Are you getting paid what you deserve? Visibility into your Payer Contracts Has Never Been So Important

How many times has the question been asked, “Am I getting reimbursed accurately for the services provided?” According to MGMA, 7-11% of all government and commercial claims are underpaid. Additionally, payers deny 5-10% of all claims. Those are staggering numbers that mean most institutions are behind the eight ball prior to submitting the first claim. As we transition from Fee-For-Service to Fee-For-Value, accurate and timely reimbursements are even more important. Combined with the difficulty of collecting from the self-insured and internal processes that can be sub-par, you start to wonder how any institution, large or small, is able to remain solvent. The good news is that visibility into your payer contracts is only a few steps away.

 

Importance of Payer Contract Modeling

Visibility is key to getting paid what you deserve. Too often, revenue cycle leaders will state, “Our payer contracts have been modeled, but I can’t readily get this information from my EHR.” This makes revenue forecasting a significant challenge for many hospitals and practice management groups alike. Payers routinely use incorrect and outdated rates or do not update the negotiated rates at all. They may apply improper discounts, or down code claims inappropriately. Finally, there is always the potential the payer just did not follow their contracted agreement.

In conversation with several Directors of RCM, they not only pointed out the difficulty of retrieving their modeled contracts from the EHR, but also struggled to track their expected reimbursements. Most find it difficult to set up intuitive reports and dashboards in their corresponding EHRs that will meet their needs. Therefore, it is difficult to know where the underpayments and denial trends exist. Without the assurance of accurate data, you don’t know how to negotiate the terms of a new contract.

What can healthcare institutions do to ensure they have the visibility needed into their payer contracts? They can choose an automated tool with complete transparency for payment recovery that will deliver ongoing payment variance reporting and expected reimbursement. The analytics tool should combine the following to be most effective in obtaining accurate reimbursements.

  1. Ongoing payment variance reporting
  2. Revenue and expected reimbursement forecasting
  3. Contract simulation
  4. Analytics for tracking and trending purposes to achieve full RCM optimization

Expected reimbursement and payment variance are synthesized from custom calculators based on each payer’s specific reimbursement rates and terms designed for payment recovery. It combines patient, payer and billing data with claims and the contracted allowable calculations to begin effectively managing the appeals process. When combined with an analytics tool that has complete tracking of data month over month, the institution is going down the right path to achieve full RCM optimization and reduce the negative impact to the bottom line.

 

Measuring and Quantifying Performance

Using a data visualization system, organizations can use the data gathered from these measurements to generate a more comprehensive overview of their current financial performance to include the top commercial payers for their organization. It allows the user to see a high-level overview of payer performance and drill down into each service area within the chart/graph to determine the true root-cause of the issue. By obtaining this data and having it at one’s fingertips, healthcare entities can engage more effectively with payers through the negotiation stage.

From a revenue cycle management standpoint, accurate data is the key to maintaining revenue integrity. Organizations that have the greatest chance of surviving are those that are proactive to change. A revenue cycle team that leverages data effectively will be able to negotiate more favorable rates with the payer and stay ahead of the curve on the path to value-based care.  Therefore, contract modeling is mission critical to the success of a healthcare organization.
 

Get Paid What you Deserve

Contact us now to learn more or meet us at the Becker’s Annual Meeting in Chicago, Booth #1214

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Felice Felser

Written by Felice Felser

Felice Felser is the Vice President of Clinical Informatics at iMedX