|
|
|
|
|
Increase Reimbursement and Negotiate Favorable Contracts
Today, in order for groups to retain and recruit, they need to maintain competitive income levels. We have seen hospital- based groups terminate their relationships with hospitals because they could not recruit enough staff. Once the shortage within the group reaches a critical point, it has trouble recruiting new physicians because of the dangerously high workloads and diminished leisure time. Due in part to this shortage, market forces are pushing up payment levels for physician services. With the current market conditions, there is no better time to renegotiate your managed care contracts.
One of the key statistics you should be tracking within your practice is the average payment per procedure (average monthly net cash receipts/ average monthly procedure count). To increase compensation, you need to be paid more for each procedure performed. Even though the volume of your practice is going up, if the average payment per procedure is flat or going down, you are on a financial treadmill. If the average payment per procedure has increased only slightly (1 to 3%), this is probably due to a shift to more expensive modalities within the practice, a good sign but not the answer.You can verify if this is your case by comparing your average charge per procedure (after factoring any fee schedule changes) to your average payment per procedure. If the average payment per procedure is increasing at an equal or, preferably, higher percentage rate than your average charge per procedure, you are making progress.
What you want is for the average payment per procedure to increase because of better reimbursement for each case you read. Before a group embarks on renegotiation of its managed care contracts, the local and regional markets will need to be assessed for both reimbursements and competition. After an assessment of the market, the group will need to determine the political aspects of opening up contracts. For example, what does the group's hospital contract say regarding managed care participation? (In our negotiations on behalf of our groups for professional services contracts with hospitals, we insist on best efforts language to allow renegotiation with managed care.) How will the medical staff react? Finally, what are the revenue goals of the group to allow for the recruitment and retention of high quality physicians? With these and other issues evaluated, a contracting strategy is developed, which leads to the tactical implementation. This is how and when contracts will be opened. Which carrier should be negotiated first? How involved should the hospital be? What, if any, external communications should be developed and released? Should management meet with major employers in the region to make sure the group's story is told? With a thoughtfully prepared plan, a group can make significant improvements in overall contracts with managed care.
CMPM has been very successful in developing and implementing a contracting strategy for its groups. With its management expertise, CMPM has successfully taken groups through the entire process delineated above. Without fail, CMPM has been able to gain significant increases in all markets with all carriers in which it has a client relationship. But the work does not stop after the first round of successful contracts. This entire process is very dynamic in that the market is constantly changing. This market and contract evaluation should be ongoing with subtle and perhaps not so subtle changes to the strategy and contract expectations.
In some cases, the contract language negotiated can be more important than the fee schedule. It does little good to obtain a healthy percentage increase in fees while denials (or just lost claims) increase at the same or higher rate. Both language and rates need to be effectively addressed in any new contract.
Along with reimbursement increases,contract language should also be reevaluated. One-sided clauses and unreasonable restraints placed on the physician should be eliminated. The following warrant attention:
Verify that there are no precertification requirements. This is a deal-breaker since the hospital-based physician practice has no way to verify precertification of the exam.
Verify that the MCO has the ability to assign only the payment mechanism and not payment responsibility. Be careful with most-favored nation clauses. They can be a double-edged sword.
Delete complex product provisions in which the MCO can sell the network but the practice cannot determine who is to pay or how much is to be paid.
Verify that language clearly provides the physician practice with remedies to recover monies for denied claims.
Add language to the contract that requires the MCO to properly list your group in their provider directory and notes how often it will be updated.
Demand a full rate schedule for payment compliance. Proper payment compliance cannot be achieved with an abbreviated schedule. Get a complete list of all denial codes. You need a full schedule for contract compliance and denial evaluation. Incorporate contract language that prohibits payment for physician services to any other specialty.
Eliminate unilateral change provisions and decision making for the MCO.
In addition to the dramatic increases in reimbursement obtained for its groups, CMPM's real success has been in the unprecedented changes secured in the managed care contract language. These changes have effectively eliminated the hidden discount managed care companies have taken in the use of denials and other methods of nonpayment. With the proper contracting strategy and the expertise needed to review and negotiate managed care contracts, your group will be appropriately paid and the group will have the financial wherewithal to recruit and retain high quality physicians.
© 2006 Comprehensive Medical Practice Management, Inc. All rights reserved.
|
|
|
|
|
