This sentiment is far too often heard in physician offices when review of contracts is necessary and long overdue. Solo, small, medium and large practices alike seem to be plagued with the problem of not understanding or even knowing where their contracts are.
Seasoned consultants will tell you that when evaluating practices they often run up against the dilemma, and yes, often the client can’t even find their copy of the payer contracts.
There are many reasons to review your contracts regularly. First, we often find payers are not paying providers according to their own contracted rates. Your payment posters and practice managers need to diligently watch for this. Some practice management software can identify underpayments but most systems are not loaded correctly or maintained to do so diligently.
As consultants, we will often review the payment database by specific queries to point out guilty payers. A few dollar hit, for example, on popular Uroflow and PVR by ultrasound can really be costly over time.
This sentiment is far too often heard in physician offices when review of contracts is necessary and long overdue. Solo, small, medium and large practices alike seem to be plagued with the problem of not understanding or even knowing where their contracts are.
Seasoned consultants will tell you that when evaluating practices they often run up against the dilemma, and yes, often the client can’t even find their copy of the payer contracts.
There are many reasons to review your contracts regularly. First, we often find payers are not paying providers according to their own contracted rates. Your payment posters and practice managers need to diligently watch for this. Some practice management software can identify underpayments but most systems are not loaded correctly or maintained to do so diligently.
As consultants, we will often review the payment database by specific queries to point out guilty payers.
A few dollar hit, for example, on popular Uroflow and PVR by ultrasound can really be costly over time.
Many payer contracts are automatically renewable (called “evergreen”) from year to year and serious rate decreases can sneak in at renewal time.
Many require 90 days pre-renewal date notification if you are going to try and change any clauses or get out all together.This is another reason to have them at your ready, on a spreadsheet and review them often. A scheduled reminder 120 days before they come do would be in order.
Contrary to popular belief, it is often possible to negotiate certain terms before signing an agreement. It takes some basic knowledge, communication skills and persistence, but you do not need to be an attorney to do this in most cases.There is more to consider when negotiating a payer contract than just what the payment fee schedule is going to be.
Once again, a few dollar increase on high volume test such as urinalysis really adds up.
There are many other things we feel are worth negotiating such as timely filing deadlines, recoupment rules, termination without cause, dispute resolution, ability to perform ancillary services in-house, amendment only by agreement of both parties, and CPT bundling in accordance with CMS National Correct Coding Initiative rule set.
It is recommended that practices establish an easy to read “grid” or summary sheet of major terms of each payer contract for easy reference and comparison.
The Fee Schedules most payers (and practices) set their charges and payment structure based on a multiplier of the Medicare Physician Fee Schedule.
There are some related issues that need to be defined in the contract here.
Many payers do not follow various Medicare claims processing rules.
They may bundle codes that are not typically bundled by Medicare, they may not allow a facility expense differential for expensive procedures done in the office, and they may even change the order of the CPT codes on a claim to pay lower RVUs at 100% of allowable and cut higher RVU services to lower percentages. It is always recommended that practices obtain a copy of the actual proposed fee schedule of their most common codes and compare it to their Medicare fee schedule and the fee schedules of their other contracted payers. It is very important to closely review those reimbursements where a high cost is associated with the service to confirm the reimbursement is adequate (LHRH drug expense vs fee schedule for example)
Practices should periodically evaluate payer performance on your practice’s criteria, just as payers are trying to evaluate provider performance.
Most practice management software will allow you to determine the volume of patients from each payer and the payment detail by payer by CPT code and frequency.
For busy practices, we often recommend that the lower performing payers be dropped at the earliest opportunity.
Insurance Payers have large databases of claim data they keep on providers. They can use this to establish preferential contracting with providers.
Recently the game has changed.
Through PRS-Urology Service Corp., consultants now have access to a large payer payment database at a nominal cost. This “Urology Data Initiative”, puts our clients in a stronger negotiating seat as they can see how payers compare across regions.
Where do you start?
You must first start by finding and organizing all of your current payer contracts.
If you can not find them, contact your payers for a complete copy, including a copy of the allowables for your most frequent services. Note the timelines and deadlines for making changes. Make a plan, leaving some room for negotiations and then be persistent.
Jim Edwardson is President of Vital Signs Physician Resources, managed care contract director for Urology Associates of North Texas and is a key consultant for PRS-Consulting LLC.
Ted P Hammon, RN is a key consultant with PRS-Consulting LLC and has over 25 years of hands on urology business and clinical experience.
If you’d like advice on contracting issues, or help in evaluating or negotiating your payer contracts, you may contact Jim or Ted by calling PRS Consulting LLC or by the link here.
