Physicians and Clinic Managers get so caught up in day-to-day routines that sometimes years pass before they realize the costly oversights they’ve permitted in their managed care contracts. Each of these oversights, left unchecked and unmanaged, have the potential to significantly impact your bottom line.  

The calls we get from physicians, dentists, orthotics and prosthetics providers, and even psychotherapists, labs and medical supply companies, vary from wanting swift and decisive action to improve their contracts or give notice of termination, to other calls that come from providers who signed on the dotted line before reviewing their payor contracts carefully and are now afraid to “rock the boat”.

How can two providers with essentially the same boilerplate contracts react so differently?

Part of the frustration for providers is that they don’t know what they don’t know. Many were never trained what to look for and how to spot the pitfalls that can put them at risk or cost them money. They don’t miss what they never had to begin with.

Sometimes, calls we receive come from doctors on cell phones who just left the doctor’s locker room or cafeteria where the conversation was about what someone else in a competing practice just got by asking for a re-negotiation of terms that had not been visited for several years.

Understanding the language in managed care contracts – even those already in place – can help you determine if certain benefits are worth the risks. And for new contracts, knowing the language can put you in a better position to negotiate. Because unlike government contracts, you can negotiate managed care contracts.

At Mercury Advisory Group, one of the most important tips we share with clients is that any provider can request a contract review any time and most payors will comply.  

See One – Do One – Teach One

Waiting to deal with a problem in managed care is like stepping in quicksand.  Don’t put off a call to a consultant because you are afraid of what it might cost. You should be more afraid if what you might lose if you don’t call for help!

For every day that you allow a bad contract to remain in your portfolio it gets closer to a liability than an asset.  Especially if the contract is causing you to lose money each time you see one of their patients.  For every low-paying patient that takes up an appointment slot, your competitor is getting more money from the higher paying panel member from a different plan that you turned away because the lower-paying plan has overwhelmed your appointment availability.

In our consulting practice, our culture is “See One – Do One – Teach One”.  I also demand that all of our consultants follow ethical principles of cost containment as good stewards of other people’s money. We will review one or more of your managed care contracts and create a payer report card that gives you a rundown of the top 15 managed care key performance indicators (KPIs) that should be reviewed periodically to determine the profitability of each of your contracts.

These include KPIs we list and explain in Payer Report Cards we create. Our Report Cards analyze:

  1. the accuracy of payments they’ve received
  2. the timeliness of the payments received
  3. fee schedules and rate comparisons to other contracts (by volume and impact)
  4. receivables left unpaid and root cause analysis as to why they remain unpaid despite timely payment provisions
  5. medical necessity denials
  6. mandatory write offs
  7. unpaid /unapproved services deemed investigational and experimental
  8. off-label medication or supply /implant denials
  9. denials and appeals frequency
  10. pended claims frequency
  11. overturned denials
  12. market penetration and steerage analyses
  13. private pay revenue performance on patient financial responsibilities by product and market
  14. employer-by-employer analytics for potential disintermediation (direct contracting) strategies
  15. “out of network” strategies

Business group meetingYou and your practice manager will receive a thorough explanation of what we found, why we think it should be addressed, and our suggestions for revision and re-negotiation.  We use technology as a cost containment tool. Whenever possible, we conduct the coaching online as a private webinar for your manager and contracting team. Together with the consultant, you and your team can see the screen with your contract and our annotations on it as we go over what we found, literally the same way you review x-rays with a patient and show them what you ‘ve identified and what it means to their condition.

After one or more of these sessions, we gently transition the analysis and problem identification to a member of your staff. We train them to “Do One”.  With a detailed checklist, we teach them the critical thinking skills necessary to read and analyze a contract. We don’t teach them the law, we teach them how to read for context. We teach them how to ask for clarifications in a non-confrontational way that avoids acrimony, posturing, losing face, and enables information gathering. When they have all the answers, we then teach them “how” to ask for changes and get the changed items documented. We teach them how to perform financial modeling of the changes they get, and how to manage the contract maintenance going forward.

After they are comfortable doing more of the analysis, negotiations and re-negotiations, we teach them how to train their staff to help with contract maintenance, spotting inappropriate refund requests, how to manage and structure arguments for appeals of denied claims, and ultimately, how to train an assistant or backup negotiator. This is especially important if that contract analyst leaves or wants to move up in leadership at your practice so that a successor is trained.

So take time to act now. Don’t let bad contracts cost you opportunities to boost your revenue or get more out of what you are already being paid.

 

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