As a healthcare provider, the last thing you want is to have to argue with payors about reimbursements, contractual variances, fee schedules, and negotiations. At the same time, your practice deserves prompt and adequate compensation for the valuable medical care and treatment you’ve just provided.
Whether you are a primary care physician, a mental health professional, or a doctor at a private practice- Managing ongoing payor relationships is a delicate balancing act.
Luckily, there are provider resources available and companies like PayrHealth to help you keep track of contracts, maximize reimbursements, and optimize payor revenue. Not only will PayrHealth identify ways to cut costs, they can also offer valuable resources to improve payor provider collaboration.
#1 Contract Management Analytics
Underpayments and claim denials are two common problems for providers. It’s easy to notice these instances because you can see the way it affects your practice’s bottom line—but it’s not quite as simple to reverse and prevent such payor decisions.
However, many claim denials and contractual variances are preventable, if you can identify their root causes.
To begin identifying trends, losses, and eventually, solutions, start by putting a Reimbursement Variance process in place, which should have at least three basic components and guidelines:1
- Accountability – The first step is gathering and clustering baseline data regarding denial codes and contractual variances. The denials should be linked to their Claim Adjustment Segment (CAS) codes and sorted by reason. The contractual variances should be similarly grouped in categories such as stop-loss provisions, multiple procedure discounts, and other commonalities to identify important patterns. These categories should then be linked to the workflow to pinpoint if and when a mistake was made.
- Reporting – The data collected should then be presented based on these identified trends and patterns, including reimbursement variances and denials by payor, category, code, and so on.
- Prevention – Based on the data, your team of providers can identify the most common reasons for denials or variances, then adjust their reporting and patient charting practices to eliminate these instances.
#2 Electronic Health Records
Contract management analytics opens the door for much-needed conversations about shortcomings and areas of improvement. These solutions will differ from facility to facility. However, implementing and maintaining an accurate system of Electronic Health Records (EHRs) is a solid place for any organization to start.
EHRs save time and money when it comes to payor reimbursements. This is for a couple of reasons:2
- More detailed information allows for more complete coding. This could result in fewer denials or underpayments due to missing data or insufficient evidence.
- With a fully optimized, easy-to-use charting system, providers are less likely to forget to document and therefore request reimbursement for each individual service they provide.
- Providers can more readily and successfully appeal denials because they have proper documentation to make their case.
There is still room for human error with EHRs. However, if all users undergo comprehensive training and utilize the system properly, your practice should be able to secure more accurate reimbursements from payors.
#3 Central Contract Management System
With so many different payor contracts, it becomes increasingly difficult to manage each one individually without a centralized database and management software.
With a central system, the members of your organization will be able to:
- Access and search each contract for specific terms and clauses in order to properly meet each payor’s reimbursement requirements.
- Receive notifications regarding auto-renewals, upcoming renegotiations, important contractual deadlines and provisions, and any other updates.
- Check the status of various payor contracts to ensure each provision is being fulfilled promptly and properly.
- Electronically sign, distribute, and track payor agreements via a secure network.
This way, you can effectively manage your relationships with hundreds, thousands, or even tens of thousands of different payors. You’ll be able to hold the payors accountable for their obligations while simultaneously fulfilling your end of the bargain to maintain a positive working relationship.
#4 Automated Exception-Based Utilization Management System
There are several available resources for providers to improve their internal administrative systems, which can help with ongoing payor management. However, providers are still subject to the payor’s decision-making process.
Many payors still use a manual process to approve provider requests to deliver care. This is not only inefficient but is also prone to human error and subjectivity. The payors act as gatekeepers while providers need continual permission to do their jobs.
With an automated, exception-based system, the entire dynamic changes in two key ways:
- There are mutually agreed upon terms for the procedures, patients, and circumstances that automatically get approved for coverage. The claim enters a manual approval process only if the patient does not meet all the requisite conditions.
