blueprint for success effectively negotiating third party physician payer agreements session 2 data...
TRANSCRIPT
Blueprint for Success
Effectively Negotiating Third Party Physician
Payer Agreements
Session 2Data AnalysisPreparation
Objectives
By the end of Session 2 participants will be able to:
1. Perform a benchmarking analysis of payer fee schedules using RevolutionSoftware™ to set fee schedule proposals
2. Identify and define patterns in reimbursement to use in an overall negotiation strategy
3. Analyze and benchmark billed charges against an established minimum percentage of Medicare reimbursement to avoid being paid less than any contract rate and to maximize your cash based business
4. Compare any two of your payer fee schedules on a “normalized code” and volume base to benchmark against each other.
5. Learn and use a practical technique for comparing claims’ payments to contracted rates and assess whether or not you are being “under reimbursed”
6. Objectively assess in network versus out of network reimbursement 2
AGENDA
• Preparing for Negotiations: 50% or more of your time is spent here!
• Preparing for Negotiation: doing your homework Data Gathering Benchmarking
Existing Fee Schedule Billed Charges
Analysis Out of Network Modeling
Negotiation Strategy
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1) If we have two CPT codes, 52332 which is paid @80% of Medicare, including patient co-payment, by the payer, at $1600/service and code 99213 which is paid @90% of Medicare, including patient co-payment, by the payer, at $60/service and 52332 is performed 100 times a year and 99213 is performed 1000 times a year,
a)What is the weighted average reimbursement if these are my only two codes?b)What is the average reimbursement?c)Why is it different and which calculation most accurately reflects the reimbursement to my practice?
Question?
Contracts Negotiations Process
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• Escalate to Sr. Level Manager
• Consider Out of Network Option
• Data Analysis• Proposal Letter• Make Initial
Contact with Payer
• Analyze Counter• Negotiate until
agreement is
reached
Phase 1:
Prepare
Phase 2:
Negotiate
Negotiations Completed
Phase 2:
Continue to Negotiate
Phase 3:
Monitor / Re-negotiate
• Monitor Claims• Re-Negotiate
Process – Phase I
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You are here
You are here
•Data Analysis•Proposal Letter•Make Initial Contact with Payer
Phase 1:
Prepare
Proposal Letter
If you don’t know where you are going, any road will get you there. – Lewis Carroll
•A well prepared proposal letter serves as a roadmap for negotiations
– Two Sections
• Letter Body – the narrative that makes the case for your practice’s value to the payer network.
• Fee Schedule Proposal – the result of your analysis that details your requested reimbursement rates for your new fee schedule
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Consider this…
• Practices have about 50%-70%% of their revenues determined by payer allowables on in-network agreements
• Most accept these agreements and are underpaid, by a lot
• Using tools like RevolutionSoftware and analytical techniques can increase revenues
• Great Practice Management will optimize revenue you are entitled to. Great contracts negotiations will create more revenue
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Practice Management Revenue Cycle
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InformationalInformational OperationalOperational
Are my reimbursements maximized? Should I stay in network? Are my contract terms favorable? Are my billed charges high enough?
Are my reimbursements maximized? Should I stay in network? Are my contract terms favorable? Are my billed charges high enough?
DOQ/IT ReportingClinical Patient Trends
Cash Flow Management
DOQ/IT ReportingClinical Patient Trends
Cash Flow Management
SchedulingCoding & Billing,
CollectionsCash Flow
RevolutionSoftware™ Cloud Service
www.revolutionsw.com
Payer Fee Schedule(s)
ChargeMaster
• More profitable contracts• More revenue via Charge Master Adjustment• Better data to negotiate with• Quickly identify patterns in your data to increase revenue• Other options: Out of network
Cloud Service
Benchmarking Payer RatesBenchmarking Payer RatesCompare any two payers, Payer ComparisonsCompare any two payers, Payer ComparisonsContracted rates vs. Actual PaymentsContracted rates vs. Actual PaymentsIn Network vs. Out of Network AnalysisIn Network vs. Out of Network AnalysisBilled Charges AnalysisBilled Charges Analysis
Inputs:
Analysis:
Results:
RevolutionSoftware™ Learning Session
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• How to get data into RevolutionSoftware and Using Benchmarking Reports
• Payer Comparisons Analysis and Claims Analysis
• Business Models (Out of Network and Billed Charges Modelers)
• How to prepare an “Aggregate Payer” to compare your contracted rates across payers to make negotiations decisions
• Fee Schedule Proposal Options
What should we ask for?
