You’ve gone to the trouble of establishing an in-network contract with several major payers in the area. You’ve submitted the paperwork and negotiated rates. Your practice’s contact information has been published in the online and print versions of the payers’ in-network provider lists. And now you regularly treat patients who walk in with those payers’ insurance cards.
But once a claim is sent, do you have any idea how much you are actually getting paid? And perhaps even more importantly, are the payers reimbursing you according to the mutually-agreed-upon contractual rates?
According to an MGMA poll from earlier this year, only about 50 percent of respondents said they compare their actual reimbursement to payer contracts at least quarterly. The other 50 percent were unsure how often they do it or don’t do it at all.
So what’s the big deal? Why is important to regularly compare the payments you receive to the contracted payment rates you’ve negotiated? Here are 7 reasons why you should establish a plan for your own practice and begin monitoring your payer payments today.
- To take full advantage of all in-network contracts. Don’t waste the time and headache of payer negotiations by allowing a payer to pay whatever they want anyway. Regularly comparing your actual payments with the negotiated rates is just another function of being an in-network provider.
- To avoid leaving money on the table. Your practice doesn’t choose to participate as an in-network provider with every payer whose members walk through your door because doing so often means accepting lower reimbursement for your services than you would otherwise receive. Don’t further reduce your revenue by leaving money on the table that payers are contractually obligated to pay.
- To identify systemic payer reimbursement issues. Often, payers aren’t intentionally paying below their negotiated rates. Instead, they have a system issue or have failed to incorporate a contract update. Through regular audits, you can identify larger issues to help not only your practice but the entire provider community receive proper payments.
- To help patients take advantage of plan benefits. As you know, insured patients spend a lot of money in premiums to have insurance and often have to get the care they need within very limited networks. Ensuring payers are paying at their negotiated rates means helping patients receive the full coverage they’re paying for.
- To minimize patient billing errors. When payers reimburse you for your services incorrectly, that means you often are attempting to collect the wrong amount in copayments and coinsurance from patients. Everyone knows that collecting patient payments is the bane of the healthcare industry. Don’t create more work for yourself by allowing improper payer reimbursement.
- To avoid unnecessary refunds. Occasionally, payers pay more (not less) than they should. Also, when payers don’t pay correctly, you may collect more than you should from patients. This, of course, creates credit balances and leads to additional work for your billing team or billing company. By identifying incorrect payer payments as early in the revenue cycle as possible, you can correct the issue and avoid unnecessary refunds.
- To help with future contract negotiations. Is a payer particularly problematic for your billing team or billing company because they frequently make payment errors that stray from your contract? Is it hardly worth staying in-network with this payer because of all the additional work? Use that information to your advantage the next time your review and negotiate your contract.
Interested in learning more about how to compare your actual reimbursement with your contracted payment rates? We’d love to talk with you.
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