Managed care payments provide a significant chunk of revenue for many practices, so it’s understandable that most providers think twice and then some before cutting off any payers due to contract issues or other criteria. While practices should ideally strive for an open, collaborative and cooperating mindset when dealing with their payer counterparts, there are times when it’s best for the practice, and staff who must deal with issues by problem payers, to simply walk away and cultivate other sources of revenue.
This blog will highlight some of the key indicators that should warn providers that the time, hassle and money might not be worth keeping the payer – and how to tell the difference.
Lengthy time-frame for credentialing
As many physicians know all too well, there are conflicts inherent with the credentialing processes between practices and many payers. New physicians in a practice can’t treat patients and get paid until the credentialing is completed, causing the practice to lose revenue. The payers, on the other hand, have plenty to gain if they forestall it as long as possible, especially in states where there are no time limits.
Some practice management experts advise practices to raise this issue at the negotiation table, with no renewal signed until a satisfactory agreement on improved behavior from the payer is reached. Some of the better payers allow delegated credentialing, where responsibility for credentialing is turned over to a practice that agrees to follow the provider’s guidelines for verifying medical competency. Streamlining credentialing can help get new physicians up and working faster, giving more patients unbroken access to quality care.
High denial rates with increased accounts receivable
Some of your payers may have a higher denial rate than the others. Denials can hurt your bottom line by making more work for your billing department as well as follow-though. Your operations and A/R should be able to tell you what the first-pass rate denial rates (percentage of denials of initial claims) are for your various payers.
Raising awareness among your operations staff to “flag” payers having a higher than expected denial rate can help get any unresolved denial issues onto the negotiation table. Meanwhile, if you see a pattern to the denials, communicate with payers to uncover the reasons, such as incomplete registration, verification issues or other factors that can be corrected internally.
Unwarranted down-coding
Some payers have been known to deliberately down-code certain types of services, particularly E/M levels. For example, Level 5 services are down-coded to be paid at Level 4 prices, with those at Level 4 getting paid at a Level 3 rate. While this is not a common practice among insurers, when you realize that most Level 4 services (office visit, for new and established patients) are generally paid between 45-55 percent more than Level 3, you will probably agree that payers engaging in this type of outrageous behavior deserve to be called out and terminated.
Excessive authorizations
As you already know, authorizations cost you more time and money, especially with those payers who seem to want authorizations for just about everything. You may want to insist that they prove that your practice really has a higher incidence of a test or procedure to justify their requirements of frequent authorizations.
Negative feedback from your operations and billing/ A/R revenue staff
Your back office billing and A/R staff are perhaps the best, most accurate sources of feedback on payers’ reimbursement track records. They, better than anyone, can tell you what’s working with which payers and what needs to be fixed. Cover diverse areas such as knowledgeable reps, responsiveness to questions, denials, registration, billing, case management and records.
By using tools and templates, such as a “Payer Report Card” to document ratings, you have proof of under-performing payers that can be very useful at renegotiation time. Have your employees and other clinicians rank each payer on a basis from “A” to “F” with a space for adding comments on what was liked or disliked from that employee’s perspective. While admittedly subjective, you will have a record of which companies your employees feel help or hinder the patient care and revenue cycle processes.
Your patient appointment schedule is always full
While this isn’t a warning like the previous points, it is an alert that if your practice is usually booked solid because you have more patients than scheduling time, you may have considerable leverage with any difficult or demanding payers making up five percent or less of your managed care revenues. This is the time to let them know that they need your business more than you need them. Whether the issue with them is a slow credentialing process, high denial rates, or other problems, make those issues their issues.
Summary
Many providers look at the fee schedule and not much else, but payer under-performance can easily offset a good fee schedule. By taking into consideration other factors affecting the provider/ payer relationship, you can decide whether the amount of revenue gained from a given payer is worth the effort and time to meet their requirements, especially if these seem out of line compared to other insurers.
Factors such as payer impact on a practice’s workflow, including responsiveness to new-policy implementation, problems with claims or procedures and whether they permit delegated credentialing all play a role in considering whether to renew or not.
If you’re uncertain how to proceed, you may find consulting with an experienced medical claims billing and practice management service helpful.
Reduce potential payer issues by working with a billing service
M-Scribe has been helping practices of all specialties and sizes since 2002. Our experienced billers and coders using the latest technologies and software compatible with most medical practice systems ensure that your claims meet all payer criteria. We offer numerous practice management resources, including assistance with credentialing, that can save time while enhancing your revenue cycle. Contact us at 770-666-0470 or email to learn more about credentialing and other services.
