Maximize Your Reimbursements and Stay on Top of Payor Compliance: A Helpful Guide for Healthcare Practices

Are you a busy healthcare provider feeling like you’re running on a treadmill—working long hours, seeing as many patients as possible, but still noticing a decline in your revenue and performance goals? Your billing system seems fine; bills are going out, and payments are coming in from services provided. Yet, something just doesn’t add up.

If this sounds familiar, it might be time to take a closer look at your revenue cycle management and, more specifically, at your payor contracts for healthcare services or Medicare or Medicaid services. It's crucial to start tracking your healthcare reimbursement closely to see if you’re getting paid correctly. Although it may seem like extra work, a small payor compliance project can pay dividends when you start locating areas of lost revenue. At PayrHealth, we’ve encountered numerous situations where payors weren’t sticking to the agreed-upon terms, leading to significant underpayments. Some cases have even uncovered underpayments amounting to $75,000 to $100,000 in just a year!

Here are some of our top tips and best industry practices for payor compliance to ensure your health insurance company is staying true to their contracts and reimbursing you appropriately for healthcare costs.

Step 1: Create a Payor Matrix

Let’s start with the basics—getting organized. If you’re dealing with multiple payors, each with different payment schedules and contract terms, it can be overwhelming. You don’t have time to dig through every contract each time a payment comes in. That’s where a payor matrix can save the day!

A payor matrix is essentially a handy chart listing each payor you work with, the initial date, the top 20 or so procedures you perform, and the contracted rates for each. Don’t forget to include contact details and key contract terms like renegotiation dates. Having this information at your fingertips can make all the difference in ensuring you’re not operating under outdated terms. Be sure to upload these contracts into your practice management system for easier tracking and compliance.

Step 2: Compare Payments to Contract Terms

While many practice management systems come with tools to help track reimbursements, they often fall short in giving you the full picture. At PayrHealth, we use a combination of third-party software and, sometimes, a straightforward spreadsheet to ensure every payment you receive for a medical service is compared against your contracted rates and statutory and regulatory requirements. This way, no underpayment goes unnoticed.

Understanding how to generate underpayment reports is key here. Even if you don’t have fancy software or a payor compliance project, a little elbow grease can go a long way in manually checking payments against contract terms.

Step 3: Don’t Ignore “Small” Underpayments

It might seem easy to let minor underpayments slide—after all, what’s $50 or $100, right? But over time, those “small” amounts add up to thousands of dollars in lost revenue for healthcare providers. Remember, this isn’t just a minor inconvenience; it’s profit being lost! And in the healthcare industry where every dollar and initial payment counts, recovering these underpayments can be a real game-changer for your bottom line and pay compensation.

Step 4: Dive Deep, Identify Issues, and Act!

If you spot an underpayment, it’s time to act! Here’s a breakdown of what you can do:

If the Health Insurer Isn’t Complying with Contract Terms: Reach out and ask them to correct the issue. And don’t just ask—send a formal demand letter requiring payment according to the agreed terms.

Double-Check Your Billing Codes and Modifiers: Sometimes, it’s a simple mistake on your end with medical codes. Make sure you’re using the right ones to avoid unnecessary underpayments.

Keep an Eye on Renegotiation and Termination Dates: Knowing these dates ensures you aren’t operating on expired terms - and that you're working on a time period consistent with the payor's.

Watch for Payor System Updates: Payors sometimes update their systems, and mistakes happen—like loading the wrong fee schedule. Thankfully, at PayrHealth, we’re always monitoring these changes so we can catch errors early and recover any missed payments.

Step 5: Think About Outsourcing Your Billing

If managing all this sounds like a full-time job (because it is!), you might want to consider outsourcing your claims administration process and payor contract management. Professional services can help keep track of everything from payer contracts to reimbursements, so you don’t have to worry about it. It's a good way to ensure your employer gains knowledge about how to reduce costs and thrive in the healthcare industry.

Payor Contracting with PayrHealth

At PayrHealth, our team is dedicated to maximizing collections for healthcare providers. We’re here to help boost your monthly cash flow by optimizing every step of your revenue cycle.

So, why not let us help you navigate the complexities of payor compliance and reimbursement tracking? With our expertise, you can focus on what you do best—providing exceptional care to your patients. Visit PayrHealth.com to learn more about how we can support your practice!

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