Just as individuals keep their household budgets on track by reviewing their bank statements, paychecks and grocery bills, hospitals and other providers need to pay close attention to their contracts with insurers to make sure they are getting what they are owed.
Paul Stevenson and Terri Welter of MedTactics in Arlington, Va., will coach providers on how to monitor contracts and negotiate them so as to get paid fairly during their HFMA session from 10: 30 a.m. to 12: 30 p.m., Tuesday, June 19.
"Contracting has become over the last five years somewhat of an art form," says Stevenson, a partner at MedTactics, a healthcare management consulting firm. "A lot of contractual clauses are drafted with some intent to try to gain advantage."
Titled "Getting Paid What You Negotiated," the session will show providers how to perform audits of their own contracts, recognize when they are not getting paid properly and recover costs when they are not.
"We go after this like we're killing snakes," Stevenson says. "You have to go after every single claim and identify it."
MedTactics' clients are primarily hospitals, health systems and physician groups.
Both payers and providers are somewhat at fault for flawed contract relationships, Stevenson says. Though payers may be guilty of denying claims, paying them late or inaccurately, or downcoding them arbitrarily, providers often do not have adequate plans in place for monitoring their contracts and often submit faulty claims or fail to follow up on claims that have not been paid, Stevenson says.
MedTactics has prepared a so-called "contract dashboard" that hospital board members and senior management can use to track the effective reimbursement rates from their contracts. The dashboard, a simple spreadsheet, translates specific contracts into a formula indexed to the Medicare payment rates and tracks renewal dates, annual increases and effective payment rates for one month, three months and the year-to-date.
"Sometimes the contract is not even worth the fire you could make with it because there are so many problems with it," Stevenson says.
The dashboard attempts to demystify the payment process. If, for example, an insurer has a new requirement-such as including the address of the covered person's employer -and doesn't adequately notify the provider, it can bring thousands of claims to a standstill before the provider realizes the claims are missing information that will cause the insurer to disqualify them. The dashboard, however, will alert management quickly to a problem because the one-month effective payment rate plummets.
"This allows you, in a nutshell, as a senior manager or board member to see this stuff," Stevenson says. "You'd be amazed how many board members don't have a knowledge of who the contracts are with and what kind of contracts they have."
Ultimately, providers should negotiate contracts that allow them to get paid fairly, monitor the insurer and terminate the contract without cause, Stevenson says. He adds it is better to have a slightly lower reimbursement rate but get paid the agreed-upon rate.
"In our opinion, a lot of the contracting literature is about gamesmanship," Stevenson says. "We've got enough complexity as it is. These are human beings we're dealing with, so let's minimize it and get on with what we need to do."