Personal touch can speed HMO reimbursements
’The luster of managed care is dimming’We don’t often see the name of an HMO splashed across headlines nationwide for allegations of delaying claims payments to health care providers. But that’s what happened to Norwalk, CT-based Oxford Health Plans late last year. Certainly the $3.5 million in fines and restitution the New York State Insurance Department slapped on the HMO was a stunner.
But high-stakes headlines aside, the headache of delayed payments on third party claims is nothing new to anyone involved in health care billing and reimbursement, and long after Oxford has faded from news reports this problem remains a frustrating part of the job.
"Its seems to be a pretty big problem here," says Bob Snyder, director of patient financial services at Christ Hospital in Jersey City, NJ. "I think the HMOs grew quicker than their infrastructure could support. I’m not saying that [slow claims payment] are necessarily deliberate. But we have a real problem here."
A New Jersey statute requires that HMOs or traditional indemnity plans pay a hospital claim within 60 days or deny or contest the claim in writing within 45 days. "Some contracts specify that payment must be made within 45 days. If I could just get paid in 60 [days], I would feel like I’m doing pretty good," Snyder adds.
In New York, the problem has gained high-level attention. As recently as January, the New York State Insurance Department opened a toll-free hot line number for health care providers to call if they do not receive prompt payment of claims from HMOs and insurance companies. Last September, the state passed a law requiring HMOs and insurers to pay claims within 45 days of receipt or face fines of up to $500 per day. The law went into effect Jan. 22.
Still, the problem of slow payments remains a stubborn one for any hospital trying to stay afloat in the era of managed care.
When your facility accepts a patient’s HMO card, "the hospital is in effect extending money to the patient based on an insurance card," says Allan DeKaye, MBA, FHFMA, president and chief executive officer of DeKaye Consulting Inc., in Oceanside, NY. He has seen clients whose accounts receivable from HMOs go back six months or even longer, he says.
Assuming that the claims are "clean" to start with, there are many ways to coax quicker payments from recalcitrant HMOs — short of taking them to court, DeKaye says.
When signing on a new HMO, include a specific payment due date in your contract and spell out the process for reimbursement. "Providers can do themselves a benefit by insisting that some operational language be put right into the contract," DeKaye says. Create a clause, for example, stating that payments are due within 30 days. Alternatively, the contract can contain a clause specifying that someone designated by the health care provider and a counterpart at the HMO will be responsible for creating a payment process. The provider side can suggest that the agreement they reach operationally be appended to the contract in writing by a certain date, DeKaye adds. "Providers in general don’t do that," he notes.
The appended clause could say something along the lines of, "We, the hospital designate person X and person Y to work out the details of patient registration/accounting," DeKaye says. "This puts into contract law that somebody will be responsible."
If payment is not on time: No discountSnyder proposes going one step further. Since doing business with HMOs is built on the premise that the HMO will receive a discount in exchange for an increase in the volume of patients sent to a hospital, why not refuse to allow the discount if claims aren’t paid promptly, he suggests.
"If payment isn’t made within the agreed upon time frame, then we should be able to bill at charges rather than at the discounted rate." He adds that he has not yet tried that tactic with HMOs.
Often when Snyder first approaches payers about a problem, as a defensive tactic they question whether the claims were submitted cleanly, he says. His response: "Often I find that the claims are waiting to be signed in the accounts payable department, then obviously it’s a clean claim. That’s where the holdup is."
One tactic that has been very successful is the personal approach; Snyder meets on a regular basis with payers. He started scheduling the meetings once a month or every other month when he started his position at Christ Hospital. This technique has established a rapport with payers, Snyder explains, so when he picks up the phone to discuss a claims payment problem, he’s a familiar face not a nameless number cruncher. If necessary, Snyder arrives at the meetings armed with a report on accounts receivable older than 60 days.
"When I sit down with the payers, that’s one of the things that I typically bring up, that they’re in violation of both the contract and also the state statute," he says.
When taking the personal approach, start with a counterpart at the HMO — a peer of the hospital billing manager or the patient accounts manager, DeKaye advises. "I have encouraged people over the years to say, I’ll make an appointment to come see you, and I expect to have a check, and I’ll leave with a check," he says. If you don’t get the check, "insist on getting a date of when it will be paid."
Snyder brings billers into his meetings "so that they can get their questions answered directly and also be told what they can do to keep things moving along. Maybe they’re doing something that’s keeping things slow from a certain payer," he says.
As a follow-up, Snyder sends a letter to the HMO confirming what was said and what was promised, so that there is a record of the discussion.
"Things get a little better, and then they slide again — that’s the reason the meetings on a regular basis are a good idea," he explains. "I’ve had some success in having these meetings where afterward I’ve seen a large amount of cash come our way. If you’re nasty, it doesn’t work. You want to try to keep the lines of communication open and have a good relationship with the payer. And also hold them accountable."
If that doesn’t work, climb the corporate ladder. "When an HMO is recalcitrant, it may mean we have to go in and have a face to face with someone high up in the pecking order," DeKaye says. "You should have some level of escalation."
Adds Snyder, "Sometimes we’ve had to escalate up to the CFO level. I’ve gone as high as having a meeting with the president of an HMO with our [hospital] president to keep the lines of communication open. We’re trying to go to the highest level that we need to get our concerns heard and acted on."
Another successful tactic is to work corporate connections, DeKaye suggests. Corporate CFOs and hospital CEOs often serve on the same boards together. Sometimes a word between colleagues is the "open sesame" the HMO’s coffers require. "Take it up to more senior executives in the company. Sometimes they’re not aware they have a problem," he adds.
Make sure there is a system in place that ensures contracts signed at the highest levels of hospital management are communicated to the proper staff.
"Sometimes you sign a contract at the senior level, and it doesn’t filter down operationally," DeKaye says. Communication problems may occur in health system networks that have just gotten together in a new organizational structure. Delays in payments often occur before the new HMO is added to the provider’s systems.