20 ways to manage your payers more successfully
From contract negotiation to problem resolution, you do have control
By Steven E. Fisher, MBA
Mark Twain said, “Everyone complains about the weather but no one does anything about it.”
Many orthopaedic surgeons express similar frustration with respect to their payer agreements. While no one can control the weather, orthopaedists can control how they handle relationships with their payers. The following 20 tips can help you negotiate payer arrangements and get the reimbursements you deserve.
Designate two people in your office to keep track of contracts with payers and negotiate agreements with them. You need two people for this duty because of the high turnover at many insurance companies these days. If your payer contact is replaced and your practice representative is new and inexperienced as well, this is a recipe for disaster.
1. Regularly send your staff to attend courses on the nitty-gritty of insurance and managing payer agreements. Also, designate an individual—such as a practice manager or a practice physician—to whom the staff can turn if they have an insurance-related question or problem.
2. Be sure you have a signed original of all your executed agreements; many payers “forget” to supply them. Direct your staff to keep your insurance contract files in good order so that agreements can be found when the need arises. File ancillary information—such as contract amendments or fee schedules for unusual procedures—with the agreements.
3. Load the fee schedules into your computerized practice management system. Whenever you receive a new schedule, update the database. This permits you to investigate when actual payments received from the payer differ from anticipated payments. You may find that an appeal is appropriate or that the payer has unilaterally altered its payment schedule.
4. Document your payer contracts on a spreadsheet. For each contract, note the execution and termination dates; the date when notice of intent to terminate or renew must be given to the payer; the basis and/or methodology of calculating payments, and other important information.
5. Include key phone numbers and Web sites relating to issues such as eligibility, claims status and appeals on the spreadsheet. Keep the information up-to-date and available to staff persons who use it.
6. Develop a 12-month rolling calendar for your payer agreements. Every three months, delete the quarter that has just passed and add one for the same period in the next year. Indicate important deadlines and dates (such as date of termination and date of notice of intent to continue or terminate). At least three months before a decision must be made to renew or terminate an agreement, make a note to start reviewing the agreement.
7. Develop a list of negotiable issues for each agreement. Typically, these will relate to contract clauses. Ideally, you should maintain the list by contract so that the numbers on the list correspond to the contract clause numbers. For a list of contract clauses that are frequently the topic of contract negotiations, visit the AAOS online Practice Management Center.
8. For every existing agreement, and for any new agreement you are offered, understand your goals and objectives. These may be: maintaining or improving your payer mix; gaining access to a new group of patients; or experimenting with capitation to see if it works for you. These goals and objectives will determine the result that you seek (or are willing to tolerate) for each negotiating issue that you’ve identified.
9. Try to understand the payer’s goals and objectives, too. Although all payers want to pay out the least amount for the most care by the best doctors, different payers have their own approaches to doing this. In rare cases, some payers are even willing to accept a lower return because they wish to adhere to higher standards.
10. Know how important you are to the payer. Payer agreements can vary greatly depending on how badly the organization wants the doctor or the practice. How important you are depends on your subspecialty, how many other orthopaedists are in your region and how your utilization rate stacks up against theirs. Don’t expect to exert clout if you’re a solo practitioner in an area teeming with orthopaedic mega-groups, if you have a high complication rate, or if your utilization rate is high relative to your colleagues.
11. Know how important the payer agreement is to you. (It typically doesn’t pay to turn up your nose at the area’s largest payer, for instance.) Your practice management system should supply you with a wealth of information about each of your payer agreements, including: total money received relating to the contract over the past 12 months; average reimbursement for your top 50 procedures—including your evaluations and management codes; days outstanding in accounts receivable; payer mix, and so forth.
12. Consider whether you can increase your clout by either formally merging with other physicians or entering into an independent practice association. Beware, however, of legal constraints if the action creates an effective monopoly. Also, because larger groups need to implement and enforce rules and regulations to be effective, you must decide whether you can live with decreased autonomy.
13. Federal law prohibits you from discussing payers’ reimbursements with other practices. You can, however, ask general questions about other medical groups’ experiences with a payer’s reimbursement practices, such as payment promptness and dispute resolution. You can also encourage your state orthopaedic society to conduct a survey to solicit this information. You’re sure to find the answers very useful in contract negotiations.
14. Make a point of meeting with decision makers (as opposed to the functionaries) in the payer organization whenever you can. This will help you to avoid situations in which you come to an agreement with the functionary, only to discover that his or her supervisor won’t “validate” the agreement. Periodic meetings with your payers will also make you more comfortable in negotiating with them when the time comes.
15. Negotiable issues fall into two general categories: those where, when one party benefits, the other party automatically loses (reimbursement); and those where both parties can win if they think about the situation creatively. These latter issues may be more important than they may seem, because if the payer feels it is winning on something (not realizing that you’re also winning), it may be willing to concede on something else. Note: specific payer negotiating strategies will be covered in a future article; one key strategy, however, is to insist that the payer follow common procedural terminology rules as interpreted by the Centers of Medicare and Medicaid Services.
16. Monitor what’s happening with each of your payers on a quarterly basis; monitor problem payers monthly. Note the changes in your payer mix, and the percent of accounts receivable that is more than 90 days old. Look at claims-payment patterns in the current quarter versus previous quarters. Call the payer and follow up in writing if you see a trend emerging that you don’t like or that is counter to the terms of the agreement.
17. Keep files of all your letters to payers and all correspondence you receive from them. Maintain a log of all calls you make to problem payers that aren’t returned, including when and whom you called, and what happened (left voice-mail, person took message). Take notes of every conversation you have with each payer. Even brief notes will help if you need to sue a payer in the future.
18. Don’t hesitate to “play the heavy” if you conclude that you’re being jerked around. If you believe the payer isn’t living up to the terms of the agreement, say so clearly and frequently.
19. Finally, don’t give up if you don’t get what you want on the first try. Keep pushing for information, money, whatever it is that you want, and document that you’re pushing for it. Many payers listen to the squeakiest wheel and ignore the rest. In a worst-case scenario, don’t hesitate to contact your state insurance commissioner. Several recent class action lawsuits have resulted in substantial settlements for providers.
These tips won’t guarantee that you’ll get what you want from every payer every time. They will, however, permit you to manage an important part of your practice and ensure that you’re paid for the care you provide to your patients.
For more information on practice management topics, visit the Academy’s online Practice Management Center. Member log-in is required.
Steven E. Fisher, MBA, is manager of practice management affairs at AAOS. He can be reached at (847) 384-4331 or firstname.lastname@example.org