- There is a more even playing field between payors and providers. Instead of providers requesting and payors accepting (or rejecting), physicians know exactly what to expect and can make decisions accordingly. There is a more reliable system for approvals and denials that is not subject to human interference.
When qualifying procedures and services are automatically approved, the chance of a mistaken denial (or what your practice believes is such) goes down significantly. Even though it’s possible to appeal, it takes up the valuable time and resources of your administrative staff. With an automated system, you’ll benefit from more accurate claims processing and reimbursement without the additional burden of manually looking through and appealing each claim individually.
An automated utilization management system also benefits the payors, which can improve the payor-provider relationship. The patient’s clinical data comes to the payor through a secure, electronic system, once again without alteration. It’s a pure source of data that increases the reliability of their reviews.
#5 Revenue Cycle Optimization
The healthcare revenue cycle is a large and complex system that begins with patient intake and ends with their discharge, though there are many ups and downs in the interim.
Revenue cycle optimization is a process of pinpointing, investigating, then resolving instances of revenue leakage. These can occur anywhere within the process—one major pain point is with claim denials. Practices are losing money because of avoidable mistakes.
In addition to contract management analysis, there are several concrete ways that any practice can better manage their payor reimbursements:
- Upfront education on billing – It’s important to train front-end staff on important billing tasks such as using billing forms (the CMS-1500 or UB-04) and clearing patients for payment early on. Talking to the patients upfront about the cost of care, insurance coverage, and financial assistance programs will better prepare them for the upcoming bill, reduce claim denials, and help your practice avoid accruing bad debt.
- Revenue cycle software – Software is the wave of the future. This is just one of many types that can improve payor management. A revenue cycle management (RCM) system will automate medical coding and streamline insurance verification for increased approval rates.3 An RCM will also show a patient’s insurance information when they schedule an appointment.
- Effective billing model – There are several medical billing methods, but two that are recommended for independent and medium-sized practices:4
- Outsourced model – The major back-end functions like billing, reimbursements, and appeals will be managed by an independent company to allow the physicians and other medical staff to focus solely on patient well-being. A specialized third-party will be well-equipped to handle the business side of your operation and deal with payor disputes.
- Hybrid model – This emerging method combines two other billing types, centralized and decentralized, to create a happy medium. A larger, centralized head office would focus on big picture functions, including standardized reporting and large-scale analysis. The more immediate functions, like coding and charge entry will be managed by the individual physicians and practices.
#6 Effective Contract Negotiation
You can make incremental changes within your organization, but the real difference comes in contract negotiations.
After gathering concrete data and identifying instances of underpayments and contractual variances, you can bring this telling information to the negotiation table to secure more favorable terms—or, you can outsource to a company that does it for you.
PayrHealth: The Ultimate Provider Resource
PayrHealth is the managed care contracting solution. Our expert negotiators and strategists handle virtually every aspect of ongoing payor management, including:
- Revenue cycle management
- In-depth data analytics
- Centralized contract management
- Contract negotiations (and re-negotiations)
Outsource to PayrHealth for ongoing payor management and contracting solutions so that you can focus your energy where it’s needed most—the patients who rely on your expert care and attention.
- PMMC. How to Maximize Reimbursement with Contract Management Analytics. https://blog.pmmconline.com/blog/how-to-maximize-reimbursement-with-contract-management-analytics
- Healthcare Innovation. AHIMA: EHRs Can Lead to Better Coding, More Accurate Reimbursement. https://www.hcinnovationgroup.com/clinical-it/electronic-health-record-electronic-medical-record-ehr-emr/news/13021187/ahima-ehrs-can-lead-to-better-coding-more-accurate-reimbursement
- RevCycle Intelligence. What Is Healthcare Revenue Cycle Management? https://revcycleintelligence.com/features/what-is-healthcare-revenue-cycle-management
- RevCycle Intelligence. Key Ways to Improve Claims Management and Reimbursement in the Healthcare Revenue Cycle. https://revcycleintelligence.com/features/Ways-Improve-Claims-Management-and-Reimbursement-in-the-Healthcare-Reve