Contract Management: Getting Paid What You’re Due, When You’re Due
Even under ideal circumstances, there are many challenges to balancing a budget. The dilemma is especially true in the healthcare industry, where reimbursements from insurers are the primary source of revenue. When those payments are delivered in sporadic or lengthy timelines, it can severely impede a facility’s ability to keep accounts in line and, by extension, strain its operations.
The strategy for avoiding reimbursement problems begins with shrewd management of the provider-insurer relationship. Proactive steps should be taken in the contracting stage with continued vigilance until the insurer remits payment, and sometimes even beyond that point. It’s a lot to manage, but the results can be the difference between constant organizational strains and fluid budgetary processes.
Strategies for Avoiding Reimbursement Problems
A widespread perception holds that hospitals and other healthcare providers are always beholden to the whims of insurers. It’s true that insurers have a great deal of leverage, but providers must enter negotiations with the intent to shape certain terms and conditions in a way that is most favorable to them.
One area often open to a provider requires payment timetables. Unfortunately, it’s not always possible to establish a blanket set of terms. The extensive range of procedures, treatments, and other components of care come with corresponding ICD-10 codes, making it easy for things to get lost in the wrangle of negotiations. Such oversights often result in individualized, lengthy, and unwieldy payment terms. It’s helpful to employ tools that can automate the organization and analysis of shifting codes to help ensure all terms are amenable to the facility’s budget management plans.
Without vigilance by the patient accounting department, underpayments of claims can create serious budget constraints. With a large amount of payments coming in, it can be very difficult, particularly for a small accounts receivable teams, to properly flag reimbursements that fall below what was expected.
Sometimes these discrepancies occur because of errors or because the insurer levies some vaguely communicated adjustment. If too much time passes between the disputed payment and the hospital bringing the problem to the insurer, it can be that much more difficult to collect revenues due. Hospitals need to catch these issues as quickly as possible, preferably with an electronic system that offers immediate alerts.
Bring the Collection to Completion
Payments falling short or late remittance from insurers can become recurring problems. Sorting through a mountain of payments can make it difficult to spot such patterns. The ability to clearly identify insurers who could use an extra push allows A/R staff to efficiently prioritize work.
“If you see services consistently being underpaid, you may want to focus your initial recovery efforts there and also identify if the contract itself could be modified to reduce these discrepancies,” data and analytics expert Steve Gilb told Becker’s Hospital CFO Report. “Having this level of insight can help prioritize the highest areas of opportunity for your staff, [bring to the] surface chronic issues to the payer and improve the overall quality of your contracts.” Early identification can also mean early recovery of underpayments.
Streamlining Organization Processes
Revenue management systems can be exceedingly complex to manage, further compounded by the fact that the majority of hospitals spread the revenue management tasks across multiple software vendors. When this happens staff is left to manage not only the contracts and reimbursements, but also must devote valuable time to negotiating disparate systems.
The entire process of shaping and enforcing insurer agreements can be managed with tools available from MEDHOST. For instance, the Contract Management feature within the Outsourced Services platform offers robust oversight of contract maintenance, underpayment, validation, and underpayment recovery. It’s the sort of dynamic, thorough tool that can make a significant difference when keeping hospital finances in shape.