5 Steps to Increase Payer CollectionsOn 4th Apr 2019
Sooner or later, we have all heard the warning, “Don’t sign it until you’ve read it”. Wise though it may be, it can be difficult to abide by that sage advice, especially when signing 3rd party payer contracts. Despite knowing full well the importance of every word on every page, the sheer volume makes it daunting at best, impossible at worst. For facilities, those millions of contractual words hold the details for reimbursement. Knowing contract terms inside out is one of the five most important steps to increasing healthcare payer contract management efficiency and collections. Here is a detailed look at what we consider the 5 most important steps to increase payer collections:
Step One: Automate.
Let’s be honest, payer contracting is detailed, complex, and time-consuming, not to mention overwhelming. However, facilities can hold their own if they know their contract terms and implement automated contract management. It’s a smart, powerful, and timely business practice that ensures your facility knows what is going on with multiple payer contracts - every day.
The challenge is to audit, manage, and track contract details across facility offices and providers. The more those numbers increase the more quickly payer contract management can spin completely out of control - unless it is automated.
OB Hospitalist Group (OBHG) in South Carolina had exactly that problem. It operates 130 active and onboarding hospitalist programs across 30 states with 600 employees. The group had contract details on an excel spreadsheet and manual processes. Different team members were responsible for their own contracts and there was no way to track contract changes that would adversely impact reimbursement. With more than 200 payer contracts there was ample room for costly problems. However, once payer contract management was automated, all the contracts were centrally managed, while giving each team member access to the information. Automatic notifications alert staff to changes in contract terms that could impact reimbursements. As RevCycle Intelligence reported, “ The system reduced the risk of contracts renewing at the same terms as the original agreement even though the organization’s needs for those services changed. Also, if there was a termination for convenience provision, or if the agreement automatically renewed unless someone did something” a notification was received, saving valuable dollars. Contract automation streamlined workflow to save time, money, and prevent healthcare denials.
Buried in your healthcare payer contracts are all the details that will either result in timely reimbursements or denials and underpayments. A payer contract management system can give you the peace of mind you are working your claims according to payer contract and collecting what you’re owed.
Step Two: Know your contract terms
One of the most important things is to know your contract terms, but with so many different payer contracts, it is hard to keep track of all of them. An automated system will ensure that key A/R staff receive notifications when contract terms change so that immediate action can be taken. Here are some of the terms you need to know:
Allowed amount: This is the maximum amount that the payer will reimburse the provider for services that are covered by the contract and delivered in-network. It’s important to note that the rate may not cover all of the charges incurred by the provider and there may also be patient pay.
Clean claim: It’s important to know what constitutes a clean claim because it will avoid delays and denied claims. Some of the issues involved in clean claims include incorrect patient information, missing physician approvals, and incomplete coding.
Fee schedule: As important as “allowed amounts” is the fee schedule. This is the negotiated, contracted amount for each service with each payer. The fee schedule should be attached to the contract.
Medical necessity: This lies at the root of whether a service can be billed. It covers services and supplies to treat conditions, illnesses, diseases, injuries, etc. A payer will only cover a service or supply that is deemed medically necessary and covered by the contract.
Step Three: Know the Unilateral amendment
Unilateral amendments mean that payers can change contract provisions without notifying the provider. They can change reimbursement rates, the terms and conditions of clean claims; they can even change network participation. Here’s the catch; some contracts say they can change the terms with no approval from the provider. Others say that the provider has 30 days to object to the change. If instant notification is not received and the objection cannot be filed, substantial reimbursement may be lost. Automation guarantees instantaneous notification.
Step Four: Implement Efficient Healthcare Denials & Underpayments Management
This is where automated systems really shine. They hold the ability to calculate reimbursement in advance so you can compare expected amounts to received amounts. That laser tags healthcare denials and underpayments management. Expected reimbursements are calculated on numerous factors including:
Place of service
Bill type and bill charges
Value, condition, physical status codes
CPT, HCPCS, revenue code
Length of stay
These items can be entered in multiple combinations or even single entry and allows hierarchy or order of operation per contract. When the system detects a denial or underpayment, it flags it immediately for remedial action.
Automated healthcare contract management also has the ability to identify and build contract terms in order to calculate reimbursement based on one or more combinations of:
Place of Service code
Number of units
Importantly, automated systems have the ability to forecast expected reimbursement for claims submitted but not yet paid. Instead of wondering about the level of payer contract compliance, and whether underpayments are undermining the bottom line, you have cold, hard data and automated notifications to protect revenue.
Step Five: Know what you are owed
The ability to calculate expected reimbursement is not only the best method by which to identify healthcare underpayments, it is the best way to track payer contract compliance. The ability to manage multiple payer contracts simultaneously is the only way to know what you are owed and if it is paid. Data that allows you to identify trends will show you which payers repeatedly underpay, deny and delay claims.
Automated payer contract management systems have the ability to calculate expected reimbursement for primary, secondary, and tertiary payers and exclude patient responsibility from each. They can accommodate multiple plans for the same payer with unique reimbursement methodology and store unlimited contract versions for historical, current, and future effective dates. That is powerful data to give you absolute control over contract knowledge, management and tracking.
Have the Power of Revenue Control
When you take these five steps to increase payer collections, you suddenly have the power of revenue control. Reimbursement improves and so does the capacity to forecast business revenue and growth.
A good healthcare contract management software, will also include a contract negotiation module, this can help you overcome the challenges that come with determining whether contract terms are fair and help you increase payer collections.
Contact Revenue Masters today at (877) 591-2590 or email us at firstname.lastname@example.org for more information about a powerful healthcare contract management system & to start increasing payer collections.