Have you ever wondered if renegotiating contracts is really worth the time and effort?
Is an increase in payment even possible? Will payers consider changing your contracted rates?
According to The American Medical Association, doctors are working harder and earning less. So much of what physicians’ face in their budgetary shortfalls is directly related to the reimbursements they receive from major insurance companies. When the government issued a sequester in 2012, all Medicare physicians received a 2% pay cut. Now physicians who have not been able to meet the mandated Meaningful Use requirements face an additional 2-4% pay cut. All of this piled onto declining contractual insurance reimbursement rates has led some physicians to see so many patients to make ends meet that they are no longer capable of really providing the excellent care and oversight that their patients deserve.
Are you ready to take charge of your practice?
Are you ready to turn your bottom line green again?
Fee Schedule & Contract Renegotiation
When was the last time you were given a raise? I can almost certainly say it’s probably been a while. Not pursuing a raise in your contracted fee schedules – from your contracted payors – is detrimental to your practice’s bottom line.
As a physician, you have the right to renegotiate a new rate with the insurance carriers in which you are contracted with. Payors will take into account things like your education, years in practice, malpractice history, and how many of their members (patients) you serve. They will also take into account your clinical data. They track every bit of what you do for their members. From the medications you prescribe to the specialists you refer them to. If you’ve been referring them to out-of-network specialists or specialists who charge exponentially more than their peers, you could have a problem renegotiating a new contract.
There are at least twenty (20) steps to take in this process and what are some of those steps?
- Step 1: Locate all of your contracts, provider manuals and fee schedules.
- Step 2: Analyze 1-4 weeks of claim write-offs to determine the following:
- Are the correct amounts being collected per your current contract and fee schedule?
- Is the staff writing off claims that are not subject to contractual discounts?
- Step 3: You must determine the gross collection ratio for each contracted payer.
- Step 4: For each payer, determine if there are any extra costs to doing business with them above and beyond filing a claim and receiving your reimbursements; there are contracts that contain various obligations that a physician must meet, such as abiding by the insurer’s physician manual, providing medical services, and meeting claims filing deadlines, in exchange for payment (these are things you need to know). This would also include staff time to obtain referrals and authorizations, refiling lost claims, researching denials and refiling improperly paid claims, appeals, time lost due to untimely payment and bad debt associated with large deductibles and co-payments imposed by your contracts.
- Step 5: Deduct costs from Step 4 from the collections calculated in Step 3.
- Step 6: Using either gross collection radio or contractual allowances on individual procedures, you will need to put together a report to compare all of your contracts and fee schedules.
- Step 7: Then determine which contracts don’t have acceptable fee schedules and this will be clear after going through the previous 6 steps.
There are many other steps to take and things that need to be done before you contact the payers, to include writing an impactful proposal letter that identifies your practice’s cost-saving measures and outlines the rationale for the requested increase. In such a negotiation, your job is to convince the payer that you offer superior service, above and beyond what other competitors offer. Then follow-up is KEY!
Using an industry leading expert to renegotiate your rates is always best. Navigating insurance contracts is a daunting and time consuming task. Leverage credentialing experts who will immediately evaluate the type of contracts you have and go to work negotiating contracts and fee schedules that are going to increase your bottom line. Even if you’ve failed at negotiating in the past, a credentialing expert can successfully help you negotiate a new contract. Experts will also be very knowledgeable in the appropriate steps to take to start the negotiation process and in writing the proposals to the networks. As always, look for a company who specializes in this type of work and can provide physician references that are current.
Cynthia Young is the CEO of STAT MedCare, LLC. STAT is a U.S.-based, national provider of credentialing, payor enrollment, rate negotiation, and other credentialing related services.