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Go back to the payer with a counter proposal:
•E and M up 40%
•Pathology up 30%
•Radiology if below 110%, then up 40% (77014, 77418, 77427)
•All other up 15%, including codes not priced as a PCT of Medicare
•Codes 52000, 55250, and 55700 add $200 for in office based incentive (In addition to the 15% increase proposal)
Note: 52332 left out due to unusually high reimbursement
Two practices merge, Practice A and Practice B, into a new practice, named Practice C.
Prior to the merger, Practice A had an PPO agreement with Payer 1 that paid, in network, $1,000,000 the 12 months just before the merger. Their overall weighted average rate of reimbursement with Payer 1 is 100% of Medicare.
Prior to the merger, Practice B had an in network PPO agreement with Payer 1 that paid $200,000 the 12 months just before the merger. Their overall weighted average rate of reimbursement with Payer 1 is 120% of Medicare.
Practice C has decided to remain in Payer 1’s network, as long as their total group reimbursement with Payer 1 increases in aggregate. After a long and difficult negotiation with Practice C, Payer 1 made a final offer of 108% of Medicare, down 12% from Practice B’s current reimbursement. Assuming that, in the absence of change, revenues will remain constant, should practice C accept this new and final offer from payer 1?
a)Yesb)No And Why?
Question / Scenario…
“Across the board request”
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Appendix A, Fee Proposal
Specific CPT Code Reimbursement: All CPT codes listed in Payer 1 ‘s fee schedule to be reimbursed at the current payer1 fee schedule for practice X plus 30% for year 1. For years 2 and 3, a 5% cost of living increase shall be added to all CPT codes.
Unlisted Codes: 80% of Billed charges
Pathology, Radiology, Imaging Services, Anesthesia Services, Supplies and Medications: during both surgery and post op visits shall be reimbursed at 80% of billed charges.
Implants and high cost supplies: Reimbursed at (Cost + Shipping Cost) + 10%.
“Define your fee schedule”
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Appendix A, Fee Proposal
Specific CPT Code Reimbursement:
CPT Code Payer Allowable Location
36415 $7.20 O 51600 $422.41 O 51700 $197.00 O 51728 $653.34 O 51741 $270.00 O 51784 $450.14 O 51797 $309.99 O 51798 $41.69 O
……
Other Listed Codes: 80% of Billed charges
Unlisted Codes: 80% of Billed charges
Pathology, Radiology, Imaging Services, Anesthesia Services, Supplies and Medications: during both surgery and post op visits shall be reimbursed at 80% of billed charges.
Implants and high cost supplies: Reimbursed at (Cost + Shipping Cost) + 10%.
Why is this important?
• Benchmark payer agreements to other providers and to other agreements that you have with similar code mixes in your locality to:– Determine which payer contracts to renegotiate– Determine which payer contracts to terminate and go out of network– Determine how much to ask for by agreement and by code or specialty groups,
e.g., E and M, Surgeries, Labs etc.
• Compare out of network option vs. in network to maximize profit by agreement
• More out of network revenue by updating your chargemaster to reflect UCR rates Don’t allow yourself to get bitten by the “lesser of” language
MAKE MORE MONEY!
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Summary
• We covered how review and analyze your existing fee schedules to prepare for negotiations
• We covered how to use tools and techniques to flow new revenues into your practices
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Your homework assignment and downloadable documents can be found on the class webpage at
www.healthcents.com/aua
Homework (Go to Link Below)
1. Register for RevolutionSoftware using the promo code AUA1 (If you have not done so yet)
2. Prepare your csv files using the templates on the class webpage (one chargemaster and your payer file(s)
3. Load your data and produce your benchmark report4. Complete and submit the Session 2 quiz from the “Survey
Monkey” e-mails from [email protected]
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Now for a “Steve Special Offer”
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Send [email protected] an email between now and next class, after you load your first payer into RevolutionSoftware, and we will provide advice and counsel, up to ½ hour, about patterns in this data and how to use it in contract(s) negotiations
If you have questions or need help…
• Class schedule/content• Rick Rutherford, CMPE, CHA • Director - Practice Management AUA • Phone: 410-689-3713
• RevolutionSoftware™ Questions• Regina Vasquez, Sr. VP of Accounts – Healthcents, Inc.• Tel: (719) 243-3845• [email protected]
• Healthcents, Inc. Corporate• Susan Charkin, President – Healthcents, Inc.• [email protected]• Steve Selbst, CEO, [email protected]• Healthcents Inc. Tel: (800) 497-4970• www.healthcents.com
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