Step Four: Monitoring Payor Contract Compliance

compliance So now you have done the hard work of obtaining, evaluating and negotiating the contracts with your payors, it is now an important part of your day-to-day revenue cycle processes to ensure that they are honoring the terms of these contracts.  With increasingly complex contract terms and the proliferation of plan products with the creation of the healthcare exchanges, it is more critical (and difficult!) than ever for physician groups to verify that payors are complying with contract terms.  If you are not contract monitoring, you are essentially trusting the other side to pay their bills correctly without an effective verification process. With an effective verification process, medical groups can not only ensure accurate reimbursement but also appeal invalid denials and identify inappropriate payment delays.  But the complex terms of today’s payor contracts make verification at the claim level impossible for most practices to do manually.  Automation and smart systems are required to accurately parse and validate high-cost carve outs, global fee periods, multiple surgery reductions, ASC groupers, modifier multipliers, multiple surgery reductions, bundling edits and site-of-service payment adjustments.  With all of these potential adjustments that may differ across payors – it is impossible for a staff member to “eyeball” a claim for accuracy. Most practices will need to partner with a Revenue Cycle specialist like MDeverywhere to gain access to the sophisticated tools that enable verification of line-item contractual allowed amounts and rigorously monitor payors compliance with contract terms at the claim level. Studies have shown that on average commercial payors underpay claims by 7%.  This is an average – some claims may be accurately paid while others are underpaid by potentially significant amounts.  The hard part for medical groups is to identify which claims are underpaid and then to put together the proof to successfully appeal the claim. Armed with this type of data, medical groups can:

  • Identify opportunities to appeal underpayments and recover lost revenue.
  • Efficiently file mass appeals when necessary.
  • Approach your next contract negotiations armed with actual data about payor performance on current contracts and understand potential leverage points to avoid costly reimbursement rule changes.

Effective contract monitoring tools and processes help providers untangle the web of contractual agreements, insurance rules and regulations – and find money that the payors are contractually obligated to pay.

  • Know when you are supposed to get paid and who to contact should you experience any delays.
  • Always post payments by line item to verify whether the amount you were paid matches the amount you expected.
  • Use technology to your advantage. Sophisticated revenue cycle systems like MDeverywhere's Practice 1st enable users to model contract terms and highlight exceptions.
  • Establish payor folders (electronic or paper) for each of your major plans and encourage revenue cycle staff to file copies of inappropriate denials, low payments, and other details of your relationship with that payor. This process helps to identify trends, and will come in handy during your next round of contract negotiations.
  • Monitor the date of submission of a claim, date of acknowledgement of receipt by payor, and date of payment to ensure timely receipt and payment.
  • Review EOBs for accuracy. Check for coding changes, reimbursement rates, clear and accurate description for why a claim was adjusted or denied, and interest payments on late payment, if applicable. If you do not understand a description code or a payment rate contact the payor to ensure you agree with each amount/explanation.
  • Meet with each major payor annually to address any payment delays, confusing denials, pricing problems, electronic connectivity issues or contract term questions. Be sure to bring copies of relevant documents and/or correspondence so you can reference actual examples to best illustrate your concerns.

Join Our Newsletter

Get Updates Direct to Your Inbox. Gain access to a rich library of articles, white papers, webinars, podcasts and more. Register today to receive eMDs Insights newsletter.

Specialty *
State *