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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 _____________________________ • 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 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 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 – 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]