Download 303. Payer Contracting

Payer Contracting _
Assessment and
Renegotiation Process
Overview
AAPM&R 2015
Penny Noyes,
President, CEO & Founder
Objectives for this session –
Brief overview of Payer Contracts Assessment & Renegotiation Process
Gathering current contracts and rates
Determining which contracts to tackle first & when
Sending renegotiation notice
Modeling and analyzing offer impact
Identifying & Managing contract provisions that
need attention
Qualifying NOTES
CPT is the trademark of the American Medical
Association (AMA) and may be referenced on several
pages of this presentation
HBN Inventory & Analysis Tools shown in this
presentation
Discouraging Process: Perseverance Needed
The process of getting started on a payer contracting
project is frustrating. Expect it to take 2 months to
gather info if you are diligent, a year to complete your
first few re-negotiations and 2 years to feel you have a
handle on your agreements – then plan on maintaining
Gathering Your Contracts & Rates
Find all of your current FULLY EXECUTED
(Practice & Payer/Network signed)
agreements that may be filed at the office
Find all the Addenda between executing
Agreement and present
If you cannot find, don’t be embarrassed… you
are in the majority and can blame the manager
before you.
Contact your reps in writing and request copies
of Agreements & Addenda
Inventory of Your Agreements
Finding Your Current Rates
While there are lots of sources
… Easier said than done
Contract Exhibits often vague referring to undefined standard market schedules
Rates change over the years under perpetual agreements with evergreen clauses
Request population of CPT* list by rep – ideal if they will do it
Special Fax and Email queries
Web Portals
EOB Allowables
Rates Change – How can this happen?
Two primary ways…
Amendment provisions often allow the payer or network to
modify the rates without the written consent of the provider
Sometimes notice is required but silence = acceptance
Sometimes no notice is required at all
Rates are tied to a payer’s proprietary Market or Standard
Fee Schedule or RBRVS.
As the payer decides to modify its market schedule in a
market, your practice has essentially agreed to accept that
modification without notice or signature.
Gather Utilization Data from PMS
Select a recent but mature one year period
ALL billed codes and new codes should be
addressed
Include CPT, Mod, Payments, Charges, Place
of Service (Facility/Non-Facility)
and Marry it with your rates
Create a Side-By-Side Line Up
of all your Payers’ & Medicare Rates
Best to Include Charges, Max Allowable & Utilization too
At this Stage, Stop
and Evaluate Charges
Why?
• All too often, practices have certain codes that fall below
contract rates and almost all contracts have “lesser of
charges or contract rate” provision
• Contracts that are primarily based on a percent off of
charges will be devastating if …
Example: Charges are at 150% of CY Mcr and the agreement pays
50% of charges – you are getting paid 75% of CY Mcr.
• Most agreements default to % of charges if no value for a
specific code is in fee schedule
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• Note: With few exceptions - Charge the same for all payers for single
analysis base
What If All of Utilization is at Each
Payer’s Fee Schedule… to
Then By CPT Bands
Comparison by More Bands…
Injectibles
Extremely Challenging to Get Snapshot of Rates
Often Not Addresses in Agreement – Perhaps
ASP+6% or AWP based or refer to other source
 Change Regularly – sometimes quarterly,
sometimes not
 More discussion in Deal Breakers and Offers
Sessions
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Use Your Contract Inventory Notice Dates
and
Line Up of Reimbursement Rates
to determine what to tackle and when
What payer rates need most attention
What date can you notify the payer or network
Does contract allow off-anniversary notice
Send notices to initial payers – don’t negotiate
too many at one time – overwhelming
Get concurrence of your physicians/manager
Send notices
Term & Termination Provisions Set
Timeline For Re-Negotiations –
Know when you can go to the table
Payor
sets up
new rates
150
120
90
60
30
Days prior to renewal
Example assumes 90-day notice is contractually required.
Major negotiation period
0
What to include in a notice to renegotiate
Send w Proof of delivery to Contract Notice Address and to Rep
Practice name
Practice TIN, NPI & Locations
Physicians and Midlevels w NPIs
If Individual Agreements – may need signature line
for each provider
Intent to renegotiate but with termination date if
terms not agreed upon by given date
Date by which you request a response
Practice Value to Payer or Network
Prepare List of Things That Make your
Practice Special or Sets You Apart …
but don’t clutter notice – save for negotiation
Put yourself in payer shoes – Quality
Improvement and Cost Reduction goals –
what can they sell to self-funded clients?
