best practices for success in value-based care.

What Is Payor Contracting?

Payor contracting, particularly in the context of value-based healthcare, refers to the contractual arrangements that outline how providers are reimbursed for delivering care. These contracts define and explain a provider’s reimbursement arrangement for delivering healthcare services to patients covered by a specific health plan. They cover everything from reimbursement rates and provider networks to medical necessity and provider credentialing.

Payor contracts are central to any healthcare organization, as they dictate how practices document visits, bill for services, collect patient health information (PHI), report population health metrics, and provide care for their patient base.

As the shift to VBC places more emphasis on the quality of care rather than the quantity of services performed, payor contracting is also evolving, with more contracts linking reimbursement to patient outcomes.

Understanding Your Payor Contract and Its Clauses

Healthcare professionals are often extremely busy, making it difficult to find the time to fully understand a complex and lengthy value-based payor contract. However, whether your organization is negotiating, renegotiating, or simply seeking to better understand its payor contract, educating leadership and staff on the contract's terms can pay off in the long run. When staff understand the rules, they’re more likely to perform better. Some key payor contract terms every healthcare professional should know include:

·       Unilateral Amendments: These clauses allow the payor to make changes to the contract without the provider's agreement, which can significantly impact the provider. It’s essential to be aware of such clauses, as they often favor the payor.

·       Fee Schedule and Performance Programs: The fee schedule outlines the level of reimbursement for services, while performance programs offer additional incentives for meeting certain benchmarks. Carefully reviewing these clauses can help ensure maximum reimbursement.

·       Network Requirements: These stipulations define which networks providers can operate within and are crucial for tracking and managing care to determine its value.

Maximize Reimbursement with a Payor Contract Management Plan

Researching and understanding value-based healthcare payor contracts is essential for ensuring timely and correct reimbursement, reducing the risk of denied claims, and ultimately maximizing reimbursement. Understanding the contract is just the beginning—performing well within it is crucial for the financial health of both patients and the practice.

However, many healthcare organizations shy away from payor contract optimization due to its daunting nature and the pressing nature of other priorities. Fortunately, payor contract management systems and tools are available to help busy healthcare professionals stay on top of their contract performance.

Payor contract management involves leveraging workflow policies, software programs, and other tools to ensure that the necessary steps for proper reimbursement are handled correctly, such as document storage and progress tracking.

Hire a Payor Contract Manager

Payor contract managers bring a blend of legal and healthcare expertise to both negotiate and interpret payor contract terms. They translate contract contents into actionable directives for staff, which helps healthcare establishments achieve greater reimbursement benefits over time.

While hiring a payor contract manager is ideal, it can be expensive and may not be feasible for smaller practices. In such cases, outsourcing this expertise to a leading specialist like PayrHealth can be a cost-effective alternative. PayrHealth’s team of experts offers comprehensive services in payor contracting and credentialing, ensuring your practice maximizes its financial performance.

Use Payor Contract Management Software

With healthcare being no exception to the digital revolution, software has emerged to assist with the payer contracting process. For example, healthcare dashboards can track and display key metrics in real-time, allowing practices to identify and correct trends that impact reimbursement.

Payor Contracting with PayrHealth

For healthcare providers looking to maximize their performance in payor contracts, PayrHealth offers a powerful combination of expertise and technology. With a unique blend of healthcare and IT backgrounds, PayrHealth’s consultants are well-versed in a variety of payor contract negotiation and management methods. By partnering with PayrHealth, your organization can achieve its goals, ensuring both financial sustainability and high-quality patient care.

For more information on how PayrHealth can help your organization, visit PayrHealth.com.

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