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What We Learned (Part 3): Q&A "Adapting to New Reimbursement Models: How to Maximize Payer Performance and Maximize Revenue"
Bradley Olin

By: Bradley Olin on July 26th, 2017

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What We Learned (Part 3): Q&A "Adapting to New Reimbursement Models: How to Maximize Payer Performance and Maximize Revenue"

During the HBI webinar "Adapting to New Reimbursement Models: How to Maximize Payer Performance and Maximize Revenue," attendees had an opportunity to ask the speakers questions about how these lessons can be applied to thier own healthcare organization. Here is a recap of the questions and answers given:  

  1. (Q): When a proposed contract combines payment arrangements (like a bundled payment that includes value-based criteria that would affect reimbursement), how should contracting negotiations be adapted?                   
    (A): First, we recommend that you begin by mitigating your risk. Make sure you’ve modeled your contracts for all scenarios. For example, in a value-based contract, if you don’t want to bundle a payment, perhaps you could look at similar case rates to help reduce the risk. Second, define what the baseline fee-for-service arrangement/terms are going to be for professional or technical components. Model that out with your claim history. Lastly, we recommend that you utilize CMS data (from an episodic data standpoint) as a benchmark for your organization. Understand your market and where you fall compared to your competition.
  2. (Q): My organization does not have contract modeling software. What are some low-tech ways I can predict the proposed contracts’ effect on reimbursement?                                                                                                            
    (A): Though it is commonly viewed as obsolete for maintaining contract governance, Microsoft Excel is one program some facilities prefer to use.
  3. (Q): Should a healthcare organization attempt to have a certain percentage of its contracts fall into different types of payment arrangements? (I.e. if one major payer requests a value-based contract, should we attempt to negotiate a fee-for-service contract with another major payer to offset it)                                                                
    (A): If you’re doing a value-based contract with one payer, you should do a value-based contract with all of your payers. Thinking of it in terms of what you’re looking to accomplish, most of those agreements will require that you meet some sort of reduction in medical costs in addition to quality measures. Whatever you implement across your system (i.e. physicians, hospitals, etc.) you should do the same thing for your entire population. While you reduce medical costs for one payer, you’ll probably do the same for the other payer too.
  4. (Q): Are there common contract management system calculation accuracy errors that we should be on the lookout for?                                                                                                                                                                        
    (A): Not exactly common errors. Ask yourself how your organization is doing compared to PMMC’s four metrics (in terms of 1. How accurate are your terms being calculated?; 2. Is all data fully imported into the system?; 3. Are the contracts current; 4. What is your organization’s overall payment accuracy rate?).
  5. (Q): When monitoring whether contracts are current, are there any specific red flags that would indicate an issue?                                                                                                                                                                                    
    (A): If you notice that within a certain category that you’re wrong across the board, look to see if you need a fee-schedule update loaded. For example, if all your imaging reimbursement is off, check to make sure there isn’t a fee schedule that you forgot to upload.
  6. (Q): Are there classes you can take to better understand contracts and what to look for?                                         
    (A): There is material out there as it relates to a master program in healthcare finance, but no classes that we’re aware of, per se.
  7. (Q): What are the 3 sources needed to validate data errors?                                                                                         
    (A): When data is successfully imported into PMMC’s system, we use an “import error table”. We look for data errors such as: the contract effective date is expired (and the hospital has not worked to renew the terms) and any registration errors (a new payer plan code that has not been linked to a payer contract).


About Bradley Olin

Bradley Olin is the Marketing Communications Specialist at PMMC, a leading provider of revenue cycle management solutions for hospitals and other healthcare organizations across the U.S. Brad offers a modern outlook into the evolution of the healthcare industry and general practices used to grow an organization’s revenue integrity.