Don’t Leave Ratified Payer Contracts In The File Drawer

In today’s complex, rapidly changing health care environment, physicians are facing enormous financial pressures and tight operating margins. For physicians to stay in business, they must use every available tool to reduce costs, manage their relationships with health insurers and minimize claim denials by third-party payers.

But physicians and medical practice managers often overlook vital ways to improve payer reimbursements and strengthen managed care contracts. To start, here are four (4) ways physicians can better manage their provider-payer contracts to boost the bottom line.

(1) Denials Management

Denials management begins with the provider-payer contract. And even if a contract is already signed, don’t leave it in a file drawer, pull out the contract periodically and review the payer reimbursement rates against member utilization.

Then put analytics to work to determine the strength of the contract and assess what is working and what is problematic. Don’t be afraid to renegotiate problem terms, amend the contract to achieve a better balance or terminate an unworkable agreement.

(2) Reversing Unreasonable Claim Denials

When negotiating, include a requirement for the payer to reverse unreasonable claim denials.

The contract should include an affirmative requirement for the payer to reverse claim denials when the provider can show that a delayed claim submission was beyond the provider’s control, and the provider made reasonable efforts to resolve the situation.

Payers may insist on a reduced payment, even for short delays in notification or claim submission. But a 50 percent reduction in reimbursement due to a 24-hour notification delay, which does not otherwise adversely affect the payer or care provided to the patient, would seem to amount to a disproportionate forfeiture.

Such liquidated damages clauses may not stand up to judicial review.

(3) Insist On At Least Two Levels Of Appeal

State law may govern appeal rights, but at a minimum, the contract should include two levels of appeal.

Many denial letters make clear that only a cursory review (if that) was afforded at the first level, with no meaningful review of the facts of the claim or applicable law.

Clearly, the denial of a first-level appeal should not be the last avenue of redress for an improperly denied insurance claim. Having a second bite at the apple with sufficient time to file the second appeal, a minimum of 30 days from the date of receipt of the first-level denial, allows the provider to present the case to a fresh set of eyes.

Furthermore, even when the physician has exhausted their appeal rights under the contract, there may be other avenues to address claims with the state insurance regulator or pursuant to a dispute-resolution provision in the contract.

(4) The Dispute-Resolution Clause

Ensure the dispute-resolution clause allows for prompt claim resolution while containing costs.

If an appeal letter doesn’t do the trick, the provider may have to escalate claim denials according to the dispute-resolution provision in the contract.

The dispute-resolution clause should allow for prompt claim resolution while containing costs. Standard dispute-resolution terms can vary as to forum and time frame, as well as who decides the case.

The insurer frequently insists on an arbitration provision to ensure privacy and avoid any negative publicity surrounding a lawsuit.

Arbitrations also can benefit the provider because they proceed much more expeditiously than cases in the overburdened court system.

Unless the parties reach an agreement to toll the statute of limitations, an arbitration must be filed by the specified deadline, or the claims may be time barred.

Providers should always insist on a minimum of one year to file an arbitration following a notice of dispute, 90 days can go by too quickly when parties are trying to work out differences.

Summary

Payer contract negotiations present challenges for healthcare providers. Understanding these obstacles and implementing specific strategies can lead to better outcomes. By using historical data and maintaining open communication, providers can secure more favorable agreements. Overcoming these challenges can enhance financial stability, thus allowing for continued investment in patient care.

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