Physicians’ Ally, Inc. - AAPCstatic.aapc.com/a3c7c3fe-6fa1-4d67-8534-a3c9c8315fa0/db0bf111-b6ae...ICD-9 Frequency 17 Define your Practice ICD-9 Primary # of Charges (8/12 - 2/13)

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4C: PAYOR CONTRACT

NEGOTIATIONS

1

Marcia Brauchler, MPH, CMPE, CPC, CPC-H, CPC-I, CPHQ

April 14, 2014 3:45 – 5:00 p.m.

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

2

Look

familiar?

3

WHY

BOTHER?

4

3

It’s your practice’s paycheck

5

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)

6

4

Negotiation Summary

7

CPT Code

New Contract

Effective

Date

Increase

Weighted %

of 2012

Medicare

Original

Contract

Effective Date

Weighted %

of 2012

Medicare

Alpha HMO - Year 1 5/15/2013 5.1% 104.0% 12/6/2005 99.0%

Alpha HMO. - Year 2 5/15/2014 10.1% 109.0% 12/6/2005 99.0%

Beta PPO 4/1/2013 4.8% 110.5% 4/15/2009 105.5%

Delta Workers Comp 9/1/2012 25.4% 127.3% 9/1/2012 101.5%

Gamma Plan - Year 1 12/1/2012 7.5% 109.3%

10/1/2011

101.7%

Gamma Plan - Year 2 12/1/2013 12.5% 114.4% 101.7%

Negotiation Analysis

8

Carrier Name Payor Mix (1)

Total Patient Fees (Billing/Insurance)

(2)

Contractual Increase (3)

Annual Increase

($) Alpha HMO - Year 1 11% $270,352.53 5.1% $13,787.98 Alpha HMO. - Year 2 11% $270,352.53 5.1% $13,787.98 Beta PPO 15% $370,490.94 4.8% $17,783.57

Delta Workers Comp was non-par increase from

proposal: 25.4% Gamma Plan - Year 1 26% $642,184.30 7.5% $47,990.17 Gamma Plan - Year 2 26% $642,184.30 5.0% $32,203.93 Total $2,469,939.62 $97,977.67

NOTES:

(1) Payor Mix provided by Client for FY2011 (October 1-September 30) on 11/11/12

(2) Annual Revenue provided by Client for FY2011 (October 1-September 30) on

7/16/12

(3) Please see Negotiation Summary for calculation (based on 2012 Medicare

equivalents).

Calculated from existing contract or initial proposal.

Does not include some services that were fixed at a certain rate regardless of contracted rate.

5

NOTE:

Mandated fee schedules are not negotiable

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The market place is getting smaller – payor consolidation

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6

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 circa 2014

Time commitment

• 100 hours

• 6 months

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Objective:

• Get organized for successful payer

contracting negotiations

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GATHER

DATA

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8

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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Define your Practice Productivity by CPT/HCPCS

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CPT

CodeDESCRIPTION

FREQ.

(2012)

E/M

99201 Office/outpatient visit new 92





99211 Office/outpatient visit est 837





99058 Office emergency care 4

99354 Prolonged service office 178

99355 Prolonged service office 16

99358 Prolong service w/o contact 51

99359 Prolong serv w/o contact add 8

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ICD-9 Frequency

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Define your Practice

ICD-9

Primary

# of

Charges

(8/12 -

2/13)

% of

Total

465.9 1,483 5%

V20.2 1,349 4%

462 1,098 4%

V70.0 1,037 3%

461.9 1,000 3%

786.2 937 3%

401.1 681 2%

599.0 647 2%

724.2 567 2%

719.47 535 2%

V04.81 516 2%

250.00 512 2%

V72.31 457 2%

719.41 442 1%

Define your Practice Fee Schedule

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NEW (3 OF 3) ESTABLISHED (2 OF 3)

NURSE VISIT 99211 30$

98$ 99214 99$

153$ 99215 133$

Detailed

Comprehensive 99204

99203

Comprehensive 99205 192$

99201 39$ 99212 39$

66$ Expand. PF 99202 68$ 99213

Problem Focus

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Fee Schedule Analysis

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CPT

CodeDESCRIPTION

PHYSICIAN

CHARGE

GPCI'd

MEDICARE

Non-facility

(NF)

Maximum

Contracted

Allowable

as of 100%

1.16.13 2012 NF

Summary

Wtd. Avg. Reimbursement (excl. Lab) $148.85 $86.60 $104.06

Wtd. Percent of 2012 MC Non-Facility (NF) 171.9% 100.0% 120.2%

Wtd. Percent of 2012 Workers Comp 124.5% 72.4% 87.0%

Weighted Percent of Physician Charge 100.0% 58.2% 69.9%

E/M

99201 Office/outpatient visit new $72.20 $29.73 $42.47 $22.80 $49.40





99211 Office/outpatient visit est $58.65 $38.90 $19.75 $27.52 $31.13





Physician

Charge is

higher / lower

than indicated

Medicare

Physician

Charge is

higher / lower

than Maximum

Contracted

Allowable

Payor Mix (Example):

