Practices engaging in the payer contracting management and negotiation process can find themselves facing a myriad of challenges. Many of these challenges are born from a lack of contract analytical and management tools.
Payer contracting is a crucial area of practice management for attaining higher reimbursement rates with the appropriate analysis and knowledge.
Follow these four basic steps to develop a proactive, data-driven approach to optimizing payer contracts:
Step 1. Compile All Executed Agreements, Amendments and Current Fee Schedules
Practices must understand the reimbursement methodology tied to their managed care agreements, many of which allow for periodic fee schedule changes by the payer through amendments.
Step 2. Assess Top Codes and Reimbursements for Each Payer
Practices should run a report on the top CPT®/HCPCS codes the office bills by annual volume, by payer, and the dollar amount tied to them. This helps identify how much revenue is generated from each payer on the services your practice performs most frequently.
Step 3. Build a Payer/Code/Reimbursement Matrix Across All Payers
The purpose of the matrix is to clearly indicate reimbursement received for each of your top codes for each payer. This inventory also will help your practice prioritize the most frequently billed codes and evaluate opportunities for rate negotiations.
Step 4. Compare Reimbursement Rates Against Medicare
Use Medicare reimbursement rates as your benchmark. For each code in the matrix, are the commercial payments above or below the Medicare rate? Many payers set reimbursement at a certain percentage of the Medicare fee schedule. Others create their own fee schedules, with some as low as 70% of the Medicare fee schedule. Reimbursement rates that fall below Medicare rates should raise a red flag.
Practices must also stay aware of renewal windows, negotiation deadlines, and fee schedule changes so their practice can remain proactive when discussing contracts with payers.
Contract rates will become more favorable when agreements are effectively managed and payers are approached in the right way. With knowledge, data analysis and proactive management, practices can establish more productive working relationships with payers and achieve their desired end-goal of securing better reimbursement rates.
YOUR PAYER CONTRACT MANAGEMENT CHALLENGES SOLVED WITH THE CODETOOLZ CONTRACT ANALYZER
Now that you know how to solve your payer contract management challenges with user-friendly contract analytics and management, it is time to introduce you to the best solution for your needs. That solution is the CodeToolz Contract Analyzer.