Navigating payer contracts can be challenging for any healthcare provider. While many have in-house departments to handle them, many other structures opt for hiring healthcare consulting firms that can offer experience-backed reliability. Whether you are part of the first or the second group, this article will give you a broad idea of how to approach them.
Payer Contracts 101
A payer (also spelled “payor”), as its name indicates, is a person or entity that makes payments. In the healthcare industry, this means organizations like medical insurance companies, Medicare or Medicaid. When healthcare providers set up their businesses, they engage with these organizations and enter into contracts to systematize their revenue incomes. Both sides face challenges, and in this article, we’ll focus on those encountered by the providers.
When entering into a contract with a payer, you should take the following into consideration:
Identify Your Costs
Make sure to plan ahead and make a financial plan where you include projected costs both for the business and for your personal life. This way, you can compare them with the potential reimbursements and determine whether that payer is going to provide what you need to be financially sustainable.
Do Your Research
Every payer has their own set of policies, terms and conditions. Although it takes time and dedication, be sure to thoroughly read the paperwork and acquaint yourself with them. It is easy to believe that there isn’t much difference between one and the other, but nothing could be further from the truth. On top of that, it is good exercise to become acquainted with the jargon, as it can be confusing.
Stay Up to Date with Fee Schedules
Medicare and Medicaid fee schedules are available for any physician and healthcare provider to access. However, in the case of private medical insurance companies, these might be mentioned in the contracts. In that case, you can use Medicare and Medicaid fees as a guide to learn what is fair compensation.
Define the Credentialing System
When negotiating payer contracts, make it a point to discuss and agree on an optimized credentialing system. The sooner your providers get their credentials, the sooner they can issue the invoices to the payer. This is essential to a healthy revenue system for your practice. Therefore, it is important to let your representative know that this is going to impact the contract.
You should be mindful that this process might vary depending on the payer, and it can take time and resources. When it comes to credentialing, it is a good idea to partner with experts that can help you navigate or even deal with this process altogether.
Excessive Authorization Requirements in Payer Contracts
Some payers require you to get their prior authorization for apparently everything. This hampers what should otherwise be an organic journey to healing for your patients. Not only does it impact you and your patient’s timeline, but also the practice’s finances. Consequently, it is advisable that you not enter a contract before extensively revising this clause.
Payer Contracts in the Hands of Experts
Admittedly, physicians go to medical school to help people and might not find this aspect of the job as enjoyable. Negotiating payer contracts requires time and effort that takes away from that same time and effort spent on patients.
For those who are less keen on the administrative side, consulting experts like Peregrine Healthcare make the ideal partner. Our in-depth knowledge of payer contracts makes it so that you can focus on your patients with the peace of mind that your practice is in the best hands.
Learn more about our customized contracting solutions here.