Payer contracting strategies are a critical yet complex aspect of healthcare revenue cycle management. Today’s blog outlines four essential steps for healthcare organizations that wish to streamline their payer contracting processes and maximize reimbursement rates.
Let’s start with a scenario:
Imagine you are on the job hunt and receive a call from a potential employer letting you know that you got the job. You are excited by this news and ask about your salary. The employer replies that you should wait for your first paycheck to find out. You then ask what hours you should expect to work. Your employer responds that they will let you know if you miss your shift. Lastly, you ask where you should submit your timecard. The employer says that they will deny your paycheck for timely submission if it’s late.
While we know this scenario sounds crazy and you would never treat your employees this way, it still begs the question -- Why would you allow this sort of payer relationship ? In most practices, payers make up 70%-80% of the revenue, but most providers do not know what is in their contracts. Knowing your contracts can empower you to collect even more and protect your practice.
You may not have a copy of every payer contract or even know whether you have favorable payer contracts. Collecting contracts is a major roadblock for many healthcare providers.
While it is your contract, with your signature, it can still take a significant amount of time (weeks or months) to obtain after placing a request. Plus, once requested, it can take a diligent follow-up effort (phone call, emails, fax request, payer portals, mail, or direct rep outreach) from you and your team to finally secure the contract.
Now that we know how difficult it can be to obtain payer contracts, running a good process for compiling them is key. The following are a few tried and true tips to help you meet your goals:
Running a good process starts by targeting the payers you’d like to contact, and defining the scope of how many patients make up your meaningful revenue. Before spending any time trying to contact payers you’ll want to work to identify your top 5-10 payers first. You can measure this based on your time volume or revenue, recognizing that those payers where a small change might occur at a high volume are going to have a larger impact. You might also prioritize them based on when you are able to make changes (change notification period) or get an amendment to your contract.
Once you have identified your top payers, it’s time to work to connect with a person directly regarding your contract. Communicating with a live person is critical to creating a relationship with your payer where you can build rapport and trust. In turn, this relationship will result in an allyship once it is time for contract negotiations. The challenge here is that while some payers are good about publishing contact info for provider reps on payer websites/portals, it may require some creativity on your part to access the best person at other payers.
When calling the 800 number for payers with whom you do not yet have a relationship, begin by asking for someone in credentialing, providerenrollment or network management. These contacts will likely lead to a conversation with someone who can lead you to the most relevant rep to discuss contracts. It may also be helpful to pull up your original contract, if available, and identify who signed it. You can then use this information as a starting point for researching the best contact, including reaching out on LinkedIn, if applicable.
Once you have made contact with a relevant rep, it’s time to build out a project map. Begin by defining the scope and your goals. For instance, you may only want to collect contracts and fee schedules, or, you may want to collect contracts while leveraging some negotiation tactics. Whatever the reason to make contact, be sure it is defined.
Next, outline the best channels for communication. All payers are not created equal and while some like faxes, others prefer phone calls, and some prefer emails to reps. Once communication is established, determine the frequency of follow-up and develop a cadence for contact. Finally, set up tracking and monitoring to keep yourself and the payers accountable. Track a history of exchanges for yourself and to show the payer if they are unresponsive. For additional in-depth exploration of payer contracting strategy, view Rivet’s free payer contracting webinar.
Attempting to reach payers and obtain contracts can sometimes feel like David vs. Goliath. However, it is important to remember that you have a right to your provider agreement. They are your legally binding contracts and you need to know the information in your contract to ensure contract compliance. You may even be legally in breach of contract and not even know it. Don’t give up.
Collecting and compiling payer contracts might feel like a daunting undertaking at first, but now is the time to take it on. You have a right to your contracts, and understanding what they contain will lead to more empowered decision making and added value to your practice.
Don’t let poor payer contract performance hold back your medical practice. Rivet Health’s payer contract management software reduces administrative burden and helps medical practices manage and make the best use of payer contracts. Schedule a demo today for more information.