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CONTRACT NEGOTIATION:
Improve your Practice’s Revenue
1E
1
Marcia Brauchler, MPH CPC, CPC-H, CPC-I, CPHQ
Monday, April 15, 2013
10:30 am to 12:00 pm
All Rights Reserved.
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Objectives
• Get organized for successful payer
contracting negotiations.
• Describe the predictable steps in any
negotiation.
• Employ strategies to monitor your success
once the contract is in effect.
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Look
familiar?
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AGENDA
• Why bother?
• How to Get Started
• Gather data
• Prepare, prepare, prepare
• Begin with the End in Mind
• Negotiation strategies
• Monitor for continued success
• Questions?
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WHY
BOTHER?
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It’s your practice’s paycheck
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You probably have more leverage than you think
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Practices do succeed – if it is given priority:
April 6th: Contract improvement requested with payor
23 different contacts over 4+ months
August 15th: +7% increase (year 1) plus +5% increase (year 2)
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NOTE:
Mandated fee schedules are not negotiable
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The market place is getting smaller – payor consolidation
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Colorado Payors circa 2000 • Aetna • Affordable • Alliance • Anthem BCBS • Antero Health Plan • Beech Street • Colorado Access • Community Care Network
(CCN) • Community Health Plan of the
Rockies (CHPR) • CorVel • Concentra • CIGNA Health Care • CompreCare • Coventry Health Care • First Choice of the Midwest • First Health • GEHA/PPO USA Network
• FOCUS • Great-West • Humana, Inc. • Kaiser • MedRisk • MetLife • Mountain Medical Affiliates
(MMA) • Mutual of Omaha • MultiPlan (Viant) • One Health Plan • PacifiCare • Private Healthcare Systems • Prudential • Rocky Mountain Health Plans • Sloans Lake • Take Care • Western Health Plan • United Healthcare
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Colorado Payors Today • Aetna • Affordable • Alliance • Anthem BCBS • Antero Health Plan • Beech Street • Colorado Access • Community Care Network
(CCN) • Community Health Plan of the
Rockies (CHPR) • CorVel • Concentra • CIGNA Health Care • CompreCare • Coventry Health Care • First Choice of the Midwest • First Health • GEHA/PPO USA Network
• FOCUS • Great-West • Humana, Inc. • Kaiser • MedRisk • MetLife • Mountain Medical Affiliates
(MMA) • Mutual of Omaha • MultiPlan (Viant) • One Health Plan • PacifiCare • Private Healthcare Systems • Prudential • Rocky Mountain Health Plans • Sloans Lake • Take Care • Western Health Plan • United Healthcare
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HOW TO GET
STARTED
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RESOURCES for gathering Payor Data
for Your State:
• HMO: your state’s Department of Insurance
• PPO: proprietary, broker or employer advocacy group
• Medicare Advantage: Medicare beneficiary website
• IPAs/PHOs: hospital websites, under “Payors we Accept”
• Workers’ Compensation Carriers: Department of
Workers’ Compensation
• Auto/Lien Payors: claims adjustor for large insurers, like
State Farm; lawyers with non-insured cases
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Example of
Payors in
Dade County,
Florida:
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http://www.floir.com/siteDocuments/H
MO1Q2012.pdf
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Time commitment to renegotiate a
typical practice’s agreements
• 100 hours
over
• 6 months
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Objectives
• Get organized for successful payer
contracting negotiations.
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GATHER
DATA
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Define your Practice
Productivity by CPT/HCPCS
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ICD-9 Frequency
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Define your Practice
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Define your Practice Fee Schedule
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Define your Payer Experience
Insurance accounts receivable (A/R) aging
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Define your Payer Experience
Clearinghouse reports
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Define your Payer Experience
• Contract allowable exception report
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Srvc
Date
Post
Date Code Description Charges
Expected
Payment
Actual
Payment
8/9/12 8/28/12 99214
Office/OP
Visit, Est.