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11

Determine how your Participation

Agreements are held

–For each physician

–Individually, Group, IPA

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‘Red Light/Green Light’ Payer / Network

Participation Status

Products

Cigna ☐ Participating ☐ NOT Participating Agreement Type: ☐ Group ☐ Individual Contracting Entity: ☐ Direct ☐ IPA

☐ Commercial ☐ HMO Select ☐ LocalPlus

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Define your Payer Experience

Insurance accounts receivable (A/R) aging

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Insurance Co. # Charges 0 - 30 days 31-60 61-90 91-120 >120 Total

AARP 0 $790 $332 $0 $0 $150 $1,272

Aetna 9 $24,913 -$576 $0 $183 $0 $24,521

Allegiance 1 $0 $0 $0 $0 $6,750 $6,750

Assurant Health 7 $12,864 $0 $0 $184 $241 $13,289

BCBS 7 $7,704 $554 $0 $0 $5,244 $13,502

CNIC Health Solutions 5 $6,235 $2,992 $0 $0 $0 $9,227

Champus/Tricare 3 $0 $0 $0 $0 $1,105 $1,105

CIGNA 14 $9,089 $2,865 $0 $0 $6,071 $18,025

Cofinity 2 $0 $183 $0 $0 $6,750 $6,933

Humana 4 $1,118 $5,505 $0 $0 $0 $6,623

Medicaid 41 $6,349 $120 $21 $42 $30,327 $36,858

Medicare 57 $42,979 $0 $40,155 $32,137 $59,605 $174,875

RMHP 7 $21 $0 $6,469 $0 $5,441 $11,931

Self-Pay 5 $11,632 $10,184 $3,436 $226 $2,369 $27,846

United Healthcare 40 $48,662 $411 $17,116 $0 $6,803 $72,991

VA 18 $0 $296 $0 $0 $17,152 $17,448

Workers' Comp 12 $0 $28,343 $0 $183 $183 $28,709

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

-$51.36

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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%

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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High-Level Summary (Handout):

Non-RBRVS-valued Codes:

• Lab

• X-ray

• HCPCS

– DME

– Supplies

– Injectables

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15

PREPARE, PREPARE,

PREPARE

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Weighted Payment

30

CPT Code DESCRIPTION ALPHA HMO

10/1/2011

108.48%

2010 NF

Summary

Weighted Average Reimbursement $87.65

Weighted Percent of 2013 Medicaid 153.4%

Weighted Percent of 2013 Medicare 101.7%

Weighted Percent of Physician Charge 81.8%

Office Visit Codes

99201 Office/outpatient visit new $43.20




99211 Office/outpatient visit est $21.20




16

Aetna CEO Compensation

31

Mark T. Bertolini

http://online.barrons.com

$36.36 million (2012), plus $11.1 million in stock awards

Example of Past Utilization:

CPT Procedure Count Allowed 2012 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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17

Pure Average:

33

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% -15%

Weighted Average:

34

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% -22%

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Establish a reference point

• Determine financial outcome

35

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

Objective:

• Describe the predictable steps in any

negotiation

36

19

BEGIN WITH

THE END IN

MIND

37

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

20

Contracting – 0% Completion


• 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.

39

Alphabetical Payer Contact List

Insurance Company

Name

Contact

Name

Title Phone &

Fax

E-mail Address

Alpha HMO

Beta PPO

Delta Workers Comp

Gamma Plan

40

21


10% Draft & send

Health Plan Proposal

• Send in a written request.

• Define your practice and needs to Payor.

• State your reimbursement needs.

41



•Acquire verbal commitment.

•If no verbal agreement, ensure payor understanding.

42

22


30% Receive offer from Payor

• Represent Practice’s unique circumstances.

• Codes.

• Ensure circumstances are represented in calculating acceptable rates.

43

Expect a “No” or a Nominal

Cost-of-Living Increase:

44

“I am unable to increase your current reimbursement as I

show it is already above market in [city]. Please let me know

if you would like to discuss.”

For a Provider on the Health Plan’s “Market Fee Schedule:”

“Our unit cost trends in [market] across the entire network are roughly 3%.]

“I did review our proposal of [up $1 on the conversion factor] and compared

to other [specialty] groups we have contracted and that is a [Payor] market

competitive rate. With that said, at this point – I do not believe it is warranted

to give any more than what is already on the table. While this most likely is

not the answer you were seeking – this is the position that [Payor] is going to

take. I know it is a business decision you will have to make as to whether or

not you remain contracted in our network and we hope that you do on behalf

of your patients our members.”

