CONTRACT NEGOTIATION: Improve your Practice’s...

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.

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.

2

Look

familiar?

3

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?

4

WHY

BOTHER?

5

It’s your practice’s paycheck

6

You probably have more leverage than you think

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)

7

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

Time commitment to renegotiate a

typical practice’s agreements

• 100 hours

over

• 6 months

15

Objectives

• Get organized for successful payer

contracting negotiations.

16

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

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

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%

Define your Payer Experience

• Payer mix . . .

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Payor Mix (Example):

27

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

“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

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

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

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”

Disregard payors who say

you can’t negotiate now

• “Term” Section

• Negotiation window . . . Ugh.

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High-Level Summary:

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%

Weighted Average:

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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%

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

Objectives

• Describe the predictable steps in any

negotiation.

49

BEGIN WITH

THE END IN

MIND

50

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

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

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HANDOUT “Alpha Payer Contact List”

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.

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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

61

Contract Negotiation

Prioritize Your Needs (Changes) & Prepare for Negotiation

•Prioritize

•Prepare

•Negotiation 62

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.

63

Contract Negotiation

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

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“Taking initiative does not mean

being pushy, obnoxious, or aggressive.

It does mean recognizing our

responsibility to make things happen.”

Stephen R. Covey

Contract Negotiation

Endure the Negotiation Process

•Stakeholders apprised

•Commit everything to writing

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Now what?

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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

Contracting – 50% Completion

50% Language & Rates Acceptable

•Ensure language is acceptable.

•Practice agrees acceptable.

68

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

73

Objectives

• Employ strategies to monitor your success

once the contract is in effect.

74

MONITOR

FOR

CONTINUED

SUCCESS 75

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

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.

82

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

mbrauchler@physicians-ally.com