Patient $197.66 $111.86 $61.50
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Define your Payer Experience Denials reports
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Denial Reason Totals
Diagnosis code incorrect 0 0.00% $-
Ins Req Info From Patient/Clinic 18 5.34% $1,645.50
No Prior Auth/Referral 2 0.59% $48.00
Duplicate claim/service 0 0.00% $-
Procedure code incorrect 0 0.00% $-
Timely limit for filing has expired 0 0.00% $-
Can't ID/ Incorrect ID 1 0.30% $21.00
Procedure Incidental/Bundled to another 226 67.06% $6,087.00
No coverage 56 16.62% $2,842.50
Patient has another insurance 0 0.00% $-
Deductible 0 0.00% $-
Lifetime benefit max has been reached 0 0.00% $-
Co-insurance 0 0.00% $-
Co-payment 0 0.00% $-
Pre-Existing Condition 1 0.30% $21.00
Service not covered/ Not a benefit 33 9.79% $1,395.00
Total Denial Errors: 337 $12,060.00
Voucher Count/Denial Benchmark: 14795 2.28%
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Define your Payer Experience
• Payer mix . . .
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Payor Mix (Example):
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Real-life
Payer Mix
Payor Percent of Business
Auto 1.5%
Charity 0.9%
Comm 6%
Contract 51%
MCD 7%
MCR 16%
MGD MCR 4%
SP 9%
SSA 4%
Tricare 0.2%
WC 0.2%
Total 99.8% 28
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“20% Rule”
• No more than 20% of your total practice managed care revenue should come from a single payor
– Ideal, but usually not reality
• Diversification is protection
– Have an open mind when it comes to new players
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Define your Product Mix
•HMO
•PPO
•Medicare
•Workers
Comp
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Gather your own Patients’
Plan Data
• How?
– Practice Management system
– EOB review
– Front Desk “survey” 31
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Get Payor Online Access
• Find the payor(s) provider sites.
• For example, Aetna, CIGNA and United Health Care:
http://navinet.navime
dix.com/Main.asp
• Why?
32 2ndLt Joshua Larson, USMC, www.defense.gov
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Ancillary Provider Map of
Insurance Plan to Ancillary
Networks
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OptumHealth
Health New England
United Healthcare
Healthways
Aetna
Humana
Kaiser
Principal
Sterling
American Specialty Health
CIGNA
Fallon Community
TUFTS
UniCare
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Determine how your Participation
Agreements are held
–For each physician
–Individually, Group, IPA
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Determine Contracted
Reimbursement Terms
– By product line (HMO, PPO, Medicare Advantage)
– % of RBRVS, Conversion Factors,
Discount off Billed
Here’s how . . .
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Reimbursement terms:
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• Determine if reimbursement is fixed on a given year
of RBRVS
• Consider what components of RBRVS does the
payor utilize
– Geographic adjustment, site of service differential, etc.
• A thought about “Term”
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Disregard payors who say
you can’t negotiate now
• “Term” Section
• Negotiation window . . . Ugh.
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High-Level Summary:
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Gather base year fee schedules
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PREPARE, PREPARE,
PREPARE
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“Payer Resource Manual”
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Client Practice Example
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Pull past utilization by Payer
History is the best predictor of the future
– Example…
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Example of Past Utilization:
CPT Procedure Count Allowed 2011 RBRVS
77334-26 Treatment Device 615 $97.20 $63.14
77300-26 Basic Dosimetry 494 $49.12 $31.85
77427 Weekly Treatment Mgmt 485 $199.18 $182.51
99213 Office Visit 390 $39.66 $49.80
77280-26 Simulation 102 $55.84 $35.71
77263 Treatment Planning 89 $247.64 $163.03
77290-26 Simulation 82 $124.08 $79.69
99205 Office Visit 72 $136.30 $163.52
77315-26 Isodose Plan 52 $124.08 $79.69
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Establish reference point using
Utilization data. . . .
