Insurance Contracts & Auditing

1. Insurance Contracts& Auditing Presentation by: Melody S. Irvine, CPC,CPMA, CEMC, CPC-I, CCS-P, CMRS

2. Objectives • Negotiating the contract • Who, Why, What & How • Negotiating skills • Calculating your revenue • Language of contract • Negotiations

3. Why is This Important for Auditors? • Higher reimbursement • Know the contracts when we are auditing • Expertise • Can’t do it all • Physicians are not business people • Promoting our knowledge • Not my job!!!

4. Frustrating Process Negotiating a contract with a health plan is often time-consuming and labor intensive Must be willing to invest significant time and effort to be successful

5. What We Need to Know • Are we getting reimbursed appropriately? • Do we really understand our contracts? • Language/definitions of contract • Physician responsibilities • Payer responsibilities • Covered medical services and medical necessity guidelines • Credentialing process • Compensation and billing guidelines

6. Contracts and Access Where are your contracts located Be sure your coding and billing departments has a current copy Education of current contracts with office staff Finance department

7. Payer/Physician Responsibility • Payer Responsibility • 1st – Shareholders • 2nd – Customers • 3rd - Contracted vendors • Physician Responsibility • Caught between payer, patient and a viable practice

8. Antitrust Laws • Antitrust laws protect competition by preventing unlawful monopolies, price fixing, combinations in restraint of trade, and boycotts. • Four problem areas for physicians: • Relationships with payers • IPA’s • Practice mergers • Staff Privileges

9. Antitrust Laws • Antitrust state action doctrine • Allows states to over-ride federal antitrust laws • Gives immunity against antitrust laws when the state has enacted laws allowing independent physicians to negotiate jointly under state supervision

10. Skills in Negotiating Many doctors and office managers lack the skills to deal with insurance companies and negotiating rates. May need the help of an experienced negotiator Many file contract away and do not have a good, proactive methodology for negotiating reimbursement

11. Skills in Negotiating Risks are involved Providers are caught between trying to keep their practices open and honoring unreasonable contracts Engage the help of hospital or state medical society if needed

12. Where To Start The higher the percentage of your practice volume represented by a carrier, the more difficult it would be to “walk away” from participation. Start negotiations with the payer that represents the smallest amount of your business

13. Calculate Revenue Per Visit *Calculate your revenue per visit. *Calculate the total dollars over the previous twelve months and divide by total number of visits.

14. Know Your Market Know how many physicians of your specialty are in your area What type of services do you provide that other people don’t

15. Proper Reimbursement • Determine which insurance company needs your attention • Focus on: • Those that do not cover costs • Most financial burden • Most likely it will be four/five major plans

16. Top CPT Codes Some payers tie their reimbursement codes to some percentage of Medicare or other methods. Look at the reimbursement by major payers for your top CPT codes billed. An analysis will highlight low payments for codes used frequently.

17. Language of Contract • Physician responsibilities • Telephone calls • Are physician responsibilities reasonable? • Payer responsibilities • Guidelines used • Timely filing • Deadlines for contract negotiations • Evergreen clause

18. Language of Contract • Canceling contract • Ability to cancel contract • 90 clause • Credentialing process • Policy in place? • Online access • How often updated? • Most favorable nation clause

19. Language of Contract • Capitation • Risk Sharing Contract • Full Risk Contracts • Incentives • Carve outs • Medical services that are separated from a contract and paid under a different arrangement.

