Understanding Payer Contracts Is Key To Ensuring Correct Reimbursement
Monitoring #managedcarecontract changes can have a profound effect on the revenue cycle. The process can affect denial and write-off reductions, increase patient responsibility collection percentages, and improve the effectiveness of your charge and payment levels, as well as the timeliness of reimbursement.
Managed care payers are constantly making changes to contract terms, whether it be their fee schedules, how they interpret contractual language, or full-scale policy changes. As a result, physicians and medical practice administrators must remain vigilant in ensuring that they are being reimbursed correctly and competitively by their managed care payers. Here are a few questions to consider:
- Are resources being assigned in your organization to track and implement all of these changes to make sure internal systems are updated in a timely manner?
- Is your managed care reimbursement being tracked on a consistent enough basis to ensure that your payers are providing appropriate reimbursement and that there are no gaps, lags or discrepancies?
- Do your contract management tools provide the timely reporting necessary to prevent revenue erosion?
Despite the importance of payer contract knowledge, physicians, and even their practice administrators and revenue cycle leaders, may feel less than confident when up against payer organizations with legal departments, financial analysts, and advanced software systems.
The entire process of contracting and negotiating with payers is complex, which could make physicians feel like they have the disadvantage.
If you’re among the #medicalpractice staffers who groan when it’s time to review managed care contracts, that could be because you know payers bury confusing language into the documents. One step to understanding what these contracts say is to break down each section and look for key phrases that can help you reduce confusion.
Understand Your Payer Contract and Its Clauses
It’s no secret that healthcare professionals are, to say the least, very busy and incredibly stressed. Between seeing patients, documenting visits, tending to administrative duties, and much more, there are hardly enough hours in the day for many workers in healthcare.
For many, this means that taking the time to unpack and understand a complex and lengthy payer contract is simply out of the question. Moreover, the lengthy and complicated nature of many payer contracts, generated from a complex system involving detailed legal requirements, and different agreements with many physicians, makes this even more challenging.
But whether your organization is negotiating, renegotiating, or simply seeking to better understand its payer contract, educating leadership and staff on your contract can pay reimbursement dividends in the long run. If practice staff understand the rules, they’re more likely to perform better.
Understanding the implications of existing contracts that the practice has signed, new agreement templates under review, or (more alarmingly) amendments that may have automatically been incorporated into the current contract without mutual consent, is critical to identifying key items to address in any negotiation or renegotiation.
Unilateral Amendment
Unilateral amendment is a term every physician should know before negotiating or reviewing a payer contract as #unilateralamendment clauses can have the most impact.
Payer contracts that contain unilateral amendments mean that payers can change contract provisions without notifying the physician. If a contract contains unilateral amendment language, payers can change anything from reimbursement rates to clean claim definitions, and even network participation.
Most payer contracts say that the payer can amend the contract at any time. In the worst case, they say that no approval is required from the physician at all. In the best case, they’ll say, “We are amending this contract and you have 30 days to object to the amendment in writing or it automatically goes into effect”.
Some states mandate that payers notify physicians of any changes to a payer contract, but many do not.
Physicians should be aware of unilateral amendment language in their contracts and negotiate with payers to exclude such language in future contracts, especially as it pertains to the fee schedule.
Keep an eye out for unilateral amendments in payer contract language. Unilateral amendments are some of the most dangerous provisions in managed care contracts for physicians, due to the discretion they give to payers.
Summary
Achieving optimum performance within payer contracts is one of the most important things healthcare organizations can do to both increase financial reimbursements and decrease financial risk.
While optimal performance in payer contracting is a process that takes time, it can be achieved when taking the right steps. These steps include:
- Gaining an understanding of how payer contracting works,
- Learning the specifics of your healthcare organization’s particular payer contract, and
- Leveraging tools and best practices for success in payer contracting.
Conclusion
Why not leverage a powerful combination of resources and tools to maximize your organization’s performance in payer contracts?
CodeToolz’s team of expert consultants holds a unique blend of medical practice management and managed care backgrounds, as well as deep expertise in a variety of payer contract negotiation and management methods.
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