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Radiation Oncology News
April 2017 Radiation Oncology News (View More News and Articles)
What is contract management and what does it mean to your revenue cycle?
Contract management is the art of negotiating your reimbursement amount from the various payers for services provided. The process does not include regular Medicare, Tricare, VA (Veterans Administration), or Medicaid, which have a preset rate that is non-negotiable. However, it does include Medicare Plus plans (Medicare Advantage), which have a negotiable rate that typically ranges from 70% to 120% or more of the facility specific Medicare rate for HOPPS1 (APC2 based) and/or MPFS3 (RVU4 based). Contracted rates can be a percentage of a fee schedule such as Medicare, a percentage of billed charges, or a combination of both, case rates, and/or specific reimbursement by HCPCS5 code.
Most managed care contracts (MCC) contain additional reimbursement language concerning services that do not follow the predetermined reimbursement schedule. These are characterized as carve outs, and may be applicable to new codes added annually by the AMA. There are other types of carve outs that may be reimbursed outside the normal agreed upon fee schedule such as high volume or expensive services. Carve outs must be evaluated individually based on resources utilized and frequency.
Managed care contracts have a predetermined effective time limit which can be 1 to 2 years in many cases. The language in the MCC usually states the contract can be renegotiated after a certain time frame, or if the facility chooses not to renegotiate, the existing terms are rolled over to the next time period.
There is also contract language that identifies the time frame in which a claim must be provided to the payers (timely filing), payment time frames in which the claim must be paid by the payer, and processes and time frames for appealing denied and/or unpaid claims. The language in the contract typically states both parties agree to mediation of disagreements versus utilizing a court of law, if necessary.
Revenue Cycle Inc. can also assist the facility with charge master management. This includes evaluation of the charge master to ensure charges exceed contracted allowable amounts so no money is left on the table. In many contracts, especially those reimbursing a percentage of charges billed, there is also a ‘charge creep’ clause in which a provider can only increase their charge master fees a specified amount on an annual basis. If this clause is violated, the provider may have to reimburse the payer for the difference plus potential interest fees. If a charge creep clause is in place, RCI may be able to utilize rate optimization techniques. The technique involves increasing some prices and reducing others so there is a net neutral outcome to the overall charge master while increasing revenue capture, thus avoiding violation of the charge creep clause.
Once a contract has been negotiated, the payment terms should be loaded into your practice management contract management module to ensure you are being reimbursed according to contract terms and to identify overpayments to be refunded to the payer and underpayments that need to be appealed to the various payers. If you do not have a contract management module, you will have to create a manual audit process to ensure terms of the contract are being followed. As you may know, all under and overpayments are the responsibility of the provider to identify and interest may be applicable, per your contract language.
Not sure you have this information organized, loaded, or ready for renegotiation? Revenue Cycle can review existing contracts for favorable rates and language, perform manual spot audits to determine if the facility is being reimbursed appropriately, and ensure the charge master is appropriately priced to allow maximum reimbursement per contract. In addition, we will review the contract management system module to verify it is set up appropriately and develop a schedule of contract expirations and terms needed for renegotiation. To take it one step further, our team can assist you in renegotiating the provider contracts if requested. To get help managing your contracts, rely on the experts at Revenue Cycle Inc. For more information, please contact us at 512-583-2000 or email@example.com.
1 HOPPS – Hospital Outpatient Prospective Payment System
2 APC – Ambulatory Payment Classification
3 MPFS – Medicare Physician Fee Schedule
4 RVU – Relative Value Unit
5 HCPCS – Healthcare Common Procedure Coding System