23


40% Read Language & Draft Revisions

•Review language and fee schedule terms.

•Know the deal-breakers.

45

NEGOTIATION

STRATEGIES

46

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Key Terms

• Rates

• Timely Filing Limit

• Termination

• Amendment

47

Sample Language: Rates

48

“[PAYOR] Market Fee Schedule”

“Payment for services . . . may be less than

this based on Payor’s then current payment

policy.”

Products/Rates:

25% off Provider’s billed charges OR

where federal or state mandated fee

schedules applies, Provider agrees to

10% below federal or state fee schedule

120% Medicare (2010) for Surgery, Radiology, E&M, Medicine

100% Medicare for Routine Venipuncture (36415-6) and Immune Admin

(90465-74)

25

Sample Language:

Timely Filing Limit

49 49

“Group shall use best efforts to submit claim forms

within thirty (30) days following the date of service,

but in no event later than sixty (60) days following the

date of service.”

At Company’s request Group may be required to

submit claims electronically. Group agrees that

Company shall not be obligated to make payment for

claims received over ninety (90) days from the date of

service.

Claims for covered services must be submitted within 180 days of the

service, or if payor is the secondary payor, within 180 days of the date of

explanation of service from the primary payor.

Sample Language:

Term/Termination

50 50

“This agreement has an initial term of two (2) years.”

Evergreen: This agreement shall be automatically

renewed each Anniversary Date for additional periods

of one (1) year unless either party provides the other

with ninety (90) days prior written notice.

Either party may terminate this Agreement without cause by

providing the other party ninety (90) days prior written notice of

termination.

Continuing care obligations after the agreement

remains in effect. . . (provisions remain in effect)

26

Sample Language:

Amendment

51

Payor may amend this Agreement upon sixty (60)

days’ written notice to Provider to comply with

regulations . . .

This Agreement may be amended in writing as mutually agreed

upon by the parties.

“In the event payor makes a material

change in the terms of this Agreement it

shall provide at least ninety (90) days written

notice to Provider of such change. Provider

must object within XX days . . .”

Endure the Negotiation Process

52

• Stakeholders apprised

• Commit everything to writing

• Ensure language is acceptable.

• Practice agrees acceptable.

• Print agreement

• Assemble

• Get signatures

27



•Ensure language is acceptable.

•Practice agrees acceptable.

53



•Print agreement

•Assemble

• Get signatures

54

28


70% Credentialing Packet Submitted

• Complete packet

• Provide requested documents

• Work with billing person/company

• Set up Online Payor log-ins

55

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?

56 2ndLt Joshua Larson, USMC, www.defense.gov

http://navinet.navimedix.com/Main.asp

http://navinet.navimedix.com/Main.asp

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80% Practice Returns Contract Correctly

•Scan document

•Save in easy to find location at Practice

•Return to payor with tracking number

57


90% Credentialing Approved

•Be responsive.

•Be proactive.

58

30


100% Effective Date

•Welcome letter to practice

•Get counter-executed agreement for files

•Effective date = ultimate confirmation

59

Objective:

• Employ strategies to monitor your success

once the contract is in effect

60

31

Now what?

61


10% Draft & Send Health Plan

Proposal


30% Receive Offer from Payor

40% Read Language & Draft

Revisions



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 . . .

62

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Example for Payor Monitoring:

63

CPT Code DESCRIPTION Alpha HMO

Year 1

116.6%

2010 NF

Summary

Weighted Average Reimbursement $94.22

Weighted Percent of 2013 Medicaid 164.9%

Weighted Percent of 2013 Medicare 109.3%

Weighted Percent of Physician Charge 87.9%

Office Visit Codes









Mark calendar

Stay proactive

Conscientious monitoring . . .

Renegotiation Schedule

64

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Contract never loaded correctly

by Payor: • Agreement for 180% Medicare

• Loaded (incorrectly) at 120% Medicare

• Not caught by billing company for >1 yr.

– $15,000 in lost revenue

• Payor offered 270% of Medicare for 6

months, beginning in January

– (new patient deductibles)

• Practice agreed to 200% of Medicare

(indefinitely) to recoup/offset lost $$$ 65

Go get it!

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34

QUESTIONS?

67

68

Marcia Brauchler, MPH, CMPE,

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

[email protected]

Documents

Physicians’ Ally, Inc. - AAPCstatic.aapc.com/a3c7c3fe-6fa1-4d67-8534-a3c9c8315fa0/db0bf111-b6ae...ICD-9 Frequency 17 Define your Practice ICD-9 Primary # of Charges (8/12 - 2/13)