Stabilize Your Accounts Receivable
- By admin aapc
- In Industry News
- August 1, 2009
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The next step toward concise contract negotiations is using effective communication.
By David Peters, CPC, CPC-P, PCS, CCP-P
Payer/provider contracts can make or break a medical practice. Here are some tips for effective contract negotiation.
Tip 1: Keep Track of Changes
Here’s the scenario: You have the first contract in your hand, and you’re ready to begin its review. If you have a paper copy, arm yourself with colored markers. Use a green highlighter to mark portions with a financial impact. Use a red marker for unacceptable areas to be addressed in your negotiations. Highlight in yellow the sections you don’t fully understand or needing further clarification. If you are reviewing an electronic version of the contract and use Microsoft Word, click the Track Changes button on the Review tab. This will allow you and everyone else who views the document to see any changes you made.
Tip 2: Look Out for Weasel Words
Pay close attention to what attorneys refer to as “weasel words.” Terms such as “will use best efforts” or “will attempt” don’t carry much meaning in a contract. Make sure those areas are addressed and clearly defined.
Tip 3: Make a Checklist for Discussion
Another good tool is a checklist with your particular requirements listed. As you encounter each provision, check them off. Anything on your list not checked should be discussed.
Tip 4: Negotiate With a Smile
Now that you have your discussion checklist ready, what is the best approach for entering into negotiations? The old idiom says it best, “You can catch more flies with honey than with vinegar.” Be professional and non-adversarial. Separate yourself from the issues and weigh each proposal on its own merits.
Make it clear from the beginning what you have the authority to approve and what you’ll need someone higher up to approve.
Who initiated the request for the contract? If it was the payer, they want you in their network and are more apt to bargain than if you requested to be in their network.
Tip 5: Know the Bottom Line
Know your direct costs for office visits and most-commonly billed procedures so you can talk dollars and establish your bottom line. Typical payment methodologies include the following:
- Discounted fee-for-service, where you are paid a percentage of your billed charges (not very common these days)
- Payment based on the Resource-Based Relative Value Scale (RBRVS) unit value, usually expressed as a percentage of Medicare
- Payment based on the insurer’s proprietary fee schedule.
In the final case, you’ll give the insurer a list of the most common CPT® codes you use and they’ll price the codes at their base value. You can then work on percentages of that base value.
Tip 6: Use the Coding Skills You Have
Your coding skills are an asset during contract negotiations. As coders, you have the perspective to think the process through to the end and to be sure the terms you agree on can be executed.
Suppose you work for a small but busy obstetrics practice. Your doctors don’t have their own equipment to perform fetal non-stress tests (NST) (59025 Fetal non-stress test), but use the equipment in the local hospital’s labor and delivery department. It is costly and time-consuming for your physicians to go to the hospital to perform an NST every time a patient shows up with a possible complication. It would be best to negotiate with a payer to reimburse an additional 25 percent over and above the usual rate for an unscheduled NST.
Sounds like good negotiating; however, it prompts questions. How do you suppose you’re going to get that payment? You would bill 59025 with modifier 26 Professional component, with a Place of Service (POS) of 22 Outpatient hospital, but how can you identify this as an unscheduled test versus a scheduled one?
During negotiations is the best time to find out if the payer has a system capable of triggering the higher payment. They might say to bill 59025-26 with a second modifier of ET Emergency Services, or some other coding modification (59025-26-ET). Recognize and resolve potential coding problem areas up front. (Note: This is why we’re never allowed to discuss payer-specific coding rules at seminars and meetings—whatever works out best for both parties usually ends up as how the service is coded, using standard procedures or not.)
Tip 7: Finish the Job
You may think when the contract is in its final revision and it has been signed by both parties at the appropriate level you’re done. Wrong.
Contracts require a little care and feeding. For instance:
- Keep contracts centrally located in your office.
- Create a tickler file for all contracts including termination and anniversary dates and check it monthly to keep it current.
- Make a copy of the payment terms and other pertinent information for your billing staff to ensure claims are billed correctly and correct payment is received.
- If your billing system can be programmed with expected reimbursement, spend the time and money to do so.
- Provide the front desk staff with a current list of what insurances you accept in your office. Nothing will anger a patient quicker than hearing “Sure, we’ll bill your insurance for you,” and then receiving a bill for the visit’s full amount because the physician is out of network. If your front desk and scheduling staff have a list of contracted insurance plans, patients can be forewarned of a higher out-of-pocket expense or minimal coverage for insurance plans not under contract.
David Peters, CPC, CPC-P, PCS, CCP-P, is contracts manager for Sutter Medical Foundation – North Bay, in Santa Rosa, Calif.
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