Growing Role for Patient Access: Payer Contract Negotiations
Most patient access leaders do not spend much time thinking about contract negotiations between the hospital and health plans. “It’s not something they traditionally were asked to play a role in,” explains Peter Kraus, CHAM, CPAR, FHAM, business analyst for revenue cycle operations at Emory Healthcare in Atlanta.
Some hospitals end up agreeing to terms that hurt the revenue cycle. “Patient access departments feel the good and bad consequences of contract provisions every day,” Kraus observes.
Authorization time frames are the most notorious example. “Patient access departments often are responsible for ensuring that front-end contractual provisions are met,” Kraus explains.
Some of the most troublesome contracts allow payers to take up to 14 business days to give an answer. Waiting that long wreaks havoc with productivity and patient satisfaction. People blame the hospital, not the payer, for taking so long to make a decision on the authorization.
“If provisions are infeasible, ambiguous, or contradictory, patient access is set up for failure,” says Kraus, noting better agreements with health plans make it much easier to financially clear accounts. “It is best, though not always possible, for hospitals to negotiate similar contracts with all its payers.” Otherwise, patient access staff scramble to keep track of all the different requirements.
There are two other items likely to cause headaches:
- Sometimes, payer contracts include requirements for data that are not always known at the time of scheduling. “Access should not be expected to produce information to payers that physicians are not expected or required to provide,” Kraus offers.
- Other times, payers require data that simply cannot be met with available staffing. Some payers require data provided by a utilization review (U/R) nurse in the ED, even during weekends and night shifts. “This is regardless of whether such staff are available 24/7 — or maybe even whether the payer can respond at all hours to such calls,” Kraus says.
Input from patient access on all these matters is a game-changer. “It protects the facility from accepting front end-related requirements that are impractical to meet,” Kraus says.
Patient access leaders may be the only ones in the entire hospital with the expertise to spot problematic requirements. Kraus says including them in the process “is part of acknowledging the ever-expanding importance of front end participation in the revenue cycle.”
Typically, the managed care or finance department handle negotiations with payers. But patient access knows which terms are going to make it difficult for the hospital to obtain reimbursement. “Managed care contracts should fully spell out requirements related to payer notifications, payer responses, and required data,” says John Woerly, MSA, RHIA, FHAM, an Indianapolis-based revenue cycle consultant.
Often, patient access is out of the loop on these specifics. “Many times, leaders are not part of the negotiations nor made aware of expectations,” Woerly notes. “Patient access must be at the table and provide input.”
Unrealistic requirements on the hospital side inevitably cause denials, but it works both ways. Payers are required to handle certain things, too. “Many times, contractual agreements are not adhered to because the providers don’t have the mechanisms in place to ensure payer compliance,” Woerly reports.
Sometimes, neither patient access nor payer staff truly know the requirements as stated in contracts. If payers are not meeting their obligations, patient access should not hesitate to call them out on it, Kraus offers. “The department should provide ongoing documented feedback to contract management and denial teams,” he says.
Woerly suggests patient access share these data with whoever is negotiating payer contracts:
- Volume of claims denials and write-offs (both dollar amounts and percentages);
- Reasons for denials (medical necessity, no authorizations in place, etc.);
- Whether the payer is meeting payment time frames.
“It is essential that the provider monitor such data and hold the payer responsible, just as the payer will hold the provider accountable for items documented in the contract,” Woerly stresses. For this to happen, the revenue cycle needs to be involved. “This ensures compliance, realizes appropriate financial outcomes, and meets patient expectations,” Woerly adds.
Including patient access in the process is part of acknowledging the ever-expanding importance of front end participation in the revenue cycle.
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