How is Your Practice Tackling Payers Evolving Approach to Reimbursement
- Percentage of gross charges
- Percentage of net revenue
- Percentage of patient volume (or how many unique patients per payer)
- Are the payer’s communications with the practice accurate and timely? How is their customer service? How often do they fail to answer phones or you reach busy signals?
- Net collection rate
- Percentage of payments of A/R greater than 90 days
- Number of days in A/R
- Average number of days to initial payment
- Payments vs. contract rate variance
- Top three reasons for denial
- Percentage of denials on claims
- Is there online claim status verification? Insurance verification? Eligibility?
Commercial payers are working toward cutting costs and increasing quality, by creating policies and designing plans to narrow networks and place more emphasis on fewer readmissions. As contracts are renewed, look at the standard provisions section as payers create value-based payments. There may be clauses that change the structure for medical necessity; create beneficiary hold harmless agreements (where the patient cannot be billed if the payer is no longer in business); or place additional stipulations on your practice like providing 24-hour coverage and cooperating with their guidelines.
Your practice also needs to look at the variable provisions in your contracts – understanding the services that require pre-certification, addressing your use of Advanced Practice Providers, or termination causes.
With the new healthcare environment of bundles and episodic payments, providers need to prepare their practice for change – consider the patient’s total episode of care, including what happens after discharge; discuss the best approach to value-based care, and strengthen your revenue cycle management capabilities to manage both patient responsibility and payer denials.