Healthcare payer contracts are often complex, complicated documents, and can create major challenges for healthcare providers if not closely managed and monitored. They define the ways healthcare providers are reimbursed for delivering services to patients who are covered by particular health plans, encompassing everything from provider networks and reimbursement rates to provider credentialing and medical necessity.
Due to the challenges of keeping up with these agreements and developing a thorough understanding of the various terms and details, healthcare providers often miss deadlines to file claims and fail to meet conditions for timely reimbursement. This can contribute to providers not receiving all reimbursement payments and making miscalculations regarding revenue streams, which can adversely impact your bottom line.
This is why it’s critical for hospital and practice administrators to fully understand payer contracts to ensure your organization is properly reimbursed for services without having to spend extra time chasing down payers. The following five tips can help you put a plan in place to effectively manage healthcare payer contracts.
1. Use contract management software to store and organize payer contracts
Contract management software allows providers to store all payer contracts in a centralized repository, which eliminates the hassle of searching through shared drives anytime there’s a need to reference a specific contract.
Using labor-intensive manual processes - such as storing contracts in various shared drives and tracking them in a spreadsheet - can be time-consuming and lead to errors. Matters become even more complicated when multiple people are working from the same spreadsheet.
2. Dig deeper into contract language
It’s critical for anyone who manages payer contracts to have a solid grasp of the language in your agreements so you understand common requirements and clauses that often present challenges. Taking a closer look at the details found in your payer contracts can reveal whether or not they include clauses around network requirements, reimbursement policies, and unilateral amendments, meaning payers can make changes to agreements without the provider’s consent.
3. Report on the important terms and details of payer contracts
Effectively managing payer contracts requires visibility and insight into all the different provisions of your agreements. While that certainly includes the various reimbursement rates and guidelines, it also includes factors such as the amount of time a provider has to submit a claim after providing a service, the time the payer has to reimburse the provider, and the specific requirements related to contract termination or renegotiation.
Many contract management software solutions offer the ability to tag all of this contract data within the software, so you can then run reports to see how this information varies across all of the agreements in your portfolio.
4. Schedule reminders for renegotiations and termination dates
Healthcare payer contracts are often heavily stacked in favor of the payer. However, when healthcare providers are aware of renegotiation and termination deadlines, you can better prepare to take action and determine whether or not to make changes to the terms of an agreement - or whether you should continue working with the payer at all.
By taking advantage of contract management software alerts and notifications, you can be sure you’re automatically notified well in advance of any important payer contract dates. Whether you set alerts for 30, 60, or 90 days in advance (or any other time frame) of important deadlines, you’ll have plenty of time to evaluate each agreement so you can adequately prepare for next steps.
5. Negotiate more favorable agreements
With help from the reporting functionality mentioned previously, providers can gain greater insights into your contracts, both in terms of the content and performance of agreements. You can then leverage that knowledge to work with payers to find better reimbursement rates, or decide if it makes more sense to look for different payers. By preparing evidence-based, data-driven responses, you’ll be in a better position to renegotiate contracts and terms that are more favorable to your business.
Most healthcare providers have agreements with multiple payers, both commercial and government, so it can be overwhelming to fully understand how every individual contract is structured. However, by implementing contract management software to help optimize your contract management process, you can more easily see the most important information in your contract portfolio, and take strategic action to achieve the best results for your organization.