Transcript Slide 1

Blueprint for Success
Effectively Negotiating
Third Party Physician
Payer Agreements
Session 2
Data Analysis
Preparation
Objectives
By the end of Session 2 participants will be able to:
1. Perform a benchmarking analysis of payer fee schedules using
RevolutionSoftware™ to set fee schedule proposals
2. Identify and define patterns in reimbursement to use in an overall negotiation
strategy
3. Analyze and benchmark billed charges against an established minimum percentage
of Medicare reimbursement to avoid being paid less than any contract rate and to
maximize your cash based business
4. Compare any two of your payer fee schedules on a “normalized code” and volume
base to benchmark against each other.
5. Learn and use a practical technique for comparing claims’ payments to contracted
rates and assess whether or not you are being “under reimbursed”
6. Objectively assess in network versus out of network reimbursement
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AGENDA
• Preparing for Negotiations: 50% or more of your time is
spent here!
• Preparing for Negotiation: doing your homework
 Data Gathering
 Benchmarking
 Existing Fee Schedule
 Billed Charges
 Analysis
 Out of Network Modeling
 Negotiation Strategy
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Question?
1) If we have two CPT codes, 52332 which is paid @80% of
Medicare, including patient co-payment, by the payer, at
$1600/service and code 99213 which is paid @90% of
Medicare, including patient co-payment, by the payer, at
$60/service and 52332 is performed 100 times a year and 99213
is performed 1000 times a year,
a)
What is the weighted average reimbursement if these are
my only two codes?
b) What is the average reimbursement?
c) Why is it different and which calculation most accurately
reflects the reimbursement to my practice?
Contracts Negotiations Process
• Data Analysis
• Proposal Letter
• Make Initial
Contact with
Payer
• Analyze Counter
• Negotiate until
agreement is
reached
• Escalate to Sr.
Level Manager
• Consider Out of
Network Option
• Monitor Claims
• Re-Negotiate
Phase 1:
Phase 2:
Phase 2:
Phase 3:
Prepare
Negotiate
Continue to Negotiate
Monitor / Re-negotiate
Negotiations
Completed
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Process – Phase I
•Data Analysis
•Proposal Letter
•Make Initial Contact with
Payer
You are here
Phase 1:
Prepare
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Proposal Letter
If you don’t know where you are going, any road will get you there.
– Lewis Carroll
•A well prepared proposal letter serves as a roadmap for
negotiations
– Two Sections
• Letter Body – the narrative that makes the case for your
practice’s value to the payer network.
• Fee Schedule Proposal – the result of your analysis that
details your requested reimbursement rates for your new
fee schedule
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Consider this…
• Practices have about 50%-70%% of their revenues
determined by payer allowables on in-network
agreements
• Most accept these agreements and are underpaid,
by a lot
• Using tools like RevolutionSoftware and analytical
techniques can increase revenues
• Great Practice Management will optimize revenue
you are entitled to. Great contracts negotiations
will create more revenue
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Practice Management Revenue Cycle
DOQ/IT Reporting
Clinical Patient Trends
Cash Flow Management
Practice
Management
Systems
Operational
Business
Management
Operational
Informational
Practice
Analytics
Are my reimbursements
maximized? Should I stay
in network? Are my
contract terms favorable?
Are my billed charges high
enough?
Scheduling
Coding & Billing,
Collections
Cash Flow
Operational
Reporting
Payer
Contracts
Analysis and
Negotiations
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RevolutionSoftware™ Cloud Service
Charge
Master
Inputs:
Payer Fee
Schedule(s)
Analysis:
www.revolutionsw.com
Cloud Service
Results:
Benchmarking Payer Rates
Compare any two payers, Payer Comparisons
Contracted rates vs. Actual Payments
In Network vs. Out of Network Analysis
Billed Charges Analysis
• More profitable contracts
• More revenue via Charge Master Adjustment
• Better data to negotiate with
• Quickly identify patterns in your data to increase revenue
• Other options: Out of network
RevolutionSoftware™ Learning Session
• How to get data into RevolutionSoftware and
Using Benchmarking Reports
• Payer Comparisons Analysis and Claims
Analysis
• Business Models (Out of Network and Billed
Charges Modelers)
• How to prepare an “Aggregate Payer” to
compare your contracted rates across payers to
make negotiations decisions
• Fee Schedule Proposal Options
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What should we ask for?
