There are several areas of importance when reviewing payer contract language. Following are 10 of some of the most common ones:
Amendments. Each contract has language pertaining to the process by which contracts are amended or the ability for parties to revise the agreement. Some contracts allow payers to amend at will without consent, initiating changes the practice cannot stop. Practices should make certain the contract can only be amended upon mutual agreement, in writing, in advance and by mutual signature.
Timely filing. Ideally, practices should have 365 days to submit a claim. While most will send claims over quickly, having a fair time window for filing allows for anything that may fall through the cracks.
Prompt pay. Contract language should specify payers are required to reimburse the practice within 30-45 days on all plan products for properly submitted claims or are otherwise subject to state regulations.
Over/underpayments. Contract language should specify a mutual timeframe for both parties limiting how far back either can go to collect or refund the amount over or under paid.
Termination. Contract language should specify either party can exit the agreement without cause within a fair amount of time. Contracts often have a tight window for termination ability including sometimes being tied to an anniversary date which narrows the exit opportunity even further.
Mergers/assignment. Contract terms relating to mergers and assignments should be reciprocal to the payer and the practice. Payers enter mergers frequently and do not ask the practice for permission. Similarly, practices should have the same freedom to conduct a business transaction, whether it is a merger or assigning a contract.
All services. Contract language should allow practices to provide (and be reimbursed for) all services within the scope and expertise of their specialty and license, so that they are not limited to a certain set of services.
Medical records. Timelines for the payer’s ability to request records should be well defined. Language can also be inserted to limit the number of medical records and frequency of reporting requested in a given period.
Arbitration. The contract should have reasonable and fair arbitration language, ultimately ensuring both parties are permitted to access all protections under the law. Clear time frames and cost responsibilities are critical, as well as proper jurisdiction.
Network Requirements. Network’s requirements are a key component of payer contracts. The provisions detail the networks in which provider organizations can participate, as well as the credentialing requirements providers must meet in order to join a network. Providers should ensure they join the appropriate network for their practice to generate revenue and increase patient volume.
Calculating basic payer analytics. Calculating the practice’s payer mix prior to negotiations is very important, as it is critical to understand what percent of the practice’s business comes from each health plan.
It is important to stay on top of these analytics, as this information enables practices to prioritize payers for renegotiation. A practice’s service mix may also change over time, depending on new offerings at the practice. These service line changes impact the volume distribution which can lead to fluctuations in the overall weighted reimbursement.
Finally, it is crucial to perform a reimbursement analysis, which considers the practice’s utilization history for all codes, current payer fee schedules, and where each service line comes in as compared to a percent of the current Medicare Fee Schedule.
Analytics allows healthcare providers to understand the true value of their payer contracts. Physicians need the ability to visualize their existing contracts and how commercial payers stack up against each other.
SUMMARY
Understanding the terms and provisions in a payer contract is key to maximizing reimbursement, preventing denials, and operating a smooth revenue cycle.
Provider organizations can maximize their revenue by understanding the basics of payer contracts, diving deeper into contract language, creating a central space for contracts, and preparing for negotiations.