Analyze utilization data in conjunction with current RBRVS
– Example of impact of Utilization data …
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Pure Average:
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CPT Procedure Allowed Proposed Change
77334-26 Treatment Device $97.20 $66.35 68%
77300-26 Basic Dosimetry $49.12 $33.36 68%
77427 Weekly Treatment Mgmt $199.18 $206.69 104%
99213 Office Visit $39.66 $51.39 130%
77280-26 Simulation $55.84 $37.59 67%
77263 Treatment Planning $247.64 $172.57 70%
77290-26 Simulation $124.08 $83.60 67%
99205 Office Visit $136.30 $169.11 124%
77315-26 Isodose Plan $124.08 $83.60 67%
85%
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Weighted Average:
47
CPT Procedure Count Proposed Wtd Impact
77334-26 Treatment Device 615 $66.35 16%
77300-26 Basic Dosimetry 494 $33.36 13%
77427 Weekly Treatment Mgmt 485 $206.69 19%
99213 Office Visit 390 $51.39 19%
77280-26 Simulation 102 $37.59 3%
77263 Treatment Planning 89 $172.57 2%
77290-26 Simulation 82 $83.60 2%
99205 Office Visit 72 $169.11 3%
77315-26 Isodose Plan 52 $83.60 1%
2381 78%
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Establish a reference point
• Determine financial outcome
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Current 1st
Payor
Offer
2nd
Payor
Offer
3rd
Payor
Offer
FINAL
Actual Dollars (using 2010 Utilization)
E&M Codes $41,586 $50,848 $53,292 $55,738 $58,181
Procedure Codes $246,794 $204,461 $209,966 $224,571 $234,384
Total $288,380 $255,309 $263,258 $280,309 $292,565
Impact to Practice N/A ($33,071) ($25,122) ($8,071) $4,185
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Objectives
• Describe the predictable steps in any
negotiation.
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BEGIN WITH
THE END IN
MIND
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Now what?
51
0% Identify Payor Contact
10% Draft & Send Health Plan
Proposal
20% Follow-up with Payor
30% Receive Offer from Payor
40% Read Language & Draft
Revisions
50% Language & Rates Acceptable
60% Signature on Contract
70% Credentialing
Packet Submitted
80% Contract Returned Correctly
90% Credentialing
Approved
100% Effective Date
Police Reimbursement
for Accuracy
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Contracting – 0% Completion
0% Identify Payor Contact
• Identify payor contact information.
• Identify specific person in-charge of contracting, with responsibility for an entire network.
• Once contact person is identified and recorded, you’re ready to start the negotiation process.
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Alphabetical Payer Contact List
Insurance Company
Name
Contact
Name
Title Phone &
Fax
E-mail Address
Alpha HMO
Beta PPO
Delta Workers Comp
Gamma Plan
53
HANDOUT “Alpha Payer Contact List”
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Contracting – 10% Completion
10% Draft & send
Health Plan Proposal
• Send in a written request.
• Define your practice and needs to Payor.
• State your reimbursement needs.
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Contracting – 20% Completion
20% Follow-up with Payor
•Acquire verbal commitment.
•If no verbal agreement, ensure payor understanding.
55
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Contracting – 30% Completion
30% Receive offer from Payor
• Represent Practice’s unique circumstances.
• Codes.
• Ensure circumstances are represented in calculating acceptable rates.
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Contracting – 40% Completion
40% Read Language & Draft Revisions
•Review language and fee schedule terms.
•Know the deal-breakers.
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NEGOTIATION
STRATEGIES
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Contract Negotiation
Skim the Contract
•Skim – locate relevant data
•Focus on what matters the most
•Don’t get lost in the verbiage
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Key Terms
• Rates
• Timely Filing Limit
• Termination
• Renewal
• Amendment
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Contract Negotiation
Read the Contract in Detail
•Comprehend the contract
•Refer to checklist (health plan proposal letter)
•Make no assumptions
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Contract Negotiation
Prioritize Your Needs (Changes) & Prepare for Negotiation
•Prioritize
•Prepare
•Negotiation 62
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Dress Rehearsal
• Who will be present from your side, from their side?
• Where will the negotiations be held?
• Who will say what and when?
• How much time will be allocated?
• Who will produce an agenda?
• Who will summarize the actions and potential tasks?
• Who will document the meeting?
• Agree to not agree.
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Contract Negotiation
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Contract Negotiation
Ask for Everything!
