Payers are often aggressive in establishing and updating contracts, but only when it benefits them. When their terms are unfavorable for providers or the market has shifted, they tend to drag out contract renegotiations, prolonging the process to maintain their advantage. They put in place contracts that outline fees and terms that benefit them. And they’ve succeeded. Payer net profits soared into the billions or even tens of billions of dollars. That profit is a far larger margin than providers can achieve.
Many healthcare leaders feel payers count on providers being too overwhelmed to closely read and review their contracts and amendments.
Some providers may not understand the terms in their contracts and will let contracts go unreviewed for years. Other providers may depend on spreadsheets that are impossible to cross-reference, or capture and track the few amended terms that payers send in the mail.
Hold Payers Accountable with Contract Management Technology
There is a new leader on the scene that puts providers and payers on a level playing field. Contract management technology helps healthcare organizations find the time, expertise, and organizational and analytical skills to advocate for themselves. Here’s how to use this technology to ensure your practice is reimbursed the revenue you’ve earned and expect.
Contracts Favor Payers
Payers create contracts that give them an advantage. This is obvious when you consider the payer’s right to change the contract without the provider’s approval. Sometimes payers give providers 30 -days from the date an amendment was crafted to object. Often, this period is too short for healthcare organizations to respond, making the amended terms effective automatically.
Often payers add discrete conditions that state if the insurance company decides to amend the contract, they are not obligated to get provider approval. Understanding these stipulations requires time and experienced staff to regularly review and analyze contract language. This is difficult for a practice who is facing regular staffing shortages and staff burnout.
All too often, payers lay out reimbursement rates that are complex, calculated from various “proprietary” (secret) source files, and updated within a generalized window of time. Terms like this make it nearly impossible for a provider to successfully dispute underpaid claims, let alone know what they should be reimbursed for claims at all. The payer always seems to have a way to avoid paying providers a cent more.
Many healthcare organizations assume that efforts to negotiate terms and rates will be ineffective, if not useless. But providers are not powerless. Arming healthcare organizations with payer contract knowledge can be beneficial in many ways: avoiding denials, strengthening prior authorizations, receiving the full reimbursement without having to submit several appeals.
Providers Need a Proactive Approach to Contracts
Payers shouldn’t be the only ones creating contracts. Healthcare practices must have input in determining reimbursement rates; days the provider must submit a claim; days the payer must reimburse for services; scope of services covered by the payer; claim denial and dispute procedures; and notice periods for renegotiation and termination. Both parties involved in the contract should negotiate components that have an impact on the daily business operations of the practice and the provider’s ability to care for and treat patients.
The Effectiveness of Payer Contract Management Technology
Contract management technology learns contracts and analyzes actual reimbursements to report on discrepancies and payer metrics. Reports identify where you’re being underpaid; which payers offer your practice the highest fees and most favorable terms; the contract’s associated products and overall impact to your practice; which contracts are returning the most revenue; and how proposed contract changes will impact incoming revenue.
This also reduces staff time on administrative and data entry tasks; provides visibility into contracts; provides updates on rate changes in real-time; minimizes errors in documents; and manages plan details, reimbursement rates, and expiration dates.
These tasks bolster provider revenue and let payers know that you’re paying attention.
Choosing a Contract Management Technology Partner
There are many factors to consider when selecting a contract management technology partner. The right partner combines human intelligence and advanced digital tools to surface insights your team can act on. They integrate themselves into your team and provides true partnership, developed through a deep understanding of your business. Their technology solution needs to provide features, like payer benchmarking, that work together to provide an overall picture of payer performance and accountability. All of these things work together to alleviate the burden of time and effort for your team so they can focus on other tasks.
Implementing a Payer Contract Management System
After you’ve decided on implementing a payer contract system, having your contract documents centralized is just a step away. To set up your payer contract management system correctly:
- Request your most recent contracts from your payers. Store and track them.
- Determine payer performance through fee schedule and payment reviews, starting with your most commonly billed services.
- Review contracts for recent reimbursement increases.
- Compare reimbursements across payers by code.
- Find which payers contribute the most to your total revenue based on your patient population and the insurance products that may be associated to each payer contract.
- Consider renegotiations with payers who offer lower reimbursements.
- Develop goals for renegotiations.
Common Features of Payer Contract Management Technology
During the evaluation of contract management technology vendors, it’s important to understand how their products optimize reimbursement rates, track deadlines, and improve terms. Most payer contract management technology seems to offer similar features, including contract negotiation and monitoring; contract forecasting; analytics; contract workflow automation; and integration with other systems.
Capture More Revenue with AC3
AC3 can bring transparency to your entire revenue cycle. Our Payer Contract Intelligence centralizes your contracts and benchmarks your reimbursements. Evaluate each payment against contract terms, flag discrepancies, and notify your team. AC3’s Payer Contract Intelligence delivers the insights necessary for proactive negotiation, holding payers accountable to the contracted rates and terms that will assist your team’s recovery efforts, and pinpointing the root causes to prevent future underpayments. Ready to see our solution in action? Schedule a demo today.
