Do's and Don'ts for Managed Care Contracts
By Delly Parham, AS, CPC-A
Government and insurance regulations, reductions and turnover in staff, and the day-to-day headaches of running an office leave us with little time to monitor our insurance contracts and the rates insurers pay. But failing to review your reimbursements could lead to huge losses. Here are a few tips to avoid financial losses, disgruntled patients, and negative cash flow:
- Review all of your managed care contracts. Look for items such as:
- The name on the contract, especially if your physicians change name of practice, location, group, etc.
- Specialties listed
- Covered services
- Services requiring authorization
- Non-covered services
- Timely filing limits
- Participation by all physicians
- Non-physician practitioners’ requirements for practice and reimbursement
- Most importantly, the rates of reimbursement
- Keep a spreadsheet with all of your managed care insurance contracts, rates of reimbursement, contact persons, and product lines (e.g., Aetna – HMO, PPO).
- Keep a copy of all managed care contracts.
Implement an annual review of reimbursement rates to make sure they have not changed. You may be surprised (especially if you are a new practice manager) that your practice has not updated its reimbursement rates since signing the contract. For instance, some of your contracts may include rates based on 1999 Medicare reimbursement rates. When this happens, you may want to renegotiate or renew the contract with current rates. You will save your practice a lot of hassle by updating the language in the contract to specify the “current year’s Medicare rates,” instead of citing a particular year. Designate a person to randomly check whether the carriers are reimbursing at the negotiated rates, and to monitor any changes of the insurance carriers at least annually.
When you initially enter into a contract and negotiate or renegotiate reimbursement rates with managed care insurance carriers, keep an eye on the rates the insurance carriers placed in the contract. Always negotiate rates at or above Medicare’s prevailing rates for the current year.