2023: Analyzing Your Payer Contracts and Reimbursements
When was the last time your practice looked at your contracts with payers? Do you have the entire contract, or just the signature page??Many practices find the contract review process complex and overwhelming. Yet understanding how you are being reimbursed, and why you may not be getting a full reimbursement for the services you provide helps your practice identify crucial issues.
Accepting denials and underpayments as the status quo is one of the most common reasons why practices struggle to remain profitable. Without a focused strategy to analyze payer contracts and reimbursements, practices run the risk of leaving money on the table.
Analyzing Payer Contracts
Practices are encouraged to find the fully executed contracts for their top ten payers and compare reimbursement, per CPT?, for the top 30 CPT? codes for each payer. This allows you to compare reimbursement by payer and current Medicare rates. Is one payer paying less than most payers for some of your most frequently billed CPT? codes or are they denying the service which requires your practice to appeal?
By reviewing your contracts and identifying payment issues, you can create a matrix of important data points for each contract and begin the process of managing your revenue more accurately.
Armed with this information, you can look how your practice’s strengths, like clinical expertise, differentiated services and patient evaluations can help you negotiate with your payers to structure contracts which best represent your practice and the patients you serve for the best possible reimbursement.
Contract Analysis enables medical groups to run real-world “what if” scenarios, so they can better understand how various contract terms will affect payment for the precise mix of services provided, even down to how much individual providers stand to gain or lose. It also empowers you to proactively spot unfavorable contract terms, determine targeted negotiation strategies and compare competing contracts.
Analyzing Payer Reimbursements
Do you dedicate resources to analyzing payment accuracy? Plenty of practices don’t—and are putting too much faith in payers to reimburse in full on every claim they complete, and this good faith can lead to financial losses.
Simply assuming payer accuracy is a recipe for a warped #revenuecycle. Underpayments are more common than you think and it’s easy for denials to slip through the cracks when you lack a strategy for analyzing claims at large. If you don’t spot a problem in your reimbursements early on, it may recur unnecessarily leading to excess losses.
A few extra measures taken on by the staff in your medical practice can go a long way to enhancing your revenue cycle performance and staying profitable in the long run.
Tracking your payer reimbursement performance is critical for ensuring your practice’s financial success. This financial KPI, or key performance indicator, establishes a baseline for where your practice currently stands so that you and your team can develop goals for the future. Monitoring a variety of KPIs at your practice demonstrates a commitment to operational excellence and can help you determine where the points of improvement are within your practice.
Best Practices for Analyzing Payer Reimbursements
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Assess Trends by Code
Take a look at your practice’s top 30 codes by volume per payer per month for the last six months. Ask yourself a few questions when examining this information, like:
Ideally, you won’t find any of these issues; however, when you look at six months of data, any payment gaps should show themselves quickly. Six months is enough of a time period to substantially provide information but not overwhelm your analysis of trends from years past.
The Impact of Healthcare Regulations
With recent government regulations affecting the healthcare industry, healthcare practices have been impacted in numerous ways. Certain third-party health insurance payers?have negotiated fee-for-service contracts with providers, which has resulted in lower reimbursement. HIPAA, the Healthcare Insurance Portability and Accountability Act has also had an impact, by tightening the requirements for claim data submission. And as the healthcare system transitions from a fee-for-service a value-based reimbursement model, healthcare practices and providers have had to adjust the way they bill for care provided. Due to these changes in government regulations, having a healthy revenue cycle is more important than ever.
A Proactive Approach
Despite many providers’ apprehension regarding managed care contracts, payer contract optimization is a valuable strategy for increasing revenue. It’s more than possible to achieve higher fee schedules and reimbursements from payer contracts, but specialized knowledge, a proactive approach, and detailed data-driven analysis are all imperative for success.
Due to these imperatives, many physician practices engage with a partner that can demonstrate proven results. Especially now, as practices dedicate all available time to increasing patient volume and providing excellent service to these patients, outsourcing payer contract negotiation can be greatly beneficial.
Whether a trusted partner or internal staff, your team should adhere to best practices across contract optimization’s three main phases:
Summary
Payers contracts have gotten larger and managing them on a consistent level will become even more challenging, which means implementing the right analytical tools to meet the current and future challenges has never been more important to your organization's bottom line. Don't wait until it’s too late to develop your contract management strategy. #revenuecycle #cptcodes #payers
Let the experts at CodeToolz take your contracting efforts from burden to competitive advantage. The bottom line is that in negotiations, knowledge is power and planning is essential. Contact Us Today! (512) 787-1852