3 Ways to Cut Costs as an Independent Provider
As a healthcare provider, your primary responsibility is to your patient outcomes, but at the end of the day, you still have a business to run. Profitability doesn’t outweigh patient health and satisfaction, but it does have to be part of the equation.
You need cost reduction techniques that won’t interfere with quality care. That’s where PayrHealth comes in. Our team helps you sign better contracts and negotiate higher rates to cut costs.
This means focusing largely on administrative and contractual ways to cut healthcare costs, rather than procedural or diagnostic. As an independent provider, likely with smaller infrastructure and less sophisticated systems in place, this is probably where you’re losing money.
Let’s put an end to that with these three money-saving methods.
#1 Negotiate More Lucrative Contracts
Payor contracting is one of the most laborious, confusing aspects of healthcare management—incidentally, it’s also the area with the most possibility for change.
Like any contract negotiation, you have the opportunity to secure favorable terms. For this to happen, you need an in-depth understanding of contractual jargon, a clear strategy for negotiations, and a contract management system to analyze data and identify trends—or a professional company like PayrHealth to take care of this all for you.
There are several ways to secure better contracts with higher rates.
Prepare for Negotiations
It may seem like payors have the upper hand in your relationship, but as the health care provider, you wield a certain amount of power, too. The key to effective negotiations is maintaining full awareness of exactly where your power lies and using it to your advantage.
Here’s how you can do that:1
- Analyze fee schedules and payment processes to pinpoint low rates – Through comprehensive data analysis, you can point out the sub-standard reimbursement rates you receive from certain payors for specific services. This is a perfect starting point for renegotiations as a healthcare organization.
- Identify the gap between expected and actual claim reimbursements – If there’s a large disparity between anticipated and actual reimbursement revenue, you know you need to unpack the contractual language to uncover why. In doing so, you’ll also identify what needs to change—bring this concrete finding and solution to the negotiation table.
- Know where you can afford to compromise and where you can’t – Before you begin negotiations, you should meet with financial and medical leaders within your organization to identify clear objectives, as well as non-negotiable terms versus areas of give-and-take.
- Come prepared with data-based evidence – By understanding the healthcare industry and your general patient populations, the medical care they most often need, and the average revenue generated from your main patient groups, you can provide evidence as to why these new terms will be financially beneficial to both you and the payor you’re negotiating with.
Implement a Central Contract Management System
An effective management system can help both during and after negotiations in the health care system. You’ll have centralized and comparable data to use as evidence, and you’ll to stay organized when dealing with different medical bills or contracts from different payors.
As an independent provider, it’s essential to utilize programs that enhance your efficiency—small practices can benefit most from system automation.
Your contract management system should be equipped with the following:
- All available contracts – This way, all staff can review the specific terms and conditions of each individual contract.
- A notification system – Contract owners should be notified when there are updates, upcoming deadlines, and important provisions to ensure nothing falls through the cracks.
- Data analysis – By collecting data about underpayments, outliers, and claim denial trends, you can solve problems internally or use this information in contract renegotiations.
You can also use this easy-to-access data to develop a standard payor contract that you bring to the table at the start of all negotiations.
Rely on a Contract Management Company
If contract management isn’t your specialty, you may waste more time and money than it’s worth trying to understand the contractual lingo, analyze the data, and develop negotiation strategies—only to fall short of your goals because you lacked preparation and expertise.
As an independent provider or small practice, you likely don’t have the large-scale administrative infrastructure to handle negotiations and implement new management systems.
An outsourced negotiation team like PayrHealth can do all this and more, plus they’re able to look at your practice with a fresh perspective to identify your unique service offerings and value propositions. Just like hiring a lawyer in a divorce case, it’s always best to have an objective expert who can analyze the facts and present them in a convincing, cohesive argument.
#2 Secure Up-to-Date, Efficient Provider Credentialing
Credentialing is yet another expensive, time-consuming process because of how confusing it is for non-experts.
Suppose your independent practice doesn’t have years of administrative experience with this specific task. In this case, you’ll not only waste time figuring out every tiny aspect but also risk rejection from lucrative health insurance networks and organizations that require credentialing. You also run the risk of loing patients who want to remain with in-network providers in their insurance plan.
To receive approval the first time around (and spend less in the process), avoid these common mistakes that result in denials:2
- Discrepancies between information in the application and credentialing requirements
- Failure to disclose or intentional cover-up of previous adverse events such as sanctions
- History of medical malpractice
- Practicing before completing the credentialing process in full
The best and easiest way to curb these instances of rejected applications is by using an automated system and professional provider credentialing service.
#3 Invest in Revenue Cycle Optimization
No physician wants to cut corners and eliminate valuable practices just to boost their bottom line. But every day, revenue is leaking out of your practice unnecessarily. By focusing your energy on those weak spots, you can cut costs without compromising quality.
The key to effective revenue cycle management is identifying the leaks and patching them up quickly. It’s an ongoing process of identifying and correcting inefficiencies, but several established strategies help reduce waste and overspending.
Educate Patients Upfront on Medical Billing
One of the biggest problems patients face within the healthcare system is receiving their bill down the line to find massive charges that they were not expecting and are not prepared to pay.
But this isn’t just a problem for patients; it can be a problem for the provider, too.
When patients haven’t financially cleared ahead of time and can’t meet the high costs of service, you and your practice are more likely to end up with bad debt. However, there are many provider resources to help with ongoing payor management and payor provider collaboration.
You can avoid this by beginning conversations about medical care with full economic transparency, including:
- Cost of care estimates
- Information about available financial assistance programs
- Potential avenues of sponsorship for qualifying patients
- Likelihood of insurance coverage
Analyze Cost & Performance Data
With knowledge comes power—the same can be said of revenue cycle analytics.
By making revenue data available in simple charts, graphs, and automated systems, you, as the provider, can readily identify trends in claim denials and missed payments. Once you start to notice problems in specific metrics—a code, location, account, etc.—you can course correct in line with your key performance indicators (KPIs).
For successful revenue cycle management, your processes need to be reconsidered and revamped regularly. This data will provide meaningful insights into where to start—and, more importantly, where to go.
PayrHealth: the Ultimate Cost-Cutting Strategy
Outsourcing is the way of the future, especially when it comes to cost management. A fully optimized, specialized company like PayrHealth can provide more efficient, more successful service than an internal hire—not to mention how expensive it is to add a full-time staff member to your team.
- Effectively negotiate payor contracts, using comprehensive data analysis, successful strategizing, and fierce advocacy for your practice.
- Successfully complete your provider enrollment and credentialing.
- Manage your ongoing contracts to pinpoint revenue leakages and areas of improvement.
- Ultimately, save you money (and a massive headache) on some of the most important but taxing aspects of healthcare management.
You’ll save a lot more than a few cents with PayrHealth—contact us today.
- RevCycle Intelligence. Maximize Provider Revenue with payor Contract Management. https://revcycleintelligence.com/features/maximizing-provider-revenue-with-payor-contract-management
- Verisys. Common Healthcare Provider Credentialing Mistakes. https://verisys.com/common-healthcare-provider-credentialing-mistakes/