Reference Objective Evidence Based Models
Offer to Pilot Value Based Programs with
Rewards for Results – Michigan/Priority Pilot
Gain can be Deceiving
$34k improvement on $293K =11.6%
Increase Percent of 2011 Medicare
from their initial offer of 100% to 110%
Change Default if No Mcr Value
from 40% of charges to 50%
Add Carve-Out –Bingo $80K
Payer Says OK but Base on 2009 Instead
Lost 18K with
year change
Keep in Mind
If the majority of rates are acceptable but a few are not, try carve-outs
Many Payers have moved to “banding” or service categories
You are aiming for the best overall result and may have to give on a
few codes to gain much more on others
Payers are targeting Lab, DME and Radiology – lowering
reimbursement
Expect these responses to your notice
Due to reform we are not able to entertain any rate
increases at this time
You are asking for a 23% increase all at one time – we
can’t do that. It is not our fault that you did not tend to your
agreements the last ten years.
We cannot provide an increase at this time but we can
consider your eligibility for our Value Based program that
pays a year & a half after the period for which you are
being reviewed
You are at market schedule and other providers accept
these rates- So What! So they haven’t evaluated their
contract either.
In other words – unacceptable roadblocks – Be persistant
Amendment or New Paper Agreement
Once negotiated, determine whether Amendment
or new Agreement is best for you
If Amendment look for provisions never discussed.
Examples:

loss of or change in term w/o cause,
 favored nation,
 change of anniversary
When effective and do you need to hold claims
while loaded
When you get an agreement…
The quick look…
Rate Exhibit
Products and Programs
Amendments
Term & Termination
Language for Reimbursement Exhibit
Full Dollars and cents rate schedules are rarely in exhibit
Common Reimbursement Language:
Percent of Medicare Resource Based Relative Value System (RBRVS)
Payer/Network’s Proprietary RBRVS
Relative Value Unit (RVU) Conversion Factor (CF)– Medicare or Proprietary
Payer/Network Standard Market Schedule or
Network schedule with payer/network assigned identifier
(X82 or 007-805 or 08943/08944, etc.)
% off of Charges
Other Reimbursement Exhibit Language
What If No Medicare or Std Schedule Value for code
Often at 35% - 50% of billed charges or based on not
so well defined sources - referred to a “gap fill”
Absence of language may lead to payer discretion
Multi-Year Agreements w /Escalators
Carve-outs – be sure these are in exhibit and do not
expire on a given date
Government plans –Medicare, Medicaid, Tricare –
Why agree to less than 100% of an already low rate?
As you Review Agreement
Research Your State Laws
These apply to insured plans but you can make them apply to self-funded
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Timely Payment
Timely Filing
Hold Harmless
Continuity of Care upon Term
Medical Necessity
Material Change/Amendment
Over/Underpayment & Offsets
Credentialing Timeframes
Any Willing Provider
Fee Schedule Disclosure
Assignment of Benefits upon Termination
Deal Breakers Common to Any Practice
Rate Exhibit & Disclosure of Full Fee Schedule
Amendment Provision
Products or Plan Types Included – All Products
Timely Payment & Filing
Patient/Member Hold Harmless
Which contract prevails
Overpayment/Underpayment –
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Timeframe & Offsets
 Retro-Eligibility Denials
Term & Termination & Continuity of Care after Termination
Definition of Medical Necessity
Affiliates and Assignment
Favored Nation Clauses or Parity
Mergers & Acquisitions
Provisions to Look For and Manage
May not be Deal Breakers
Confidentiality
Joint development of agreement
– delete
Equipment Standards
Provider leaves your practice
Annual Increases for multi-year contract
Appeals Process
Clinical & Administrative Edits – Bundling, etc
Evergreen – Automatic Renewal
“Payment Policies” – ever-changing
Binding Arbitration – Ask your attorney
Budget Neutrality Adjustor
Malpractice requirements
Merger & Acquisition/Change in Ownership
Credentialing
RECAP
• Inventory Agreements & Fee Schedules
• Weight analysis by utilization of codes
• Determine which payers need attention and when
contracts allow renegotiation
• Properly serve notice to payer or network
• Model and analyze offers and understand aggregate
and procedure specific impact
• Review Amendment or New Agreement before
signing
• Determine when effective and understand/manage
terms
Penny Noyes, President, CEO, Founder
Health Business Navigators
701 Dishman Lane Extension, Suite 3
Bowling Green, KY 42104
270-782-7272
[email protected]