20. Language of Contract • Silent PPO’s • Organization that accesses a discounted rate for services from a physician, hospital or other health care provider without direct authorization from the provider • Eliminate Silent PPO’s from contract

21. Language of Contract • Contract yearly • Re-negotiate every year • Eliminate Retroactive Denials • Health plans determine mistaken payments then demand refunds. • Clean Claims • Standardized claim form with all fields completed and all information required for the adjudication of the claim

22. Language of Contract • General Provisions • Contract amendments • Hold harmless • Arbitration hearings • Physicians ability to purse or participate in class-action lawsuits

23. Language of Contract • Definition section • Terms of medical necessity and covered services • Speaking the same language • Offset and withholds provisions • Withholding funds • Time limits

24. Language of Contract • Covered services verses health care services • Review these terms carefully • Example: • If the contract defines “covered services” as those services covered under the applicable benefit plan and defines “health care services” more broadly as any services provided by a health care provider review the language later in the contract relative to claims payment.

25. Language of Contract • Emergency • What is the definition? • Changes to policies and procedures • 30 days in advance • In writing

26. Policy Manual Review Review policy manual before signing agreement Help determine any administrative burden on your practice or staffing issues Administrative staff should review

27. Medicare Fee-Schedule • Watch this language • Contract is based on “current-year Medicare” fee schedule • Example: 2007 fee schedule was better for primary care than 2008

28. Fee Schedules Notification of fee schedule changes 30 day notice Inquire how they determine the appropriate fee Negotiate a percentage of charges rather than a percentage of Medicare Access to complete fee schedule

29. Involve Billing Department • Some of the best resources come from those that work with the insurance companies on a daily basis • LCD/CCI edits • Coding guidelines • Denials, Appeals

30. Involve Billing/Coding • Preventive Care • Office visits and preventive care at same visit • Modifiers • 25, -51, -59, etc • Common problems with reimbursements • Incorrect reimbursement rates • Un-payable diagnosis

31. Auditors Collect Your Data • When performing audits collect data to help use with contracting negotiations • 95 or 97 guidelines • CMS guidelines or do they have their own • Clarlification of examination of 95 guidelines • What is their auditing process • Do they have certified auditors performing their audits • Auditing Compliance Plan

32. Insurance Company Representative • Do your homework and supply the representative information that will validate reasons to negotiate with you. • Have your statistics to back-up the information presented • Examples: • Practice size, Multiple locations, Extended hours, Quality, Member satisfaction, Covered lives in your community

33. Negotiations • Be reasonable and flexible • Have data to back you up • Two options if you are told “No” • Accept contract • Drop insurance plan • Know exactly what you want

34. Negotiations • Other alternatives • Don’t limit your conversation to money • Look for way to work with payers to enhance their practices • Negotiate other requirement areas

35. Negotiations Best scenario is a win-win scenario for both parties What issues is the payer most interested in Scratch my back and I’ll scratch yours

36. Drop Insurance Plan? • Drop Plan • Can you afford the drop in revenue • Competitor will be on overload • Inform patients that are affected • Inform insurance company

37. Letter to Patients/Healthplan • Letter One • Date you will no longer accept the healthcare plan • Why you are terminating the plan (optional) • You will continue to treat them • Letter Two • Send letter to H/R department of the employers who use the healthcare plan • Inform Insurance payer • Share with insurance rep

38. Assertive Not Aggressive If your demands are too aggressive insurance companies will terminate further discussions and force you to either take their offer or they’ll drop your contract. It’s critical to remember that payers control where patients receive care, not you.

39. Unsuccessful Negotiations Focus on current insurance contracts Some patients will continue to see you Contract directly with employers

40. Successful Negotiations It can take insurance companies several months to make changes in their data systems Watch this closely Make sure you fully comprehend a payer’s renegotiation offer

41. Education of Patients/Staff • Education • Helps to properly communicate with payer and patients • Spend time educating staff • Keep them up-to-date

42. Committee for Contracts • Setting up the committee: • Attorneys – review language • Doctors – their responsibilities • Accounting – reimbursements • Auditors – auditing compliance plan • Billing/Coding – modifiers, claim denials • Good negotiator • Consultant? • Educator

43. Summary Negotiate your contracts Be willing to compromise and be flexible Time and money you spend on this process is critical to your future

44. Thank You ! Questions can be directed to: namas@namas-auditing.com