payer contracts Archives - Capko & Morgan

When business problems trigger emotions, facts and data are paramount

It's a fact of medical practice management life that unilateral decisions by other organizations can show up out of the blue and negatively affect the practice business, such as when a payer changes reimbursement terms or stops paying for a code that was previously reimbursed. In situations like these, practices have no obvious short-term option but to accept the decree or perhaps vow (through gritted teeth) to drop the payer at the next opportunity. These episodes can be understandably frustrating, even downright infuriating. Sometimes, though, the emotions triggered have the potential to turn a third party's adverse decision into an even more harmful one you make yourself, if you're not careful to take a breath and evaluate all the data you can get your hands on before responding. A recent case in point: a client of ours found that Medicare had suddenly decided that a particular CPT code for administration of a biologic drug was inappropriate and could no longer be billed for that purpose; the substitute code pays only about 20% of the one the practice (and others across the country) had been using for several years. At the same time, a national health plan that is the practice's top payer announced that it will continue to pay the higher-value code, but will only permit one use per patient per day. This is a problem for the practice because the medication in question often has to be administered twice during a single treatment, and each administration requires that the medication be individually mixed and prepped. The practice has found this therapy to be increasingly important and beneficial to a growing proportion of its patients. More staff time has been allocated to it as demand for it has climbed steadily over the past few years. Because of this, these unhappy reimbursement surprises sparked a strong reaction from the physician owner and his practice manager. With respect to their national payer, they were all-but-ready to drop the plan entirely."If we can't bill twice when we administer two shots," the manager was immediately certain, "we'll lose money! We're going to have to

By Morgan|2022-01-01T22:51:55-08:00October 29th, 2016|

The legal risks of waiving copays are very, very real

Effectively collecting copays (or coinsurance for procedures) has become much more important in recent years. One reason is that they've become a bigger proportion of total reimbursement. Once just a token $5 or $10 payment, office visit copays have increased to $30, $40, or even $60 in many cases. They now often account for a third or more of the revenue your practice can receive for these services. Not collecting them reliably is a threat to your profitability. Besides ensuring full reimbursement, there's another, equally compelling reason for your practice to master time-of-service copay collections: Your payer contracts almost certainly require it. If you've been in the habit of waiving copays or billing for them, you are probably violating these agreements. Health plans view copays differently than you probably do. Copays are not just a way to reduce their portion of your fees; they're designed to discourage patients from receiving services they don't need. Copays are supposed to help keep patients on the side of the payer in the battle to reduce costs. That's why your contracts will usually state that you agree to collect them, and often further state you should do so at the time of service. (Some waivers may be allowable, but only when certain hardship conditions are verified.) Contracts also often contain language about the plan being entitled to the same discounts you give other parties -- so that if you give the patient a discount by waiving any amount they owe, you need to give the plan the same discount. (This might mean you owe the plan 100% off if you waived a patient's full copay!) For these reasons, routinely waiving copays can lead to serious problems in the event your practice is audited. If your practice frequently waives these payments -- or if some of your clinicians choose to -- it's important to get everyone up to speed on why you need to collect as you've agreed to in your contracts. I've written quite a few papers recently on front office technology that can help you collect more easily and reliably, while keeping the focus

By Morgan|2022-01-01T22:51:56-08:00April 29th, 2016|

How empowered is your medical billing service?

Outsourcing your medical billing to a billing service has the power to make your practice much easier to manage. It can also increase your profitability. But as the world of reimbursement continues to evolve, it's important to stay involved with the process. If you've adopted a "that's off my plate now" approach to using a medical billing service, it's possible your service is too empowered. A properly utilized medical billing service will be an extension of your team. Your office staff must work well with them in order to maximize the benefit you gain from outsourcing. When everything billing-related is dropped into the billing service's lap, it's impossible for them to do their best work for you. And they may feel compelled to make decisions for you that they really shouldn't be taking on unilaterally. Here are a few examples we've seen over the past few years of billing services believing it was left up to them to make key decisions on behalf of practice clients -- leading to sub-optimal decisions as a result: A billing service for a primary care/infectious disease practice with predominantly older patients with multiple chronic conditions received documentation about the chronic care management (CCM) reimbursement opportunity from the CMS (i.e., code 99490). But the billing service already had trouble getting properly prepared claims and sufficient documentation from providers, even for office visits. Plus, the practice manager was inexperienced with billing, and typically deflected the service's questions with "you decide - that's your job." The service owner decided for the practice that pursuing CCM "wasn't worthwhile." She felt that the providers wouldn't have been willing to do additional documentation. The physician owner was unaware that the practice was likely leaving at least $120,000 of revenue on the table in 2015 -- revenue which could have helped the practice repair its difficult financial position; A pediatric practice assumed its billing service would "handle" all payer contracts. The billing service thought "handling" them meant simply dealing with information requests from payers, and alerting the practice when something needed to be done -- they certainly didn't expect to be negotiating new contracts, since that was far

