Don’t Let Payer Agreements Fall by the Wayside

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  • September 1, 2013
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You’ve mastered contract negotiations, and now it’s time to become educator and watchdog.

By Marcia Brauchler, MPH, CPC, CPC-H, CPC-I, CPHQ
Congratulations! You sailed through the process of negotiating a payer contract. You have an effective date and are in possession (or will soon receive) your final, counter-executed agreement. But if you think your job is done, you aren’t even close.
With contract in hand, you now need to educate your practice on the terms of the agreement and be on the lookout for future dates that require action. This could be your most important role. After all, if the payer never implements your new terms, your negotiations are for naught.
Take these steps to ensure your payer contract produces anticipated benefits for your practice.
Educate Staff
While it’s fresh in your head, summarize the agreement in fewer than two pages, with essential terms identified for all staff. This “cheat sheet” will be the primary reference for all concerned. Ideally, the actual agreement should only need to be referenced for specific details that may require clarification.
For example, your staff needs to be aware of required notice periods in the contract. These periods apply to significant events that may affect the physician network, and gives the health plan time to update its records and directories. For instance, to add a new location or a new, credentialed physician, most health plans require 90 days advanced notice.
In summarizing your agreement:
Consider providing your front desk schedulers and pre-authorization coordinators with a list of payers the practice accepts. We color-code this document and refer to it as a “red light/green light,” so staff can see at a glance which plans the practice accepts (green), which are pending credentialing or an effective date (yellow), and which are non-participating (red).
Provide the same staff with links to the payers’ websites and log-in information to access important patient eligibility and fee schedule information.
Share the effective date of the contract, as well as the new rates for procedure codes, with the billing staff. The chart below shows a format that I’ve found useful for presenting this information.

Monitor Your Contract
Contracts often remain in files and are ignored until something happens (sometimes years down the road). Don’t be caught off guard when a new year or new time period happens in the contract. Mark your calendar with important deadlines, such as when the initial term period ends and when subsequent renewal periods begin. While you can usually terminate a contract at any time without cause, the renewal period is a good time to consider whether the contract has served its intended purpose.
If your agreement’s reimbursement terms are based on Medicare’s fee schedule, you may need to increase your charges in anticipation of a higher or lower allowed amount.
If you have escalators built in for your rates, mark those on the calendar, too, so you know when they take effect.
Always review the reports (explanation of benefits (EOBs) and electronic remittance advices (ERAs)) a health plan provides you with to be certain  your claims are being paid correctly. Make sure you’re within $1 for actual payment, relative to your predicted payment under your agreement. It’s up to you to confirm the new rates were loaded correctly and fix inaccuracies with the contract negotiator (rather than by individual claim appeals).
Reap the Rewards
I hope this series has helped you successfully negotiate your health plan contracts. Remember that your newly-signed contracts are constant works in progress. Stay on top of them and they will serve you well.

Get All the Facts
This is the last installment of this payer contracts series.
To read the complete series, look for these AAPC Cutting Edge articles on
“Start by Gathering Data,” October 2012
“Prepare and Analyze Data,” December 2012
“Create a Health Plan Contract Database,” March 2013
“Write Health Plan Proposal Letters with Value,” May 2013
“Four Strategies to Help You Master Contract Negotiations,” June 2013
“More Strategies to Help You Master Contract Negotiations,” July 2013

Marcia Brauchler, MPH, CPC, CPC-H, CPC-I, CPHQ, is founder and president of Physicians’ Ally, Inc., a healthcare consulting firm and concierge billing company for specialty physician practices. She works with physicians on managed care contracts, reimbursement, and practice administration. Brauchler’s experience includes hospital, health plan, and independent practice association administration. Her firm sells updated HIPAA policies and procedures and online staff training. Brauchler is a published researcher and a frequent public speaker. She is a member of the Denver, Colo., local chapter.

Certified Professional Coder-Payer CPC-P

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