Contracting is vital for any medical institution because it determines the type of relationship and reimbursement structure a practice can receive from the payer. It explains provider benefits, credentialing, medical necessities, reimbursement rates, schedules, and other things crucial for your medical practice. Read on to learn how to leverage payer contracts to your benefit and where to get help for maximizing reimbursement in Houston, Texas.
What Is a Payer Contract?
A payer contract is a document that defines and explains the relationship between a medical provider and a payer. The payers in the healthcare industry are organizations like health plan providers, Medicaid, and Medicare. They are in charge of setting service rates, processing claims, collecting payments, and reimbursing medical providers for their services.
A payer contract covers things like reimbursement rates, credentialing, provider networks, and more. Understanding payer contracts can help you maximize reimbursement, avoid denied claims, and prevent the most common errors in your revenue cycle.
Payer contracts define the type of obligation and benefits a provider can gain when entering a payer network.
What Are Reimbursement Variances?
Reimbursement or payment variances refer to the difference between the submitted claim to the payor and the received payment. Most of the time, reimbursement variances are underpayments for medical services compared to the actual cost of provided care. However, overpaying can also happen sometimes.
Payment variances happen more often than you think. With the increased complexity of the coding system and reimbursement procedures, mistakes are more likely to occur. This lowers accuracy, often resulting in a loss of revenue.
Reimbursement variances can happen because of provider or payer mistakes. You should focus on eliminating the issues on your part and catching payor mistakes as soon as possible.
Identifying reimbursement variances can help you maximize reimbursement.
How to Identify Reimbursement Variances
Minor errors quickly add up, which is why you should analyze the causes of payment variances and try to prevent them in the future. The first thing you need to do is make sure you understand the contract and what you can receive reimbursement for. Simply understanding everything can help prevent the most common mistakes causing payment variances.
When you receive a payment, you should review it immediately. First, compare everything with your contract terms, benefit explanations, and fee schedules to ensure that the information matches. Then, address the mistakes as soon as possible to keep your revenue cycle in check.
Keep analyzing your payments, and use data to your advantage. For example, you should group the codes that frequently result in reimbursement variances. That way, you can determine common issues and prevent them in the future.
Lastly, you need to keep track of each payor and rank them. So, when a payer frequently underpays, you know you need to address those problems and contact them to fix the errors. If the issues persist, you should consider dropping the contract.
Maximizing Reimbursement in Houston, Texas
Addressing reimbursement variances is only one of the possible ways to maximize reimbursement. If you want to learn more, you can schedule a call with a trusted healthcare consultant agency like Peregrine Healthcare.
We can help you analyze your contracts, negotiate better terms, and improve your revenue cycle to boost revenue and efficiency. We offer various time-saving services, including revenue cycle management, contracting, practice management, marketing, strategies to maximize reimbursements, and more.
Contact Peregrine Healthcare and learn how to maximize your revenue.