Practice Management Alert

Count these little-known costs before you drop an insurance carrier Cutting off ties with a particular insurance carrier can mean forfeiting long-term profits if you haven't done your research.
 
"Proceed with caution," says Joan Elfeld, CPC, president of Medical Practice Support Services Inc. in Denver. Disenrolling from a payer is "a huge homework assignment," she says, and you need to look into how it will affect every aspect of the care you give, the other providers you work with, and the facilities you use. Look at the Numbers First Before you sever your relationship with a carrier, you should do two things: 
 
 Analyze your patient base to determine how many patients you could lose if you opt out of their insurance. Even if the patient percentage is very low, remember that people change insurance companies all the time.
 
Demographic research may lead you to think it's OK to opt out of a certain carrier because it is a payer for only a small percent of your patient base. However, "you never know when that's going to switch around, and then you're shutting yourself off from all those current and potential patients," Elfeld says. If one or two large employers in your area switch carriers, your practice could suddenly be out-of-network in a big way.

 Root out the source of the troubles you're having with a problem payer. If reimbursement is too low, you can try to renegotiate your contract or get some carve-outs so that the fee schedule is below your costs. It's a good idea to first do "a full cost analysis" of your practice so you clearly understand what each procedure and service is costing you, Elfeld says. This way you can go to your problem payer armed with the evidence that will convince it to renegotiate.

If you think the payer is simply being too difficult, first direct your attention to your own office staff. All too often, Elfeld says, problems with a payer can be cleared up with better coding-and-billing staff training. Talking to a payer's provider relations representative can also help. 
 
Even if a payer is difficult, Elfeld says, you should focus on training staff how to handle difficult insurance companies.
  
One more hidden cost to think about: Depending on what type of practice you have, dropping an insurance carrier can limit referrals from physicians who have patients with that insurance. Steer clear of diminishing your relationship with your referring doctors.     If You Do Opt Out Your practice may weigh its options and decide that opting out is best. If so, make sure you inform your patients promptly. 
 
"As soon as we knew we were going to do this, we let our current patients with that insurance [...]