As the Boys Scouts can attest to, it’s important to be prepared. This is certainly true when it comes to payer negotiations. The more knowledge and data you bring to the negotiation table, the better prepared you will be to craft a contract that ensures comprehensive and appropriate payment for services.
As a first step in getting ready, you should review a copy of your current payer contract and fee schedule. While it may be difficult to put your hands on these documents—particularly if a payer is hesitant to share the fee schedule—don’t give up. Many states have regulations that require payers to share their fee information with practices. Know your rights and make sure the insurance company follows the regulations. Once you have access to the contract and fee schedule, familiarize yourself with its content and identify any questions you hope to get answered.
A second step involves collecting as much data as you can about your practice’s ongoing relationship with the payer. Generating reports from your practice management system and clearinghouse about days in A/R, A/R>120 and the number of claim rejections and denials can help you develop a clear picture of the relationship. Days in A/R can show how quickly a payer pays claims, and A/R>120 can demonstrate whether claims payment is particularly slow and what types of claims are delayed. A rejection and denial report subdivided by reason can demonstrate patterns of denials that could be addressed during negotiations. For example, if a large percentage of denials is due to eligibility, perhaps there is a problem with the way your practice and the payer communicate about eligibility. This is something that can be addressed at the negotiation table.
A key piece of data that can drive negotiations is the difference between expected claims payment and actual payment. To determine this figure, you need to be able to calculate—based on your claims and the payer’s methodology for calculating the fee schedule—the amount of money you expected to receive for claims. Then run a report for actual payments, and you can easily calculate the difference between the two metrics. Having this information available allows you to ask the payer about any discrepancies and amend the contract to avoid these in the coming year.
One final thought about preparing for payer negotiations: by maintaining a relationship with a payer throughout the year, you can take the sting out of the negotiation process. If you have a designated staff member assigned to each payer, he or she can become familiar with the payers’ approach to payment, detect subtle changes in payer payment patterns and work with the payer to resolve disparities as they surface. This makes it easier come negotiation time because you are already working with the payer to ensure comprehensive, timely and appropriate claims payment.