Medical practices’ operations are primarily fueled by payor money – it’s an elaborate ebb and flow of reimbursements and outgoing costs for services rendered (and that’s without taking into account federal government reimbursements for Medicare or Medicaid services). In order to ensure the health of your revenue cycle, managed care contracts must be properly maintained. Although managed care contracts protect payors against ineligible or untrustworthy providers, they can harm honest providers, too, requiring you to go out of your way to get the payment you’re due.
At PayrHealth, we still encounter practices with fee schedules that are five to ten years old, and usually contain expensive problems that haven’t been fixed. Providers should generally evaluate their payor contracts once a year – however, this can be a time-consuming task for many providers. That’s why we recommend partnering with a payor contracting expert. Here’s our top three reasons for reviewing your managed care contracts and how it can ensure you get the reimbursement you’re due.
Your Managed Care Contract Hasn’t Been Renewed in Years
The cost of services, technologies, and treatments is always increasing. If you want to continually increase income for your practice to keep up with rising costs, you should regularly analyze and improve payor reimbursement rates. Every time you renew your contract, you have the potential to negotiate for better rates. Payors count on providers being too busy to regularly assess their reimbursement rates against the current market, so many providers are losing out on reimbursements and continuing to operate on sub-optimal rates for services. It’s good to look at payor contracts as having a short life cycle so they can be continually improved upon. It can be difficult to negotiate and renew managed care contracts yearly, hence why we recommend seeking outside help.
You’re Measuring Payor Performance
By consistently evaluating payors (e.g., benchmarking), you can identify those that perform better. Reimbursement levels, the frequency and rate of claim denials, etc., are important variables that you should always keep an eye on. Thanks to real-time data, you can understand the value of your managed care contracts and make decisions accordingly. For instance, you can see that one payor only reimburses 70% for a service, whereas another payor reimburses 85% for the same service. This can give you a strategic plan to negotiate for higher reimbursements or make decisions about dropping a payor contract altogether to focus your efforts elsewhere.
You’re Worried About Payor Manual Overrides
Payor manuals can cause negative changes for your practice on a yearly basis – often without any input from actual providers. If the payor decides to, they can put added strain on your team and drain your resources with shorter claim submission windows, changes in escalation processes, and different appeal processes. This fine print can seriously interfere with your ability to provide quality patient care that meets clinical guidelines. By renewing managed care contracts regularly, you can ensure your contracts override contradictory terms in the payor manual.
Your Payors and Health Plans are Merging
When payors merge or acquire each other, it can cause significant confusion around your managed care programs. Suddenly, you may have multiple plans, enrollment processes, review activities, and more. If you receive news that the landscape of your payors is changing, it’s important to act soon. Renewing your managed care plans is an ideal way to iron out any wrinkles and conflicting clauses, making things easier for your team. It can also be a chance to renegotiate for more favorable terms, as well as ensure you’re providing appropriate access for patients whose coverage determinations might be affected.
Your Contracts are Overwhelming
When managed care plans stagnate, they can acquire clauses and addenda that can begin to conflict and cause confusion. They can even become bogged down with different payment models or service offerings that are no longer relevant. Your managed care plans should always include accurate information on contract terms and any technical changes should be clarified by a single, authoritative addendum so there’s no room for misinterpretation. If you find that you’re consistently confused by your contract because of unclear terms, it’s time to renegotiate.
Complete Payor Management at PayrHealth
Keeping your managed care programs fresh and relevant can be challenging when you’re focused on providing the best possible patient experience. At PayrHealth, our experts can assess your managed care contract and help you negotiate the terms that best fit your practice. We even offer expertise on federal healthcare programs and negotiating Medicare and Medicaid managed care contracts to receive higher government reimbursement. To learn more about our payor contracting services, contact us today for a free consultation.