Sound payer contracts are the foundation of a financially successful practice. Yet, I find that practices don’t always scrutinize this important facet of their financial infrastructure with the tenacity it deserves. I often learn of practices that have signed new or revised contracts without so much as reviewing the terms. Here I outline some best practices to consider when evaluating payer contracts.
 
Negotiate the Terms
Yes, you should try to negotiate the terms. It has been my experience that while most national payers have a take-it-or-leave-it approach, this is not always the case. I’ve found that regional payers tend to be the most amenable to reconsidering terms for reimbursement.   

Regardless of whether the payer is willing to negotiate, a practice has an imperative to scrutinize a payer’s contract to determine if the economics make sense. You may be amenable to lower payments if you are trying to garner market share. Conversely, you may decide against taking on a contract if your schedules are already full.  

Insurance carriers use their own language, and that could cause you to agree to terms that would be unacceptable if the language were more transparent. Here’s an example: “Payer will reimburse Provider for Covered Services at X% of the then prevailing Fee Schedule or X% of the Provider’s billed charges, whichever is less.”

It sounds very official, but when you distill the language, it does not protect the practice should the payer adjust its prevailing fees. This clause also puts the practice in a position of having to ensure its charge master surpasses the payer’s fee schedules.   

Know the Payment And Share It
When payers present our practice with a new or revised contract, I send them a list of our most common CPT Codes and ask for their allowed amounts for each plan they are offering to us. This allows us to evaluate whether the terms are agreeable, and we can use this as a basis to negotiate the rate. A critical step in this evaluation process is to make sure that the practice is made whole on expensive biologic agents.  

Also, some practices do not make the reimbursement terms available to the key staff members who need that information to do their jobs. We’ve created a master spreadsheet that outlines the reimbursement rates for our most common CPT codes and we give copies to our staff. This allows them to effectively, and knowledgeably, provide financial counseling, post payments and calculate cost projections for our patients. Without this information, your staff may be writing off charges to your detriment.  

Watch the Time-lines
Another piece of payer contracts I look at carefully are the time-lines for claims payment. We insist on payment within 30 days of the payer receiving our claim. We try to include these terms whether the payer is primary or secondary.  

Most contracts outline terms for when the practice must submit claims. Most of our contracts require we submit claims within 90 days of the date of service or they will deny them outright. Share these terms with physicians and other providers in your practice who may struggle with timely submission of their charges.    

Special Considerations For Medicare Advantage Plans
Medicare Advantage (MA) plans can ask you to accept less than the Medicare allowed amount, but this becomes a contractual decision between you and the payer. Keep in mind, MA plans must cover all services that traditional Medicare covers. The rule of thumb is that MA plans may not cover lesser benefits.

Some payers require providers  use specialty pharmacies or step therapy before they’ll approve the biologic the doctor prescribes. The contract or provider manuals should outline these terms. Adhering to them will ensure that you are not carelessly using commercially purchased biologics that might not be reimbursed.  

Lastly, know what your contract terms are regarding your obligations to provide access to records and audits. Payer audits are on the rise, and knowing your rights can be instrumental in responding to them.    
Following these steps can make sure you are effectively scrutinizing your payer contracts so you end up with terms are in the best interest of your practice.  RS

Mr. Laurita is chief operating officer at Retina Associates of Cleveland. Ms. Rasmussen is administrator at Rocky Mountain Retina Consultants, a six-office practice in four western states with the main office in Salt Lake City.