By Morgan|2022-01-01T22:51:59-08:00October 11th, 2015|

Small can be strong when negotiating with a payer

Many physicians we work with face the tough decision of whether to keep their practices independent or join a larger organization. Oftentimes, physicians and practice managers believe they must consider such a move to "gain a larger footprint" for negotiations with payers. The advantages of larger groups in payer contract negotiations versus small and solo practices are generally accepted. But should we assume larger groups automatically have an edge? Negotiating power can come from different factors. The most basic is having something the other side wants (or, ideally, needs). But it can also come from not wanting what the other side offers too much (i.e., being able to walk away). It can come from having something to offer that is better than alternatives. It can also come from the ability to be flexible. Bigger groups may give payers a convenient way to negotiate rates for a larger geographic area in one deal -- a plus the payer will appreciate. The group may be empowered to push for a higher rate for all providers in it -- and it might work. And the payer may feel it must deal with this large group, without the option to walk away, because it needs the coverage it provides. But the group will also likely be less willing to walk away in the face of a deal it perceives to be poor, because the negotiators have to represent the interests of everyone. The fact that neither side can easily walk away takes away some of the leverage that more size might otherwise provide. On the other hand, if a smaller practice has special qualities that a payer might value -- say, specialty coverage in an under-served area, or newer services that are rare in their market -- the payer might be willing to pay more, at least for certain codes, for that small practice. But that could be less likely if that small team is part of a larger group negotiating rates across multiple markets. Similarly, if a small group of physicians scores well on a health plan's internal quality measures, or if patients

By Morgan|2016-03-04T11:32:52-08:00April 16th, 2015|

Remember, EFT is best

Mary Pat Whaley at Manage My Practice has posted great information about payers 'encouraging' practices to accept payment by virtual credit card, instead of by check or EFT. This method of payment is not a good deal for practices. Merchant fees are deducted from credit card payments -- meaning a further reduction in the reimbursement received from health plans that use this credit card method. Additionally, it adds costs because the virtual cards have to be manually keyed (increasing potential for errors and hassles -- and usually meaning a higher merchant fee than a swiped transaction as well). If the credit cards are set aside to be keyed in batches (as it seems they would inevitably be in many busy practices), that introduces another delay in receiving payment that would already be in the bank if transmitted by EFT. And, as the AMA pointed out in its letter to the CMS objecting to the use of virtual cards for VA reimbursement, credit card remittance advices are not standardized as payer EFT remittances are -- another source of inefficiency and cost. EFT is still the best way for practices to receive payments quickly, without any extra fee deductions, and without requiring additional, costly staff handling. (Minimizing staff handling also reduces embezzlement risk.) All payers are required to meet federal standards for EFT in 2014 -- and that means that you can request EFT from any payer you work with. As you know, we always recommend that practices use EFT with every payer: no checks in the office means less chance of one 'disappearing,' less aggravation taking them to the bank, etc. Virtual credit card payments are just one more inferior alternative to EFT. As Mary Pat noted in her post, it's important to check any new contract you sign to be sure you're not inadvertently agreeing to credit card reimbursement. (And, as we're always reminding you, this is another reason for a tickler to review your contracts annually, to be sure they don't already contain language that allows changing reimbursement mechanisms. And watch those amendments and other mailings from plans, too!)

By Morgan|2022-01-01T22:52:12-08:00November 11th, 2013|

Medicare Advantage plans dropping doctors: what does it mean?

News reports have been trickling in over the past couple of weeks -- growing in number -- about Medicare Advantage (MA) plans dropping doctors. First, we heard about UnitedHealthcare in CT dropping doctors -- then news came out about the same carrier dropping patients in NY, FL, RI, NJ, and, just yesterday, OH. Sam Unterricht, MD, the head of the State Medical Society of New York, said in a Fox Business interview a few days ago that other plans like Empire Blue Cross and Emblem were following UHC's lead in his state -- and that he expects this MA plan activity to spread nationwide. What's driving this (by all accounts, extremely sudden) behavior on the part of MA plans? The Tampa Bay Times reports that UHC attributes it to quality ratings ("[providers that] demonstrate the highest quality at the greatest value will be rewarded for their efforts.") But, the effort to trim MA costs as part of the funding plan for the ACA probably plays a role. Unterricth said that one of the plan representatives he spoke with said that an anticipated 8% reduction in reimbursements to MA plans from Medicare as part of the ACA was at least partly behind all the physician cuts. The timing -- coming on the heels of news of thousands of patients dropped from individual health plans -- does suggest a connection to ACA-mandated changes in 2014. Certainly, UHC's statement that quality ratings drove the decisions isn't incompatible with Unterricht's view that ACA cuts to MA reimbursement were behind them. After all, if reimbursements to MA plans from the CMS are going to decline, then quality related bonuses are going to be that much more important to plans going forward. It makes sense that they would try to goose their rankings to make up lost ground on reimbursements through bonuses. What does this mean for practices that serve MA patients? Some practices in some markets might have argued that MA is a pain: it's like the restricted, non-negotiable reimbursement of Medicare combined with the hassles of dealing with a private payer. But, we suspect

