By Donna White, Principal Consultant and Owner of Legacy Consulting Services and Legacy Billing Solutions in Montgomery, Alabama.
Managing payor contracts can be a significant challenge for healthcare providers. It’s one of the more common areas the Legacy Consulting Services team sees providers may be losing money. Here are some common issues providers may encounter when dealing with payor contracts:
Varying Reimbursements
Certain payors may offer different reimbursement rates for the same services, depending upon when the contract was negotiated, geographic area and more. It is already somewhat difficult for providers to predict cash flow effectively. Legacy ensures your contracts and fee schedules are up-to-date in order to optimize reimbursement, ultimately yielding a significant return on investment to your organization.
Accessing Networks
Some payors may have narrow provider networks or may require providers to meet certain criteria in order to participate in their networks. This makes it difficult to attract new patients. With expert contracting and reimbursement analysis services from Legacy, your facility can become an in-network provider faster while maximizing your fees and terms.
Managing Complex Contractual Language
Payor contracts may contain complex language and clauses that can be difficult for providers to understand and navigate. This can lead to unexpected costs or requirements that can be challenging to fulfill, especially in value-based care contracts. Examples are: timely filing requirements, denial and appeal timeline, payor for performance metrics, bundled payments, and more.
Negotiating Payor Contracts
When it comes time to renew or renegotiate a payor contract, providers may struggle to negotiate favorable terms or may not have the time or resources to devote to the negotiation process. Our experts are up to the challenge! There are 4 initial steps our team takes to begin negotiating:
- Hold a kickoff call to discuss the process with the client and request a copy of the contract and fee schedules to assure terms may be negotiated
- Write a letter to the payor, explaining the practice, what they do, patient access details, other demographic factors and what differentiates them from other practice
- If contract allows negotiation during this timeframe, request and schedule a call with payor.
- Conduct reimbursement analysis to determine what negotiated rate to propose.
Legacy Consulting Services serves as a representative for the practice to ensure there’s no money left on the table. Using our reimbursement analysis, we seek to obtain at least a 5-7% increase in reimbursements on a monthly basis. Of course, this depends on the current rate, the last time the contract and fee schedule were negotiated, the variance between the fee schedule and Medicare rates, as well as several other important factors.
Contract Review Checklist
There are some key terms and considerations when reviewing a contract as well as questions for physicians to ask when negotiating agreements. The American Medical Association provides a toolkit.
- Does the contract identify the parties to the contract?
- Does the contract clearly describe physician’s services covered by the contract, along with any limitations or exclusions?
- Are key terms clearly defined?
- Does the contract clearly indicate which party is responsible for credentialing?
- Are payment provisions clearly labeled? Things like late payments or non-payments, appeals, rates and claims submissions should be defined.
- Who is responsible for coordinating benefits?
- Does the contract identify all policies with which the physician must comply?
- How long is the term?
- How are amendments handled?
Contact Legacy Consulting Services today for more information about initiating new payor contracts or renegotiating your payor contracts to get the best possible terms.