Essentials of Payer Contract Negotiations

1
Essentials of Payer Contract
Negotiations
2
Essentials of Payer Contract Negotiations
Reimbursements are a significant source of
revenue for healthcare practices. Yet, many of
them dont receive the full reimbursement for
delivered services, even when the payer and
provider mutually agreed on a rate.
Unfortunately, keeping up with payer policy
changes is difficult and most practices dont
have a payer contracting expert who regularly
analyses payer contracts. To protect practices
from surprise policy changes that lead to lost
revenue, we shared essentials that will be
required at the time of payer contract
negotiations. Essentials of Payer Contract
Negotiations Analyze Current Contracts For any
practice, payer reimbursements make up around 70
to 80 percent of total practice collections.
Interestingly, practice owners are not aware of
whats in their contracts. By not knowing your
current payer contracts, you might be keeping a
lot of money on the table. You dont want payers
to take advantage of your ignorance. Analyze
current payer contracts. If you dont have the
copies, request them from payers (it might take
up to months time). Meanwhile, you requested
payer contracts, and analyze the claim payment
history. Looking at a payment history for every
payer will give you a good understanding of
reimbursement rates for various procedure codes.
Analysis of current payer contracts could lay the
groundwork for further payer negotiations. Analys
e Fee Schedule The base of any payer contract
negotiations is the billed amount. While billing,
practices need to make sure that they are
charging the lesser amount to payers.
3
Essentials of Payer Contract Negotiations
To get an understanding of industry pricing,
check reimbursement data for various payers
against procedure codes and compare them with
Medicare payment rates. Generally, Medicare pays
less than other insurance carriers. While
comparing fee schedules, you might realize, some
commercial payers may have rates that are higher
than 150 percent or even 200 percent of your
Medicare rate. You wont be billing less for such
payers with this fee schedule comparison. Also,
watch out for factors like the COVID-19 pandemic
and the rise of telehealth services while
analyzing fee schedules. Know Your Value Payers
always rely on facts and data. So knowing your
value and being able to quantify all aspects of
your practice can go a long way to helping you
bargain for higher reimbursement rates. Private
practices that present their facts, figures, and
data during negotiations may end up with contract
terms that are up to 10 percent higher than those
practices that go off of word of mouth alone. Use
comparative data that shows your practice against
a similar practice in your locality and/or
medical specialty. Emphasize your payers with
outstanding quality metrics, patient satisfaction
scores, and other numbers that show the success
of your practice. Include Cost-of-Living Payers
are always hesitant to increase reimbursement
rates and its practice owners skill to agree on
them on the same. To agree on payers for higher
insurance reimbursements, you can share
statistics about cost-of-living in your area.
Cost-of-living expense head includes office rent,
staff salaries, and overhead costs.
4
Essentials of Payer Contract Negotiations

• If you managed to convince the payers about
  increased overhead costs, they are likely to lend
  a hand. Payers dont want you to go out of
  business as that would lead to a loss of patients
  and decreased revenue.
• Other Guidelines for Payer Contract Negotiations
• Payers may change their policies without
  discussing them with healthcare practices. To
  avoid these hidden policy changes, practices
  should include specific language in their
  contracts that require the payer to notify and
  discuss the alteration with the health system
  before the contract is updated.
• To ensure payment and avoid a denied claim,
  practices would reach out to a payer for prior
  authorization. However, payers will sometimes
  still deny a claim even after they have
  authorized the procedure. Look for the prior
  authorization clause and update the wording
  accordingly.
• Each and every payer contract has an opening
  window in which you can update or even terminate
  the ongoing contract. So, its really important
  that you plan your analysis and contract
  negotiations activities within these deadlines.
• Legion Healthcare Solutions is a leading medical
  billing company providing complete billing and
  coding services. We shared the essentials of
  payer contract negotiations for reference
  purposes only. You can consider the above
  essentials as general guidelines as every payer
  contract is different. In case of any assistance
  required for payer contract negotiations, contact
  us at 727-475-1834 or email us at
  info_at_legionhealthcaresolutions.com

5
(No Transcript)