By Morgan|2022-01-01T22:52:13-08:00November 5th, 2013|

New exchange plans will make time-of-service collections even more important

(c) John Kwan - Fotolia.com The AMA's National Health Insurer Report Card for 2013 provided powerful reinforcement for the need for physician practices to master time-of-service collections: average patient responsibility is now topping 20% for all but one payer evaluated in the survey, and some were approaching 30%. Even Medicare is requiring patients to contribute about 25% of the cost of their care. Now the unveiling of the health exchange plans in some states, including here in California, underscores the point further. All of the new Covered California plans include cost-sharing to keep premiums affordable, including copays for all visits except the annual wellness exam. Modern Healthcare reports that other state plans that have been revealed also feature significant patient responsibility. For people new to purchasing insurance and using it to gain access to care, the patient responsibility portion to providers (on top of premiums they may be unused to paying) may come as a surprise and cause confusion. (After all, patient responsibility payments routinely confuse people who've had such plans through their employers for years!) If collecting copays and other patient responsibility payments at the time of service is not SOP at your practice, you're leaving money on the table -- and could soon be giving up even more profit that is due your practice. Plus, if copays are routinely waived or ultimately written off, you're probably violating the terms of your payer contracts -- and, with more new members joining plans that require patient cost-sharing, plans could be expected to be even more attentive to these violations as the exchanges roll out. It's time to finally master front desk collections! (If you need help understanding how well your front desk operation is managing these collections, or with rolling out new procedures, Capko & Company can help with a one-day billing and collections review -- contact us for more information.)

By Morgan|2022-01-01T22:52:18-08:00July 8th, 2013|

13 for 2013 Tip #9: Analyze payer performance

When is the last time you analyzed your practice's payers? Too often, physicians and practice managers feel powerless against health plans -- and don't even question whether to continue to accept a particular plan. Yet, even if your practice is located in a market in which you've found it increasingly difficult to negotiate higher reimbursement, that doesn't mean you must simply accept all other aspects of every payer relationship without question. Even when reimbursement amounts are similar across payers, differences in payer behavior -- what we refer to as 'hassle factors' -- can actually mean that some payer relationships are unprofitable. What are some of the hassle factors that add hidden costs and reduce payer profitability? They include: Consistently slower reimbursement than other plans Repeated requests for referral or authorization Frequent complaints from patients Poor support when help is needed to resolve problems Are multiple hassle factors a reason to drop a plan on their own? Not necessarily -- if you're reliant on a plan for a significant share of your revenue, or it reimburses better than others for important codes, putting up with the hassle may be necessary. (However, in that case, you will also want to do what you can to address some of the ongoing hassles with the payer.) I shared some further tips on analyzing your payers' hassle quotients in this article for Kareo -- and if you need further help evaluating and segmenting your payers, we hope you'll get in touch to learn more about our capabilities in this area.

By Judy Capko|2022-01-01T22:52:35-08:00January 31st, 2013|

13 for 2013 Tip #7: Reach out to local employers

Many medical practices we work with focus their marketing efforts (if they do marketing at all!) on physicians who refer to them and direct communication with their existing patients. Yet there is another marketing channel that can be extremely effective for physicians that is often overlooked: your area's major employers. It's common to assume that simply participating in an employer's health plan is sufficient to reach the potential patients that work there. But, if you're in a competitive area, you might need to differentiate yourself against dozens of other physicians -- personal outreach to employees is a way to help them choose you. Moreover, you can't necessarily count on the health plan to promote itself effectively to your patient base. Many employers will also consider wellness programs in the coming year, because the Affordable Care Act promises to provide financial incentives for qualifying programs by 2014. Practices that create wellness programs for local employers can simultaneously market themselves to employers and prospective patients, provide valuable wellness information and training to their community, and position themselves as key wellness program providers as attention and support for this type of effort grows. (What kinds of programs might qualify? Some possibilities include non-discriminatory diagnostic or health improvement programs like tools for coping with and preventing repetitive strain injuries; healthy weight management; voluntary health screenings.)

By Morgan|2022-01-01T22:52:36-08:00January 24th, 2013|