Contract Management Best Practices: Tips to Maximize Reimbursement

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Contract Management Best Practices
Tips to Maximize Reimbursement
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Introduction: Kristen B. Wood, CPC
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• Originally from Northeast Ohio, now resides in Charlotte NC
• Certified Professional Coder
• Over 30 years Revenue Cycle, Medical Coding and Billing
Experience
• 9 years Electronic Medical Record and Practice Management
software Project Management, Implementation, and Training
experience of over 100 medical practices Nationwide
• Senior Account Manager at PMMC since 2012

What is a Contract Management System?
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Tools designed to manage all aspects of the Facility or Provider’s
payer reimbursement contracts with the purpose of maximizing
financial performance and minimizing risk.
Designed to calculate reimbursement for individual claims
as well as analyze all posted transactions including
payments, contractual and administrative adjustments.
Using analytical tools, accurately identifies correctly and
incorrectly paid claims as well as provides detailed
analysis of Denials and payer performance.
Allows for modeling of proposed contract reimbursement
changes to aid in negotiations as well as providing
analysis of upcoming payers trends

What causes a ‘sick’ Accounts Receivable?
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• Mystery Contracts
• Registration Errors
• Billing Errors
• Denials
• Government Reimbursement changes
• Payer Tactics
• Poor communication

Mystery Contracts
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• Do you have an organized method of tracking the effective and
renegotiation date for every one of your Facility’s payer agreements?
• Do you save each contract, addendum, and fee schedule electronically
so all of your Collections team have access?
• Do you have a process for communicating all reimbursement changes
internally as well as to your Contract Management vendor?
• How do you know if the payer changes reimbursement without notifying
you in writing?
• Do you regularly attend payer meetings and Government calls?

Registration - The Front Line
• How does Registration currently verify Insurance plan coverage?
• Are all Insurance cards scanned into your billing system ?
• Correct Secondary plan entry is essential to accurate patient billing
• PPO and HMO pre-authorizations
requirements should be identified
at the time of admission if possible
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Billing Errors
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• Missing or incorrect use of modifiers
• Missing charges & Late Charges
• Posting errors
• Non-covered services
• Bill types
• CCI edits
• Missing Authorizations or Precerts on claims
• All Payers should be set up for Electronic 837 and 835 remits
Do you know what your most common billing errors are ?

When was the last time you performed a Root Cause analysis?
• Electronic Claim Clearinghouse edits- should be reviewed and
corrected daily
• Track medical necessity denials separately from other denials
• Decipher the CAS code and remark code meanings and then
identify payer trends
• Develop relationships with your Insurance payer representatives
• What are your timely filing deadlines for your payers?
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Denied Claims

• Divide Denial Types into a minimum of 3 categories:
Clinical, Administrative, Contractual
1. Clinical- Medical Necessity- make sure you have a process in
place for tracking provider trends as well as payer habits
2. Administrative- Coding and Billing errors should be quantified and
tracked for process improvement
3. Contractual- can be vague and require a call to the payer, should
be researched against your contract to make sure they are
legitimate
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Denied Claims Tracking

Commercial Payer Tactics
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• Silent PPOs
• Length of stay (LOS) underpayments
• Medical necessity denials
• Vague denial and remark codes
• Paying under old rates
• Bundling
• Service denials for outlier accounts

Medicare and Government Reimbursement Changes
• Are you reviewing Government denials and underpayments they
way you should?
• CCR and other CMS quarterly factor updates- are you keeping track
of your Inpatient and Outpatient Cost-to-charge ratio updates? Are
they being paid correctly by your Medicare HMOs?
• State Medicaid reimbursements- many recent changes that HMOs
have not kept up with= recovery opportunities for denied LOS,
Transfers, ER services, Observation, and outlier thresholds
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ICD-10
• CMS predicts that claim error rates will
be more than two times higher with
ICD-10
• *ICD-9 averages 3% error rate
• *ICD-10 could reach 6-10% increase
• *Time to correct will take longer with
ICD-10 causing a coding backlog.
• *Billers will have to refer to the
physician, nurse and/or clinical
documentation
• *Could take up to 18 minutes longer to
code a claim
How will the ICD-10
Transition (and later,
the ICD-11 Transition)
Impact your cash flow?
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Managing Your Accounts Receivable
• Do you know who your “problem payers” are?
• What billing and payment posting habits are delaying payments?
• Do you have accurate calculations of what your payers actually owe
you?

Contract Modeling for New Contract Negotiations
• Negotiate from a position
of power
• Empowers you with
information on how proposed
reimbursement changes will
impact your financial bottom
line- ahead of time
• IP and OP proposed rate
changes
• Proposed carve outs
• Outlier calculation changes
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Contract Modeling
Challenge:
• 32 different commercial payers
• Contract reimbursements shifting
towards value-based
• Complex coding and terms
• Projections using tools like Access and
Excel are manual and inaccurate
Solution:
• Targeted top five commercial payers to
model proposed terms
• Saved $3.7 million in otherwise lost
reimbursements “This allows us to go into new
negotiations with the utmost
confidence.”
- Adena Health System
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Contract Modeling to Prepare for Industry Changes
• Never be caught by
surprise again
• Enables you to model industry
changes as well as
reimbursement methodology
changes before they go into
effect so you can prepare
• State Medicaids moving to
APR-DRG reimbursement
methodology
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What Monthly Reports Should I Use?
• Recovery Productivity
• Underpayment and Denial Recovery Collection reports
• Claim Inventory and A/R Reports
• Slow pay and unpaid claims analysis
• Overpayments
• Denial Trend reporting

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Quarterly Analytics
• ICD analysis
• Payer scorecard and Financial performance
• Denial Trending
• Variance Assessment
• Cost Reporting
• Accuracy Reporting

7 Things to Do Now
1. Meet with your Collections team and determine areas of improvement: Do you have
the resources that you need to work all of your Denials and underpaid claims?
2. Meet with your Management Team: Registration, HIM, Coding managers, Billing
office, and Collections department to create a list of the most urgent issues that
need addressing
3. Make sure you know what your biggest payers are as well as the most common
reasons for denials
4. Do you know when your last Charge Master review occurred?
5. Make sure you and your vendor are actively participating in ICD 10 testing
6. Make sure you assess all electronic processes that affect Reimbursement and make
automation a priority
7. Meet with your Contract Management vendor to discuss reporting needs
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Thank You!
Contact Info:
Kristen Wood
Kristen.Wood@PMMConline.com
704-944-3082
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Contract Management Best Practices: Tips to Maximize Reimbursement

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