•Agenda
•Prepared prioritization list
•Timing
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Negotiation Strategies
• Introductions include: – name, title, function
• Distribute agenda
• Establish parameters for negotiation
• Present what you bring to the table
• Present your data
• Ask for what you want
• Be willing to listen and hear what they are saying
• Be open to explore all options
• Document interaction, task, assign dates and who is responsible
• Summarize
65
“Taking initiative does not mean
being pushy, obnoxious, or aggressive.
It does mean recognizing our
responsibility to make things happen.”
Stephen R. Covey
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Contract Negotiation
Endure the Negotiation Process
•Stakeholders apprised
•Commit everything to writing
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Now what?
67
0% Identify Payor Contact
10% Draft & Send Health Plan
Proposal
20% Follow-up with Payor
30% Receive Offer from Payor
40% Read Language & Draft
Revisions
50% Language & Rates Acceptable
60% Signature on Contract
70% Credentialing Packet Submitted
80% Contract Returned Correctly
90% Credentialing Approved
100% Effective Date
Police Reimbursement
for Accuracy
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Contracting – 50% Completion
50% Language & Rates Acceptable
•Ensure language is acceptable.
•Practice agrees acceptable.
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Contracting – 60% Completion
60% Signature on Contract
•Print agreement
•Assemble
• Get signatures
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Contracting – 70% Completion
70% Credentialing Packet Submitted
• Complete packet
• Provide requested documents
• Work with billing person/company
• Set up Online Payor log-ins
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Contracting – 80% Completion
80% Practice Returns Contract Correctly
•Scan document
•Save in easy to find location at Practice
•Return to payor with tracking number
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Contracting – 90% Completion
90% Credentialing Approved
•Be responsive.
•Be proactive.
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Contracting – 100% Completion
100% Effective Date
•Welcome letter to practice
•Get counter-executed agreement for files
•Effective date = ultimate confirmation
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Objectives
• Employ strategies to monitor your success
once the contract is in effect.
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MONITOR
FOR
CONTINUED
SUCCESS 75
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Now what?
76
0% Identify Payor Contact
10% Draft & Send Health Plan
Proposal
20% Follow-up with Payor
30% Receive Offer from Payor
40% Read Language & Draft
Revisions
50% Language & Rates Acceptable
60% Signature on Contract
70% Credentialing Packet Submitted
80% Contract Returned Correctly
90% Credentialing Approved
100% Effective Date
Police Reimbursement
for Accuracy
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Educate Stakeholders
• Get front desk schedulers & pre-auth
coordinator information on Payors
– “Red Light/Green Light”
– Online payor log-ins
• Share effective date and new reimbursement
data with billing staff . . .
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Example for Payor Monitoring:
CPT Code MEDICARE
201X
Alpha
HMO
7/1/2011
Beta
PPO
201X
RBRVS
Delta
Workers
Comp
Gamma
Plan
201X
RBRVS
99201 $35.79 $48.32 $46.53 $62.08 $44.91
99202 $61.85 $83.50 $80.41 $90.73 $79.95
99203 $90.22 $121.80 $117.29 $133.70 $118.69
99204 $137.39 $185.47 $178.60 $191.00 $167.85
99212 $36.94 $49.87 $48.02 $57.30 $46.78
99213 $59.59 $80.44 $77.46 $85.95 $65.21
99214 $89.52 $120.85 $116.38 $128.93 $101.86
99215 $120.88 $163.19 $157.14 $186.23 $147.71
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Mark calendar
Stay proactive
Conscientious monitoring
Renegotiation Schedule
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Go get it!
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Final Words . . .
• Organization on all levels
is essential.
• Follow the steps in the
order outlined for best
results.
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Objectives
• Get organized for the contracting process
and prepare for a successful negotiation.
• List the predictable steps in any
negotiation.
• Identify strategies to monitor success once
the contract is effective.
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QUESTIONS?
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Marcia Brauchler, MPH, CPC, CPC-H, CPC-I, CPHQ
Physicians’ Ally, Inc.
101 W. County Line Rd. #230
Littleton, CO 80129
(303) 586-9390
Fax: (303) 586-9393
Cell: (303) 250-3236