A Structured Approach To Payer Contract And Fee Schedule Management

Practicing #physicians encounter a wide variety of options when negotiating the terms and conditions of payment for services. This article is designed to help physicians evaluate #payercontracts and understand the importance of proper payer contract management. The materials in this article are for education and informational purposes only and should not be considered legal advice.

Payer contracts are a road map of revenue for providers. When contracts are negotiated, the rates provide a map with which a physician, medical group and/or manager can forecast revenue. However, inefficient healthcare contract modeling and management can result in the loss of valuable revenue dollars.?

Deciding to Contract with a Payer/Join a Network

The information described below is intended to help practices understand the overall strategic considerations involved in their payer negotiating strategy. A practice’s ability to negotiate a favorable contract will be determined in large part by the context of the negotiation, including the factors described below.

There are many factors to weigh when deciding to contract with payers, including your existing payer mix, patient population, and which plans, and employers offer insurance/cover beneficiaries in your market. In many markets, #healthinsurers are heavily concentrated, and there may be a predominant payer with which you will need to contract to serve most patients in the region.

Physicians should consider the following when deciding whether to enter a payer contract:

• Benefits of in-network status, such as securing clear reimbursement terms and rates, having access to payer’s members, and avoiding the challenges associated with out-of-network status.
• Ramifications of out-of-network status, such as payment of usual and customary charges (not billed charges), limits on out-of-network benefits, collecting from patients, and evolving laws on surprise billing.
• Payer’s market share (i.e., number of members affiliated with a particular payor in the market).
• Physician organization’s value proposition, including what sets the physician apart from other, similar physicians.
• Operational considerations, such as whether the physician organization’s processes align with payer requirements (and the operational or cultural costs of achieving such alignment).
• Payer’s past performance.
• Payer requirements for data sharing (access and evaluation of associated privacy/security concerns).
• Volume of services with utilization management requirements (such as prior authorization).
• Payer physician profiling and measurement programs that track quality and cost for each physician. (i.e., what methodology/metrics does the payer use? How will this be publicly reported – especially to patients? What is the dispute process? How can this affect payment – e.g., does a “preferred” ranking put the physician in a different tier with more favorable patient cost share to attract more patients?)

While the decision to join a payer (and to negotiate with a payer) may be complex, practices can optimize their opportunities by developing a clear understanding of each party’s goals and constraints in the negotiation.

Benefits

Clearly, there are many benefits to proper contract and fee schedule management. When it comes to payer contract management, knowledge is power and planning is essential.

The best tools for payer contract management (our CodeToolz Contract Analyzer) are simple, yet comprehensive. It all begins with a payer matrix for each payer; a one-stop shop for information. Here’s our payer matrix.

Our CodeToolz Contract Analyzer allows practice’s to:

• Verify line-item, as well as aggregate, contractually allowed amounts.
• Monitor payer compliance with contract terms and model the financial implications of proposed contracts.
• Validate Reimbursement Accuracy. Accurately compare expected payment to actual reimbursement.
• Simplify Contract Management. When providers centralize all contracts in one location and have firm control over contract details, they find they also have more control over reimbursements.
• Recover Underpayments. Find lost revenue with data-driven insight.
• Negotiate Better Contracts. Use real claims data to analyze financial impacts of proposed changes and prepare for emerging reimbursement structures. With contract analysis, medical groups can approach payer contract negotiations armed with data to boost reimbursement.
• Test Payer Offers. Contract analysis enables medical groups to run “what if” scenarios, so they can better understand how various contract terms will affect payment for the precise mix of services provided. It also allows you to proactively spot unfavorable contract terms, determine targeted negotiation strategies and compare competing contracts (payer market analysis).

Summary

The essential tools of managing payer contracts allow providers to monitor, track, manage and analyze negotiated contract terms and rates. Simplified views of contracts by payer allow for full analysis of contract terms and reimbursements across your organization. When implemented, the tools empower physicians and managers to monitor contract performance and improve revenue. That’s the ultimate goal. #physicians #payercontracts #healthinsurers

Conclusion

Now that you know how to solve your payer contract management challenges with user-friendly contract analytics and management, it is time to introduce you to the best solution for your needs. That solution is the CodeToolz Contract Analyzer.

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