Go back to the payer with a counter proposal:
• E and M up 40%
• Pathology up 30%
• Radiology if below 110%, then up 40% (77014, 77418, 77427)
• All other up 15%, including codes not priced as a PCT of
Medicare
• Codes 52000, 55250, and 55700 add $200 for in office based
incentive (In addition to the 15% increase proposal)
 Note: 52332 left out due to unusually high reimbursement
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Question / Scenario…
Two practices merge, Practice A and Practice B, into a new practice, named Practice C.
Prior to the merger, Practice A had an PPO agreement with Payer 1 that paid, in
network, $1,000,000 the 12 months just before the merger. Their overall weighted
average rate of reimbursement with Payer 1 is 100% of Medicare.
Prior to the merger, Practice B had an in network PPO agreement with Payer 1 that paid
$200,000 the 12 months just before the merger. Their overall weighted average rate of
reimbursement with Payer 1 is 120% of Medicare.
Practice C has decided to remain in Payer 1’s network, as long as their total group
reimbursement with Payer 1 increases in aggregate. After a long and difficult
negotiation with Practice C, Payer 1 made a final offer of 108% of Medicare, down
12% from Practice B’s current reimbursement. Assuming that, in the absence of
change, revenues will remain constant, should practice C accept this new and final
offer from payer 1?
a) Yes
b) No
And Why?
“Across the board request”
Appendix A, Fee Proposal
Specific CPT Code Reimbursement: All CPT codes listed in Payer 1 ‘s fee
schedule to be reimbursed at the current payer1 fee schedule for practice X plus
30% for year 1. For years 2 and 3, a 5% cost of living increase shall be added to
all CPT codes.
Unlisted Codes:
80% of Billed charges
Pathology, Radiology, Imaging Services, Anesthesia Services, Supplies and
Medications: during both surgery and post op visits shall be reimbursed at 80% of
billed charges.
Implants and high cost supplies:
Reimbursed at (Cost + Shipping Cost) + 10%.
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“Define your fee schedule”
Appendix A, Fee Proposal
Specific CPT Code Reimbursement:
CPT Code
36415
51600
51700
51728
51741
51784
51797
51798
……
Payer Allowable
$7.20
$422.41
$197.00
$653.34
$270.00
$450.14
$309.99
$41.69
Other Listed Codes:
Unlisted Codes:
Location
O
O
O
O
O
O
O
O
80% of Billed charges
80% of Billed charges
Pathology, Radiology, Imaging Services, Anesthesia Services, Supplies and
Medications: during both surgery and post op visits shall be reimbursed at 80% of
billed charges.
Implants and high cost supplies:
Reimbursed at (Cost + Shipping Cost) + 10%.
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Why is this important?
•
Benchmark payer agreements to other providers and to other agreements that you
have with similar code mixes in your locality to:
– Determine which payer contracts to renegotiate
– Determine which payer contracts to terminate and go out of network
– Determine how much to ask for by agreement and by code or specialty groups,
e.g., E and M, Surgeries, Labs etc.
•
Compare out of network option vs. in network to maximize profit by agreement
•
More out of network revenue by updating your chargemaster to reflect UCR rates
 Don’t allow yourself to get bitten by the “lesser of” language
 MAKE MORE MONEY!
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Summary
• We covered how review and analyze your existing fee schedules
to prepare for negotiations
• We covered how to use tools and techniques to flow new revenues
into your practices
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Homework (Go to Link Below)
1. Register for RevolutionSoftware using the promo code
AUA1 (If you have not done so yet)
2. Prepare your csv files using the templates on the class
webpage (one chargemaster and your payer file(s)
3. Load your data and produce your benchmark report
4. Complete and submit the Session 2 quiz from the “Survey
Monkey” e-mails from [email protected]
Your homework assignment and downloadable documents can
be found on the class webpage at
www.healthcents.com/aua
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Now for a “Steve Special Offer”
Send [email protected] an email between now
and next class, after you load your first payer into
RevolutionSoftware, and we will provide advice and
counsel, up to ½ hour, about patterns in this data and how
to use it in contract(s) negotiations
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If you have questions or need help…
• Class schedule/content
• Rick Rutherford, CMPE, CHA
• Director - Practice Management AUA
• Phone: 410-689-3713
• RevolutionSoftware™ Questions
• Regina Vasquez, Sr. VP of Accounts – Healthcents, Inc.
• Tel: (719) 243-3845
• [email protected]
• Healthcents, Inc. Corporate
• Susan Charkin, President – Healthcents, Inc.
• [email protected]
• Steve Selbst, CEO, [email protected]
• Healthcents Inc. Tel: (800) 497-4970
• www.healthcents.com
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