contract management best practices: tips to maximize reimbursement

Copyrighted Material - Any Duplication requires PMMC Approval

Contract Management Best Practices

Tips to Maximize Reimbursement

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Introduction: Kristen B. Wood, CPC

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• Originally from Northeast Ohio, now resides in Charlotte NC

• Certified Professional Coder

• Over 30 years Revenue Cycle, Medical Coding and Billing

Experience

• 9 years Electronic Medical Record and Practice Management

software Project Management, Implementation, and Training

experience of over 100 medical practices Nationwide

• Senior Account Manager at PMMC since 2012


What is a Contract Management System?

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Tools designed to manage all aspects of the Facility or Provider’s

payer reimbursement contracts with the purpose of maximizing

financial performance and minimizing risk.

Designed to calculate reimbursement for individual claims

as well as analyze all posted transactions including

payments, contractual and administrative adjustments.

Using analytical tools, accurately identifies correctly and

incorrectly paid claims as well as provides detailed

analysis of Denials and payer performance.

Allows for modeling of proposed contract reimbursement

changes to aid in negotiations as well as providing

analysis of upcoming payers trends


What causes a ‘sick’ Accounts Receivable?

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• Mystery Contracts

• Registration Errors

• Billing Errors

• Denials

• Government Reimbursement changes

• Payer Tactics

• Poor communication

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.cminstitute.net/articles/print/85608-resisting-the-omnipresent-onslaught&ei=jCBBVaCaDMjGsAWtuoHoAg&bvm=bv.91665533,d.b2w&psig=AFQjCNG0klwBxD_tvojy2uBpwbXWP-RAnw&ust=1430417903652767


Mystery Contracts

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• Do you have an organized method of tracking the effective and

renegotiation date for every one of your Facility’s payer agreements?

• Do you save each contract, addendum, and fee schedule electronically

so all of your Collections team have access?

• Do you have a process for communicating all reimbursement changes

internally as well as to your Contract Management vendor?

• How do you know if the payer changes reimbursement without notifying

you in writing?

• Do you regularly attend payer meetings and Government calls?


Registration - The Front Line

• How does Registration currently verify Insurance plan coverage?

• Are all Insurance cards scanned into your billing system ?

• Correct Secondary plan entry is essential to accurate patient billing

• PPO and HMO pre-authorizations

requirements should be identified

at the time of admission if possible

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Billing Errors

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• Missing or incorrect use of modifiers

• Missing charges & Late Charges

• Posting errors

• Non-covered services

• Bill types

• CCI edits

• Missing Authorizations or Precerts on claims

• All Payers should be set up for Electronic 837 and 835 remits

Do you know what your most common billing errors are ?


When was the last time you performed a Root Cause analysis?

• Electronic Claim Clearinghouse edits- should be reviewed and

corrected daily

• Track medical necessity denials separately from other denials

• Decipher the CAS code and remark code meanings and then

identify payer trends

• Develop relationships with your Insurance payer representatives

• What are your timely filing deadlines for your payers?

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Denied Claims


• Divide Denial Types into a minimum of 3 categories:

Clinical, Administrative, Contractual

1. Clinical- Medical Necessity- make sure you have a process in

place for tracking provider trends as well as payer habits

2. Administrative- Coding and Billing errors should be quantified and

tracked for process improvement

3. Contractual- can be vague and require a call to the payer, should

be researched against your contract to make sure they are

legitimate

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Denied Claims Tracking


Commercial Payer Tactics

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• Silent PPOs

• Length of stay (LOS) underpayments

• Medical necessity denials

• Vague denial and remark codes

• Paying under old rates

• Bundling

• Service denials for outlier accounts


Medicare and Government Reimbursement Changes

• Are you reviewing Government denials and underpayments they

way you should?

• CCR and other CMS quarterly factor updates- are you keeping track

of your Inpatient and Outpatient Cost-to-charge ratio updates? Are

they being paid correctly by your Medicare HMOs?

• State Medicaid reimbursements- many recent changes that HMOs

have not kept up with= recovery opportunities for denied LOS,

Transfers, ER services, Observation, and outlier thresholds

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ICD-10

• CMS predicts that claim error rates will

be more than two times higher with

ICD-10

• *ICD-9 averages 3% error rate

• *ICD-10 could reach 6-10% increase

• *Time to correct will take longer with

ICD-10 causing a coding backlog.

• *Billers will have to refer to the

physician, nurse and/or clinical

documentation

• *Could take up to 18 minutes longer to

code a claim

How will the ICD-10

Transition (and later,

the ICD-11 Transition)

Impact your cash flow?

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Managing Your Accounts Receivable

• Do you know who your “problem payers” are?

• What billing and payment posting habits are delaying payments?

• Do you have accurate calculations of what your payers actually owe

you?


Contract Modeling for New Contract Negotiations

• Negotiate from a position

of power

• Empowers you with

information on how proposed

reimbursement changes will

impact your financial bottom

line- ahead of time

• IP and OP proposed rate

changes

• Proposed carve outs

• Outlier calculation changes

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Contract Modeling

Challenge:

• 32 different commercial payers

• Contract reimbursements shifting

towards value-based

• Complex coding and terms

• Projections using tools like Access and

Excel are manual and inaccurate

Solution:

• Targeted top five commercial payers to

model proposed terms

• Saved $3.7 million in otherwise lost

reimbursements “This allows us to go into new

negotiations with the utmost

confidence.”

- Adena Health System

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http://www.pmmconline.com/images/pdf/adenahealthcasestudy.pdf


Contract Modeling to Prepare for Industry Changes

• Never be caught by

surprise again

• Enables you to model industry

changes as well as

reimbursement methodology

changes before they go into

effect so you can prepare

• State Medicaids moving to

APR-DRG reimbursement

methodology

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What Monthly Reports Should I Use?

• Recovery Productivity

• Underpayment and Denial Recovery Collection reports

• Claim Inventory and A/R Reports

• Slow pay and unpaid claims analysis

• Overpayments

• Denial Trend reporting


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Quarterly Analytics

• ICD analysis

• Payer scorecard and Financial performance

• Denial Trending

• Variance Assessment

• Cost Reporting

• Accuracy Reporting


7 Things to Do Now

1. Meet with your Collections team and determine areas of improvement: Do you have

the resources that you need to work all of your Denials and underpaid claims?

2. Meet with your Management Team: Registration, HIM, Coding managers, Billing

office, and Collections department to create a list of the most urgent issues that

need addressing

3. Make sure you know what your biggest payers are as well as the most common

reasons for denials

4. Do you know when your last Charge Master review occurred?

5. Make sure you and your vendor are actively participating in ICD 10 testing

6. Make sure you assess all electronic processes that affect Reimbursement and make

automation a priority

7. Meet with your Contract Management vendor to discuss reporting needs

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Thank You!

Contact Info:

Kristen Wood

[email protected] 704-944-3082

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Questions?

mailto:[email protected]

contract management best practices: tips to maximize reimbursement

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