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April 3, 2013

 

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The "Four C's" of Revenue Cycle Management (RCM):  The Second “C”: Contracts (& Credentialing)

 

 

Doctors, practices and other healthcare providers often don’t know exactly what to look for in payer contracts.  Just accepting a contract as presented by a payer without review, ignoring important negotiable items, and neglecting to check that standard items are present in the contract can result in significantly lower revenue and potentially, other negative consequences.

 

What is negotiable in payer and provider contracts?  What’s “standard?”  What contract clauses should physicians especially look for?  How do you know a contract is fair?

 

Just like any business agreement, some things are negotiable in a payer contract and some aren’t.  It’s important to know which is which and to spend time negotiating the parts you can and reviewing the “industry standard” items that aren’t open for negotiation.

 

A complete “Contracts” process includes taking several steps, such as:

  • Gaining an understanding of the kinds of skills required to negotiate with a professional negotiator and deciding whether to negotiate payer contracts yourself or use your own professional consultant or attorney. 
  • Setting up a schedule of all your payer contracts and when they should be reviewed and negotiated or renegotiated (several weeks prior to a renewal or roll-over date).
  • Researching and producing a schedule of what you charge and your current contracted rates can help set a baseline for negotiating future contracts.  Providing for and scheduling ongoing contract compliance reviews and credentialing tasks.

Where to start?  Contracts Review

A good starting place for the overall process is a review of your existing payer contracts.  Whether you do this yourself or hire an attorney or other contracts expert, knowing what to look for is key to conducting a thorough review.  In this edition of the Minute, we have just enough space to list the critical items identified by PBN’s Manager of Credentialing and Contracting, Jonas Heinrich, as areas he is careful to review for PBN clients.  For a more complete discussion, see the PBN white paper Reviewing Payer Contracts available on the PBN website.

 

Non-negotiable things to check for . . .

  • Termination Clause and Sub-clauses. 
  • Termination without Cause. 
  • Rates.  Some are “standard” rates and not negotiable.

Negotiable clauses. . .

  • Rates.  Some may be negotiable or may be hidden within a contract appendix or by referral to a separate agreement requiring review or negotiation out of the contract, including:
  • “Silent” plans and rates. 
  • Out of network or hidden rate plans.
  • Contract conflicts.
  • Length of Contract.
  • Annual Escalators or COLAs.
  • Allowable Recoupment Period.
  • Timely Filing (sometimes appears under Claim Submission).
  • Balance the claim filing period (e.g., so both payer and medical practice have 180 days),
  • Clarify exactly when the filing clock starts ticking (from when the medical procedure occurred or from the billing date, for example), and to
  • Delineate when time limitations may not apply (in cases of payer error, for example).
  • Medical Malpractice Limitations.
  • Auto-Renewals. 

How Contracts fit in with the other C’s . . .

Credentialing and contracting have the most direct and clear effect on overall revenue cycle management performance and collections.  When interviewed for this article, PBN’s JonasHeinrich, Manager of Credentialing and Contracting commented, “Physicians who ‘get it’  . . . who understand the importance of staying on top of contract negotiation and monitoring payer enrollment  . . . will typically make more in true revenue than the ones who don’t.”

 

What’s next?

If you haven’t been careful about reviewing contracts in the past, an initial review will probably yield some eye opening  elements about your current contracts.   Next steps should include scheduling times to review and renegotiate terms and rates with payers, following through with contract compliance reviews, completing ongoing credentialing tasks, and more.  If you don’t have the resources or don’t want to pay for them in-house, seeking a third party practice management consultant like PBN can help. 
 

  . . . PBN is here to help.  Contact PBN Business Development, 800.288.4901 or .

All content © 2013 Physicians Business Network | 8900 Indian Creek Parkway, Suite 500 
Overland Park, KS 66210 | 800.288.4901 | pbnmed.com

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 Getting Real about SGR Payment Reform . . .

We’ve used The PBN Minute to inform our readers of many healthcare issues and trends over the last (can it be?) four years.  Over that time the single issue we’ve reported on most is the ongoing threat of Sustainable Growth Rate (SGR) payment reductions for physicians who provide services under Medicare.

 

Since the SGR legislation was passed in 1997 as part of a deficit reduction law, Congress has modified or delayed implementation of physician payment reductions at least eight separate times.  Physician payment under Medicare has also been an integral part of the last few episodes of major political wrangling in the U.S., including the “Fiscal Cliff” fiasco and the recent debate about “Sequestration” and related cuts.

 

Most recently House Ways and Means Committee Chairman Dave Camp (R-MI) announced his committee’s intention to make resolving the SGR payment issue a reality in the near future.

 

The full outline of the plan includes fully repealing the current SGR and replacing it with a payment model in line with the spirit of the Patient Protection and Affordable Care Act (PPACA), including an emphasis on moving away from the fee-for-service (FFS) payment model and toward a value-based model.  It also calls for “Independent Payment Advisory Board (IPAB) reform” sometime in the future as a “complementary reform” and doesn’t explain exactly how the committee’s plan would work in concert (or opposition) to the efforts of the PPACA-mandated IPAB committee.   

 

Could this portend the end of the SGR debacle?  Moving forward with this legislation would have been a fine way to celebrate National Doctor’s Day last week .


 

 

 

. . . and as always, if you have questions or need help, give us a call.  We can help.

 

 

 

 

 

— Jud

 

Jud Neal, PBN President & CEO

P.S.  Occasionally some noteworthy event is accomplished that’s of general interest to our readers.  Earlier this year, I accepted the position of Board President of our national trade association, the Healthcare Billing and Management Association  (HBMA) as part of my ongoing involvement with that organization and as part of PBN’s commitment to represent our clients’ interests on a national level.  You can read more about the HBMA and my plans and goals for the next year in the full press release.

 

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